Q2 2026 Advtech Ltd Earnings Call

August 25, 2026

Speaker #1: As parents, you dream of a future where your child doesn't just succeed, but leads and becomes a force for good. As partners, you want to be part of something that creates impact beyond numbers.

Operator: As parents, you dream of a future where your child doesn't just succeed but leads and becomes a force for good. As partners, you want to be part of something that creates impact beyond numbers. Come together with us on this journey. At Advtech, we're more than an education provider. We deliver the Advtech Advantage, a promise of superior academic outcomes and enhanced life opportunities for our students. Driven by deep expertise in teaching and learning and supported by proprietary AI-powered systems in world-class facilities, our students are equipped with critical thinking skills, digital confidence, and life skills rooted in values. Our campuses span the continent because we believe in Africa's people and potential. Our true strength lies in our teachers and mentors who nurture every student's ability, both in class and on our prestigious campuses.

Speaker #1: Come together with us on this journey. At Advtech, we're more than an education provider. We deliver the Advtech Advantage: a promise of superior academic outcomes and enhanced life opportunities for our students.

Speaker #1: Driven by deep expertise in teaching and learning, and supported by proprietary AI-powered systems in world-class facilities, our students are equipped with critical thinking skills, digital confidence, and life skills rooted in values.

Speaker #1: Our campuses span the continent because we believe in Africa's people and potential. But our true strength lies in our teachers and mentors, who nurture every student's ability—both in class and on our prestigious campuses.

Speaker #1: From preschool to tertiary learning, we're proud to be a trusted partner in education that continues to shape futures with purpose. We invite you to be part of this journey as a parent, or simply as someone who believes in the power of purpose-led education.

Operator: From preschool to tertiary learning, we're proud to be a trusted partner in education that continues to shape futures with purpose, and we invite you to be part of this journey as a parent or simply someone who believes in the power of purpose-led education. Visit our website to learn more.

Speaker #1: Visit our website to learn more.

Speaker #2: Thanks. Good morning to everyone in the room and on the call. Just some housekeeping before we begin: the presentation will be uploaded to our website later today, with a webcast and transcript to follow.

Geoff Whyte: Thanks. Good morning to everyone in the room and on the call. Just some housekeeping before we begin. The presentation will be uploaded to our website later today with the webcast and transcript to follow. I will also take questions in the usual way as per the screen after the slides. Please also join us for snacks and drinks once the formalities have been completed, and don't forget to collect a gift pack hand prepared by our Capsicum chefs before you leave. It'll probably add half a kilogram to everyone. Into our results for the H1 of 2026. These are the high-level numbers, which I'll unpack as we go through the presentation. H1 revenue was up 8% year on year to ZAR 5.1 billion, whilst operating profit grew by 14%, breaking through ZAR 1 billion for the first time.

[Video Narrator]: As parents, you dream of a future where your child doesn't just succeed but leads and becomes a force for good as partners you want to be part of something that creates impact beyond numbers? Come together with us on this journey. At Advtech, we're more than an education provider. We deliver the Advtech Advantage, a promise of superior academic outcomes and enhanced life opportunities for our students. Driven by deep expertise in teaching and learning and supported by proprietary AI-powered systems in world-class facilities, our students are equipped with critical thinking skills, digital confidence, and life skills rooted in values.

[Video Narrator]: Our campuses span the continent, because we believe in Africa's people and potential. Our true strength lies in our teachers and mentors, who nurture every student's ability to thrive in class and are not preceded campuses. From preschool to tertiary learning, we are proud to be a trusted partner in education that continues to shape futures with purpose. We invite you to be part of this journey as a parent, or simply someone who believes in the power of purpose-based education. Visit our website to learn more.

Geoff Whyte: Thanks. Good morning to everyone in the room and on the call. Just some housekeeping before we begin. The presentation will be uploaded to our website later today with the webcast and transcript to follow. I will also take questions in the usual way as per the screen after the slides. Please also join us for snacks and drinks once the formalities have been completed, and don't forget to collect a gift pack hand prepared by our Capsicum chefs before you leave. It'll probably add half a kilogram to everyone. Into our results for the H1 of 2026. These are the high-level numbers, which I'll unpack as we go through the presentation. H1 revenue was up 8% year-on-year to ZAR 5.1 billion, whilst operating profit grew by 14%, breaking through ZAR 1 billion for the first time.

Speaker #2: We'll also take questions in the usual way as per the screen after the slides. And please also join us for snacks and drinks once the formalities have been completed. Don't forget to collect your gift bag, prepared by our Capsicum chefs, before you leave.

