Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
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We all know that schooling these days cost far more than ever before, and it is one of those purchases that parents feel bad about not making – in other words, they don’t skimp on schooling and spend probably a little bit more than they can afford in an effort to get the very best for their children. It is interesting from that point of view to read the results and the profits of two Stock Exchange listed companies, which make their profits out of the schooling system. Those are Curro and AdvTech. AdvTech has as its main education brands Crawford, Abbott and Trinity. A recent article in the Financial Mail suggested that the average revenue per pupil in an AdvTech school is R57 000,00 and earnings before depreciation and tax are R14 000,00 per pupil and in a Curro school the earnings are R31 300,00 and the earnings before tax, etc are approximately R5 400,00 per pupil.
It shows that there are a lot of profits to be made in this sector of business and many of those with children in school forget that that is exactly what it is – a business. The business has to pay its staff and has to make a profit for its shareholders. In the case of Curro, people believe that it is going to be so profitable in future years that its current share price is trading at a PE ratio of 220. That means, at its current earnings, when the market averages say 17 or 18, it would take 220 years for the company to earn the equivalent of its share price. That is an outrageous valuation, but it suggests that most people believe that the profits are going to double and possibly treble year after year for many years as this company grows and also illustrates how valuable those driving up the share price think this sector of our economy is.
*I do not own shares in either company.
Posted by Michael de Broglio on Wednesday 19-Mar-14
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Comments
Thabitha said:
on Wednesday 26-Mar-14 11:28 AM
We all want what is best for our children more especial in education and I think the facilities and infrastructures in private school is better than government schools
Joyce said:
on Thursday 20-Mar-14 05:53 PM
I think parents are left with no choice but attend to paying schooling cost
Cindy said:
on Thursday 20-Mar-14 04:54 PM
This is not something I look forward to pay. But it is something I will have to pay!
Juliet said:
on Thursday 20-Mar-14 02:10 PM
OK I know what the blog is about but like some comments above I must lead off the topic and comment I went to a public school and got 3 As in Matric (under the old more difficult system), 2 Bs (I missed a 4th A by 1%!) and 1 C. My belief is and it is something that was confirmed when I studied psychology, is that we are programmed a certain way and with good-enough parenting and the absence of abuse, your children will turn out pretty much the same as they always would have whether you send them to public or private school, whether you spend thousands on extra tuition or not, whether you spend extra on extra etc etc . As long as you provide your child with a safe and secure environment with an emphasis on development the child should turn out basically the same as if the child were placed in better environments, And this is about the basics of the child. Obviously the schools Prince William and Harry attended provided an education with extra benefits like grooming etc you won't get at a public school but unless you can afford such exceptional schooling and even then, what were their grades?, it really does not make a difference.
Elektra said:
on Wednesday 19-Mar-14 05:42 PM
I attended a Public school, and I think I have turned out okay, Obtaining an LLB Degree, working at a successful law firm. (Not to shabby) But my sister who is 17 is currently in a Private school, and I can definitely see the advantages she gets that I never did. As Jade mentioned, more opportunities to travel with the school and participate in prestigious events, I would have enjoyed more of such opportunities than what I was awarded in my schooling years.
Caron said:
on Wednesday 19-Mar-14 02:40 PM
I've been looking for a stock investment and might just consider looking in the education section now.
Stephanie said:
on Wednesday 19-Mar-14 01:25 PM
I know a few of my friends that went to a private school and our knowledge are equal. If your child is an average school or even in a private school it's up to them if they want to learn or not. And it's up to a parent to give their child the amount of knowledge and attention that's needed. If you have enough money for a private school, good for you. But a normal average school is just as good.
Liesl said:
on Wednesday 19-Mar-14 01:25 PM
I am just glad that I don't have little ones that still needs to go to school or just started their schooling career
BIANCA ELS said:
on Wednesday 19-Mar-14 01:15 PM
From my point of view, my child will not be going to any fancy school just to turn out being a spoiled brat. If your children gets the right amount of attention at home ,and you teach them the right values in life, they will be a success in the future, no matter what school they go to.
Jessica said:
on Wednesday 19-Mar-14 01:04 PM
I must say the schooling costs are very expensive I want to move my son into this one creche and it is beyond expensive but has the best education for your toddler than any other school can offer. It's hard choices to make as a parent as to which school is best as you want the utmost best for them but they come at a hefty price. Now I know why because as per usual someone always has to be gaining more out of it.
david said:
on Wednesday 19-Mar-14 12:45 PM
my son goes to a private school, and fees are horrendous. Ultimately, we all want our children to have every possible advantage to enable them to get as far in life as they can. I regularly tell my son he better become something spectacular, as with the amount i spend on tuition, i cannot afford to plan for my own retirement, thus his success is my retirement plan!!!
Sorea said:
on Wednesday 19-Mar-14 12:39 PM
A friend of mine had twins in January. They have already registered their children with schools to ensure entry. It is therefore completely understandable that these companies would be such a lucrative seeming investment.
Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!