Speaker #2: We'll probably add half a kilogram to everyone. So, into our results for the first half of 2026. These are the high-level numbers, which I'll unpack as we go through the presentation.

Speaker #2: So, half-year revenue was up 8% year-on-year to R5.1 billion, whilst operating profit grew by 14%, breaking through a billion rand for the first time.

Speaker #2: Operating margin improved from 21% to 22% year-on-year, whilst headline and normalized earnings per share both grew by 16%. We're also pleased to announce that we've increased our interim dividend by 18% to 53 cents.

Geoff Whyte: Operating margin improved from 21% to 22% year on year, whilst headline and normalized earnings per share both grew by 16%. We're also pleased to announce that we've increased our interim dividend by 18% to 53 cents. This slide captures our current brand structure. Looking at the middle box, the simplification of our tertiary business is now complete and already driving focus and operational efficiency. Looking at the block on the left, you might also notice a reduction in the number of schools brands, which is something I'll come back to later. We also continue to gear up for growth across the organization. With that in mind, we recently appointed Onyana Molosane to the new role of Group Business Development Executive, adding capacity and experience to our M&A team. He joins us in a couple of weeks on 1 September.

Speaker #2: This slide captures our current brand structure. Looking at the middle box, the simplification of our tertiary business is now complete and is already driving focus and operational efficiency.

Speaker #2: And then, looking at the block on the left, you might also notice a reduction in the number of school brands, which is something I'll come back to later.

Speaker #2: And we also continue to gear up for growth across the organization. With that in mind, we recently appointed Onyana Molasani to the new role of Group Business Development Executive, adding capacity and experience to our M&A team.

Speaker #2: And he joins us in a couple of weeks, on the 1st of September. And then, taking a look at the current shape of the business.

Geoff Whyte: Taking a look at the current shape of the business, as you can see from this chart, 87% of our revenue and 96% of our operating profits now come from our education business. Within education, we are also pivoting over time towards our fast-growing tertiary division. Tertiary now contributes 53% of operating profits versus 43% from schools. Running through performance at divisional level, School South Africa's revenue was up 8% for the period, whilst their operating profit was up by 9%. The rest of Africa schools, they grew revenue by 8% and operating profits by 11%. Tertiary revenue and operating profit continue to accelerate despite rolling over significantly bigger numbers from last year, up 17% and 19% respectively.

Speaker #2: As you can see from this chart, 87% of our revenue and 96% of our operating profit now come from our education business. And within education, we're also pivoting over time towards our fast-growing tertiary division.

Speaker #2: Tertiary now contributes 53% of operating profit, versus 43% from Schools. And then, running through performance at divisional level: Schools South Africa’s revenue was up 8% for the period, whilst operating profit was up by 9%.

Speaker #2: And then the rest of Africa's schools grew revenue by 8% and operating profit by 11%. Tertiary revenue and operating profit continue to accelerate, despite rolling over significantly bigger numbers from last year—up 17% and 19%, respectively.

Speaker #2: And finally, for the reasons shared at our 2025 full-year results, we saw a moderate decline in resourcing revenue and operating profit, down 15% and 12%, respectively.

Geoff Whyte: Finally, for the reasons shared at our 2025 full year results, we saw a moderate decline in resourcing revenue and operating profit down 15% and 12% respectively. Recapping the 2026 enrollment numbers that we first shared in March, this is really just a reminder. For the total group, enrollments are up for this year by 13%, just short of 120,000. That is an all-time record increase of nearly 13,500 students in a single year. That breaks down into increases of 5% in schools and 19% in tertiary, where we continue to see exceptionally strong growth. The compound annual growth rates are also looking strong. Looking at a further breakdown of the 5% schools growth, in South Africa, enrollments are up by 1% and in the rest of Africa we are up by 14%, driven to a degree by the Regis Runda acquisition in Nairobi.

Speaker #2: And then, recapping the 2026 enrollment numbers that we first shared in March, this is really just a reminder. For the total group, enrollments are up for this year by 13%, just short of 120,000.

Speaker #2: That is an all-time record increase of nearly 13,500 students in a single year. And that breaks down into increases of 5% in schools, and 19% in tertiary, where we continue to see exceptionally strong growth.

Speaker #2: And the compound annual growth rates are also looking strong. Then looking at a further breakdown of the 5% schools growth: In South Africa, enrollments are up by 1%, and in the rest of Africa, we're up by 14%, driven to a degree by the Regis Runda acquisition in Nairobi.

Speaker #2: And looking at the compound annual growth rates, we're also seeing consistently strong growth over a five-year period. Then, breaking down the 19% tertiary enrollment growth.

Geoff Whyte: Looking at the compound annual growth rates, we are also seeing consistently strong growth over a five-year period. Breaking down the 19% tertiary enrollment growth, our contact student numbers were up 17% year on year, while in distance we were up 34%. I think it is worth noting that we have nearly doubled distance enrollments in the last two years, in line with our strategy. Comparing our most recent numbers to the five-year trends, you will see the significant acceleration in total and in both the contact and distance splits. Although we are pleased to report such strong numbers, the outperformance of Rosebank and Distance at lower price points continues to have a mixed impact on revenue. Just as a reminder, Rosebank and Distance fees are about a third of what we charge for Contact in Emeris and Vega. Getting into the financials.

Speaker #2: Our contact student numbers were up 17% year-on-year, while in distance we were up 34%. And I think it's worth noting that we've nearly doubled distance enrollments in the last two years, in line with our strategy.

Speaker #2: And then, comparing our most recent numbers to the five-year trends, you'll see the significant acceleration in total and in both the contact and distance splits.

Speaker #2: And although we're pleased to report such strong numbers, the outperformance of Rosebank and Distance at lower price points continues to have a mixed impact on revenue.

Speaker #2: And just as a reminder, Rosebank and distance fees are about a third of what we charge for contact in Emirates and Vega. And then, getting into the financials.

Speaker #2: This slide gives the five-year context for the 8% revenue and 14% operating profit increases I shared earlier. And looking at the CAGRs, I just point out the consistency in the numbers.

Geoff Whyte: This slide gives the five-year context for the 8% revenue and 14% operating profit increases I shared earlier. Looking at the CAGRs, I just point out the consistency in the numbers with revenue and operating profit compounding over five years at 11% and 16% respectively. Looking at group level operating margin, we have moved from 21% to 22% year on year, driven by operating leverage efficiencies and a mix shift towards our higher margin education businesses, which Hannes will come back to a little later. I would also just mention that our margin improvement is net of significant investments into people, systems and facilities, as well as set up costs for our new university in Ghana, which continue. Looking at the high level margin breakdown between education and resourcing.

Speaker #2: With revenue and operating profit compounding over five years at 11% and 16%, respectively, and then looking at group-level operating margin, we've moved from 21% to 22% year-on-year, driven by operating leverage, efficiencies, and a mix shift towards our higher margin education businesses, which Hannes will come back to a little later.

Speaker #2: And I'd also just mention that our margin improvement is net of significant investments into people, systems, and facilities, as well as setup costs for our new university in Ghana, which continue.

Speaker #2: And then, looking at the high-level margin breakdown between Education and Resourcing, I'm pleased to report positive movement in both divisions, with Education up from 23.8% to 24.3%, and Resourcing improving from 6.5% to 6.8%.

Geoff Whyte: I'm pleased to report positive movement in both divisions with education up from 23.8% to 24.3% and resourcing improving from 6.5% to 6.8%. Breaking down the 24.3% education margin, schools improved from 21.8% to 22.2%, whilst the tertiary division increased from 25.9% to 26.4%, despite that hit from setup costs in Ghana, which are having around a 0.3% effect this year. Further breaking down the schools numbers, South Africa improved from 20.6% to 20.9%, while rest of Africa jumped from 29.4%, breaking through 30% to 30.1%. Contextualizing the NEPS growth of 16% I shared upfront, this chart shows the growth trend over the last five years. As you can see, NEPS is compounding at 18% and has nearly doubled since 2022. Looking at NEPS in US dollars, we're delivering an increase of 25% year on year.

Speaker #2: And then breaking down the 24.3% education margin: Schools improved from 21.8% to 22.2%, whilst the Tertiary division increased from 25.9% to 26.4%, despite that hit from setup costs in Ghana, which are having around a 0.3% effect this year.

Speaker #2: And then, further breaking down the schools' numbers: South Africa improved from 20.6% to 20.9%, while the rest of Africa jumped from 29.4%, breaking through 30%, to 30.1%.

Speaker #2: And then, contextualizing the normalized earnings per share growth of 16% I shared upfront, this chart shows the growth trend over the last five years.

Speaker #2: And as you can see, NEPS has been compounding at 18% and has nearly doubled since 2022. And then, looking at NEPS in US dollars, we're delivering an increase of 25% year-on-year.

Speaker #2: And whilst recent rand strength is clearly helpful, it's worth noting that we're also compounding dollar earnings over the longer term at 18%. And then moving into the Schools division.

Geoff Whyte: Whilst recent rand strength is clearly helpful, it's worth noting that we're also compounding dollar earnings over the longer term at 18%. Moving into the schools division, this slide summarizes our schools business. We're currently in four countries with 122 schools and nearly 48,000 students. On this slide, we cover our 10 biggest brands. We also have a significant number of single school brands in the portfolio. So mirroring the simplification work we've done in tertiary, that's something that we're now addressing. This chart shows the ongoing consolidation of nine schools into our flagship brands. Charterhouse, Pecanwood College, and Greenwood Bay College are migrating or have already moved to Pinnacle Colleges. In Africa, Makini Schools, Flipper International School, and the Gaborone International School will fall under our new international schools group brand.

Speaker #2: This slide summarizes our schools business. We're currently in four countries, with 122 schools and nearly 48,000 students. On this slide, we cover our 10 biggest brands, but we also have a significant number of single-school brands in the portfolio.

Speaker #2: So, mirroring the simplification work we've done in tertiary, that's something that we're now addressing. And this chart shows the ongoing consolidation of nine schools into our flagship brands.

Speaker #2: Charterhouse, Pecanwood, and Glenwood Bay are migrating or have already moved to Pinnacle Colleges. In Africa, McKinney, Flipper, and The Gaborone International School will fall under our new International Schools Group brand.

Speaker #2: Glenwood House and Taiga Valley are moving under Trinity House, and South Downs College is migrating to Crawford International. These alignments have been well received by all stakeholders and will significantly simplify our portfolio.

Geoff Whyte: Glenwood House and Tygervalley College are moving under Trinityhouse, and Southdowns College is migrating to Crawford International. These alignments have been well-received by all stakeholders and will significantly simplify our portfolio, driving greater operational efficiency. Returning to how we are strengthening the organization, effective 1 May, we appointed Melt Labuschagne to the new position of General Manager, House Schools. This was an internal promotion designed to drive a greater focus on operational excellence and enrollment growth. Effective 4 August, we appointed Justin Painter to the new position of General Manager, this time in Crawford International. Justin Painter was promoted from the role of Principal at Crawford International North Coast, and he's been given a very similar brief to Melt Labuschagne. In July, we appointed Mthokozisi Dlolozi to the new position of Sales Manager for Crawford International.

Speaker #2: Driving greater operational efficiency. And then, returning to how we're strengthening the organization—effective 1 May, we appointed Melt Labeshakni to the new position of General Manager, House Schools.

Speaker #2: This was an internal promotion designed to drive a greater focus on operational excellence and enrollment growth. Effective 1 August, we appointed Justin Painter to the new position of General Manager, this time at Crawford International.

Speaker #2: Justin was promoted from the role of Principal at Crawford North Coast, and he's been given a very similar brief to Melt. In July, we appointed Mto Kosesisi Lushozi to the new position of Sales Manager for Crawford International.

Speaker #2: This role has been created as part of a program to strengthen enrollment growth. And Mto Kosesisi brings some excellent blue-chip experience to the company, having previously worked for Standard Bank and the South African Post Office.

Geoff Whyte: This role has been created as part of a program to strengthen enrollment growth. Mthokozisi Dlolozi brings some excellent blue-chip experience to the company, having previously worked for Standard Bank and the South African Post Office. Going back to the numbers, this chart covers the schools division in total. Revenue was up 8% versus last year at ZAR 2.2 billion, whilst operating profit grew by 10% to ZAR 479 million. Looking at the CAGRs, over five years, we're compounding at 12% on revenue and 16% on operating profit. The detail on school South Africa, revenue was up 8%, with operating profit up 9%. Looking at the CAGRs, again, we're seeing consistently strong numbers growing by 11% and 13% respectively over five years. Moving on to rest of Africa schools, in rands, revenue and operating profit were up a solid 8% and 11% respectively.

Speaker #2: And then, going back to the numbers, this chart covers the Schools division in total. Revenue was up 8% versus last year at R2.2 billion, while operating profit grew by 10% to R479 million.

Speaker #2: And looking at the CAGRs, over five years, we're compounding at 12% on revenue and 16% on operating profit. And then the detail on Schools South Africa: revenue was up 8%, with operating profit up 9%.

Speaker #2: And looking at the CAGOs, again, we're seeing consistently strong numbers, growing by 11% and 13%, respectively, over five years. Then, moving on to the rest of Africa schools.

Speaker #2: In rands, revenue and operating profit were up a solid 8% and 11% respectively, and it's not on this chart, but the numbers were much stronger in local currency.

Geoff Whyte: It is not on this chart, but the numbers were much stronger in local currency after some significant weakening of the pula, shilling, and birr against the rand. Looking at the picture over five years, our international division continues on its strong growth path. Moving on to built and ultimate capacity, this slide shows how the numbers have moved across all schools from February 2023 to February 2026. It gives our 2026 SA international split in the last two columns. Overall, looking across the third row down, if I can bring your eye there, we are maintaining a healthy 84% utilization of built capacity. Looking at the splits, we have reasonable headroom in South Africa, but a lot less internationally, where utilization stands at 93%. This makes our international schools very efficient to operate, but it limits further enrollment growth.

Speaker #2: After some significant weakening of the pula, shilling, and birr against the rand, and looking at the picture over five years, our international division continues on its strong growth path.

Speaker #2: And then, moving on to built and ultimate capacity—this slide shows how the numbers have moved across all schools, from February 2023 to February 2026, and then gives a 2026 SE International split in the last two columns.

Speaker #2: And overall, looking across the third row down—if I can bring your eye there—we're maintaining a healthy 84% utilization of built capacity. But looking at the splits, we have reasonable headroom in South Africa, but a lot less internationally, where utilization stands at 93%.

Speaker #2: So, this makes our international schools very efficient to operate, but it limits further enrollment growth. We continue to work hard on adding new sites and expanding existing facilities where we can.

Geoff Whyte: We continue to work hard on adding new sites and expanding existing facilities where we can. Moving on to real estate, our newest Pinnacle College Ridgeview, which opened at the beginning of 2025, continues to perform well. The next building phase is underway and will be completed early next year. This will increase capacity to 600 students as we add grades to the school. Pinnacle College Copperleaf, which opened back in 2017, has also performed very well but was running out of capacity. In a project completed last month, we have added space for 500 more students. The expansion cost ZAR 24 million and included a new dedicated preschool that you can see in the top two photographs on the slide, as well as an additional classroom block for the high school.

Speaker #2: And then, moving on to real estate. Our newest Pinnacle College, Ridgeview, which opened at the beginning of 2025, continues to perform well. The next building phase is underway and will be completed early next year.

Speaker #2: And this will increase capacity to 600 students as we add grades to the school. Pinnacle College Copperleaf, which opened back in 2017, has also performed very well but was running out of capacity.

Speaker #2: So, in a project completed last month, we've added space for 500 more students. The expansion cost $24 million and included a new dedicated preschool, which you can see in the top two photographs on this slide, as well as an additional classroom block for the high school.

Speaker #2: We'll also be opening a new Abbots High School in Bordeaux in time for the next academic year. This will be built on the site of the old Vega Randburg campus at a cost of R22 million.

Geoff Whyte: We will also be opening a new Abbotts High School in Bordeaux in time for the next academic year. This will be built on the site of the old Vega Randburg campus at a cost of ZAR 22 million. It is in a great location and will have capacity for 550 students from day one. Moving into Africa, the Makini Runda School in Nairobi, which we acquired in September last year, continues to perform well. On the back of investments to improve facilities and systems, enrollments have grown by 21% since acquisition. The high-demand Cambridge curriculum will be introduced next month at the school, which should give us a further positive bump in student numbers. A quick word on Makini Statehouse.

Speaker #2: It's in a great location, and we'll have capacity for 550 students from day one. And then, moving into Africa, the McKinney-Rundle School in Nairobi, which we acquired in September last year, continues to perform well.

Speaker #2: And on the back of investments to improve facilities and systems, enrollments have grown by 21% since acquisition. The high-demand Cambridge curriculum will be introduced next month at the school, which should give us a further positive bump in student numbers.

Speaker #2: And then a quick word on McKinney State House. This is a school in a prime location in Nairobi, but it was scheduled to close at the end of its lease this year, which would have lost us 280 enrolments.

Geoff Whyte: This is a school in a prime location in Nairobi, but it was scheduled to close at the end of its lease this year, which would have lost us 280 enrollments. After some excellent negotiation from our international team, we have managed to secure a new long-term rental agreement that will allow us to completely rebuild the school and increase capacity to 575 students. Moving on to the Flipper International School in Ethiopia, which we acquired towards the end of 2024, IT upgrades have just been completed, which will enable the implementation of various support systems and academic training for teachers. We have also successfully negotiated the harmonization of school fees across various historic tiers, which significantly strengthens our commercial model. I also wanted to share a recent setback that we have managed to turn into an opportunity.

Speaker #2: But after some excellent negotiation from our international team, we've managed to secure a new long-term rental agreement that will allow us to completely rebuild the school and increase capacity to 575 students.

Speaker #2: And then moving on to the Flipper schools in Ethiopia, which we acquired towards the end of 2024. IT upgrades have just been completed, which will enable the implementation of various support systems and academic training for teachers.

Speaker #2: We've also successfully negotiated the harmonization of school fees across various historic tiers, which significantly strengthens our commercial model. I also wanted to share a recent setback that we've managed to turn into an opportunity.

Speaker #2: Earlier in the year, we heard that the Ethiopian government had bought one of our leased schools via compulsory purchase, giving us only a couple of months to vacate.

Geoff Whyte: Earlier in the year, we heard that the Ethiopian government had bought one of our leased schools via compulsory purchase, giving us only a couple of months to vacate. Our team on the ground have found bigger, better alternative premises in Addis Ababa's Mexico Square, as pictured on the left of the slide. The new site comes with the added bonus of increasing capacity by 450 students and has allowed a seamless transfer. Moving on to the tertiary division, this is a snapshot of our recently simplified structure. We currently run 32 campuses across five brands. Our student numbers now stand at nearly 71,500, up 11,400 year on year, as you saw on the enrollments chart earlier. We normally only share this high-level view, but I thought it might be useful for this presentation to show you the geographical breadth of our campuses.

Speaker #2: But our team on the ground have found bigger, better alternative premises in Addis Ababa's Mexico district, as pictured on the left of the slide.

Speaker #2: The new site comes with the added bonus of increasing capacity by 450 students and has allowed a seamless transfer. Moving on to the tertiary division.

Speaker #2: This is a snapshot of our recently simplified structure. We currently run 32 campuses across five branches. Student numbers now stand at nearly 71,500, up 11,400 year on year, as you saw on the enrollments chart earlier.

Speaker #2: We normally only share this high-level view, but I thought it might be useful for this presentation to show you the geographical breadth of our campuses.

Speaker #2: So this slide shows the locations of our 11 Emeritus contact campuses in South Africa, right across the country. So we have very broad penetration.

Geoff Whyte: This slide shows the locations of our 11 Emeris contact campuses in South Africa, right across the country. We have very broad penetration. This one shows the existing Rosebank network in eight South African cities, as well as Accra, Ghana. We will add a ninth campus to the brand next year, which I will come back to in a few slides' time. Getting back to the numbers, tertiary revenue is up 17%, and despite significant investments to increase capacity and to strengthen our brands, operating profit is up 19%. Looking at the five-year compound annual growth rates, revenue and operating profit are compounding at 14% and 17% respectively. This chart maps the qualifications we offer across our tertiary brand portfolio, spanning skills development to PhDs in a range of delivery modes.

Speaker #2: And this one shows the existing Rosebank network and eight South African cities, as well as Accra, Ghana. We'll add a ninth campus to the brand next year, which I'll come back to in a few slides' time.

Speaker #2: But getting back to the numbers: tertiary revenue is up 17%, and despite significant investments to increase capacity and to strengthen our brands, operating profit is up 19%.

Speaker #2: And looking at the five-year compound annual growth rates, revenue and operating profit are compounding at 14% and 17%, respectively. This chart maps the qualifications we offer across our tertiary brand portfolio, spanning skills development to PhDs, in a range of delivery modes.

Speaker #2: This has been ongoing work for the last few years, but I think we're now in a really good position. And then, covering the question: where are we with university status?

Geoff Whyte: This has been ongoing work for the last few years, but I think we are now in a really good position. Covering the question, where are we with university status? This chart shows our best guess at the forward milestones and timing in the absence of final information from government. The restructure of our tertiary division, as I said earlier, is now complete. We are rebranding The IIE to Emeris and creating a second degree-awarding entity in Rosebank College. We still hope government will publish the final criteria and the application process later this year. When this happens, we understand both brands will immediately be recognized as higher education colleges, which we will ignore from a branding perspective.

Speaker #2: This chart shows our best guess at the forward milestones and timing in the absence of final information from government. The restructure of our Tertiary division, as I said earlier, is now complete.

Speaker #2: We're rebranding the IIE to Emeris and creating a second degree-awarding entity within Rosebank College. We still hope the government will publish the final criteria and the application process later this year.

Speaker #2: When this happens, we understand both brands will immediately be recognized as higher education colleges, which we will ignore from a branding perspective. We'll then apply for the interim step of university college status for Rosebank, and straight to university status for Emeris.

Geoff Whyte: We will then apply for the interim step of university college status for Rosebank and straight to university status for Emeris, given that we are further down the track there in terms of research outputs and postgrad qualifications. Moving on to real estate, as most of you will be aware, our existing Emeris and Vega sites in Sandton were relocated to a new mega campus on Grayston Drive at the beginning of this year, doubling student capacity to 9,000. Our first-year enrollments are up over 20% year on year, so we have started with a bang in this new location. In terms of immediate building plans, we are in the process of adding a 200-space parking deck to the site, that will open in February next year. We also hope to add nearby accommodation for around 850 students, targeting completion in 2028.

Speaker #2: Given that we're further down the track there in terms of research outputs and postgraduate qualifications. And then, moving on to real estate—as most of you will be aware, our existing Emeris and Vega sites in Sandton were relocated to a new mega campus on Grayston Drive at the beginning of this year, doubling student capacity to 9,000.

Speaker #2: Our first-year enrollments are up over 20% year on year, so we've started with a bang in this new location. And in terms of immediate building plans, we are in the process of adding a 200-space parking deck to the site.

Speaker #2: That will open in February next year. We also hope to add nearby accommodation for around 850 students, targeting completion in 2028. I'd also share that enrollment interest for the next academic year has been very strong.

Geoff Whyte: I would also just share that enrollment interest for the next academic year has been very strong. We also relocated our Emeris Nelson Mandela Bay operation to new purpose-built premises in Walmer Park at the beginning of this year. In many ways, we have mirrored what has been built in Sandton, including the world-class indoor sports center you can see on the bottom right of this slide. We have also increased capacity by 50% to 4,500 students. Then an update on our KZN University development. We have acquired 10 hectares of land, a huge site southwest of the Cornubia Mall near Umhlanga, to build a state-of-the-art campus with capacity for 10,000 students. The new location will consolidate our existing tertiary sites in the region and include world-class sports facilities, as well as a sizable amount of student accommodation.

Speaker #2: And we also relocated our Emeris Nelson Mandela Bay operation to new purpose-built premises in Warmer Park at the beginning of this year. In many ways, we've mirrored what's been built in Sandton, including the world-class indoor sports centre you can see on the bottom right of this slide.

Speaker #2: We've also increased capacity by 50% to 4,500 students. And then an update on our KZN university development: we've acquired 10 hectares of land, a huge site southwest of the Cornubia Mall near Umhlanga, to build a state-of-the-art campus with capacity for 10,000 students.

Speaker #2: The new location will consolidate our existing tertiary sites in the region and include world-class sports facilities, as well as a sizable amount of student accommodation.

Speaker #2: Phase one will open in 2029, with full buildout due to be completed in 2035. And then, moving on to Rosebank. Our rebranding from IIE Rosebank College to Rosebank International is now complete, as you can see in the photograph on the top left of this slide.

Geoff Whyte: Phase 1 will open in 2029, with full build-out due to be completed in 2035. Then moving on to Rosebank. Our rebranding from IIE Rosebank College to Rosebank International is now complete, as you can see in the photograph on the top left of this slide. The new logo and iconography position Rosebank International as a trusted, aspirational international university with a heritage going back to 1909. I am also pleased to report that the renovation and expansion of our flagship Braamfontein campus, which is what we are showing here, has now been concluded, increasing capacity from 11,500 to 15,000 students. But despite adding that extra capacity, we are already running out of space in Braamfontein. We have therefore acquired new buildings near the main campus that will allow us to increase capacity immediately by another 4,000.

Speaker #2: The new logo and iconography position Rosebank International as a trusted, aspirational international university, with a heritage going back to 1909. I'm also pleased to report that the renovation and expansion of our flagship Braamfontein campus—which is what we're showing here—has now been concluded.

Speaker #2: Increasing capacity from 11,500 to 15,000 students. But despite adding that extra capacity, we're already running out of space in Braamfontein. We've therefore acquired new buildings near the main campus that will allow us to increase capacity immediately by another 4,000.

Speaker #2: Ultimate capacity on this additional site will be 9,000, however, which will give us some very useful headroom. The total cost of acquiring the buildings and phase one of the fit-out is around $120 million. Work to open in time for the 2027 academic year will begin shortly and will be finished by the end of November.

Geoff Whyte: Ultimate capacity on this additional site will be 9,000, however, which will give us some very useful headroom. The total cost of acquiring the buildings and phase 1 of the fit-out is around ZAR 120 million. Work to open in time for the 2027 academic year begins shortly, but will be finished by the end of November. Then moving east, rapid growth in demand also means we are running out of space in our Durban campus. As a result, we will be relocating to much larger premises in time for the new academic year. We are creating space for an additional 650 students immediately, with the ability to add 2,000 more over time. We are also seeing strong demand in Polokwane, where we have just added two new buildings to our existing campus.

Speaker #2: Then, moving east, rapid growth in demand also means we're running out of space at our Durban campus. As a result, we'll be relocating to much larger premises in time for the new academic year.

Speaker #2: We are creating space for an additional 650 students immediately, with the ability to add 2,000 more over time. And we're also seeing strong demand in Polokwane, where we've just added two new buildings to our existing campus.

Speaker #2: That's increased capacity by 900 to 4,600, and allowed us to upgrade student facilities at the same time. And then, as mentioned a few slides back, Rosebank International will open a new campus in January, in Komga City, which used to be East London.

Geoff Whyte: That has increased capacity by 900 to 4,600 and allowed us to upgrade student facilities at the same time. Then, as mentioned a few slides back, Rosebank International will open a new campus in January in KuGompo City, which used to be East London. The brand has acquired leased premises with initial capacity for 600 students, though we have the option to increase that to nearly 4,500 on the same site over time. Then a quick word on our online business. Whilst contact student growth has been exceptional, we are also very focused on growing distance enrollments. As part of that drive, we have been adding contact centers to our existing campuses. These provide distance students with access to devices, the internet, and collaboration spaces.

Speaker #2: The brand has acquired leased premises with an initial capacity for 600 students. There, we have the option to increase that to nearly 4,500 on the same site over time.

Speaker #2: And then a quick word on our online business. Whilst contact student growth has been exceptional, we're also very focused on growing distance enrollments. And, as part of that drive, we've been adding contact centres to our existing campuses.

Speaker #2: And these provide distance students with access to devices, the internet, and collaboration spaces. So, six centres are now up and running, with two to follow soon in Durban and at the new site I just showed you, in Mbombela.

Geoff Whyte: Six centers are now up and running, with two to follow soon in Durban and the new site I just showed you, and in Mbombela. These facilities are proving to be extremely popular, with utilization levels running at around 97%. This initiative is helping us aggressively grow distance student numbers, as shared earlier. A quick update on Rosebank International in Ghana. We are currently in our first year of operation, with enrollments running slightly ahead of business case. We opened with university college status and are confident that we will become a full university next year. We have plans to expand both contact and distance enrollments from this site, specializing in post-graduate qualifications. Moving on to resourcing. The unexpected closure of USAID in February last year continues to impact our Africa resourcing business, which is the bulk of the division.

Speaker #2: And these facilities have proven to be extremely popular, with utilisation levels running at around 97%. This initiative is helping us aggressively grow distance student numbers, as shared earlier.

Speaker #2: And then a quick update on Rosebank International in Ghana. We are currently in our first year of operation, with enrollments running slightly ahead of the business case.

Speaker #2: We opened with university college status and are confident that we'll become a full university next year. We have plans to expand both contact and distance enrollments from this site, specializing in postgraduate qualifications.

Speaker #2: And then, moving on to resourcing. The unexpected closure of USAID in February last year continues to impact our Africa resourcing business, which is the bulk of the division.

Speaker #2: And having pivoted away from clients dependent on US funding, we expect year-on-year performance to be better in the second half. On the plus side, overall margins in this division improved from 6.5% to 6.8%.

Geoff Whyte: Having pivoted away from clients dependent on US funding, we expect year-on-year performance to be better in the H2. On the plus side, overall margins in this division improved from 6.5% to 6.8%. As covered earlier, divisional revenue and operating profit were down 15% and 12% respectively at the half year. Despite this, operating profit is still achieving a compound annual growth rate of 6% over five years. I would like to hand over to our CFO, Hannes Boonzaaier, to take you through some further analysis of the numbers.

Speaker #2: And then, as covered earlier, divisional revenue and operating profit were down 15% and 12%, respectively, at the half year. Despite this, operating profit is still achieving a compound annual growth rate of 6% over five years.

Speaker #2: And now I'd like to hand over to our CFO, Johannes Boonzaaier, to take you through some further analysis of the numbers.

Speaker #1: Good morning, everyone in the room, and those online as well. From my side, it's a pleasure to present to you the snapshot of the balance sheet for 30 June.

Hannes Boonzaaier: Good morning, everyone in the room and those online as well. From my side, a pleasure to present to you the snapshot on the balance sheet for 30 June. I will be covering debtors, capital structure, and then we will move to shareholders' returns and dividends as well, and our investor dashboard. Let us start with the most important forward indicator, and that is whether people want to pay for our services that we deliver on a daily basis, and that is the debtors tracking. On the slide, as presented before, I am just going to take you through the slide itself. We have got the group revenue at the top line, then we have got the education revenue, and then the stack bars, of course, the debtors balances and the bad debts provisions for the full years.

Speaker #1: I'll be covering debtors, capital structure, and then we'll move to shareholders, returns and dividends as well, and our investor dashboard. But let's start with the most important forward indicator, and that is whether people want to pay for our services that we deliver on a daily basis—and that is the debtors tracking.

Speaker #1: On the slide, as presented before, I'm just going to take you through the slide itself. We've got the group revenue at the top line.

Speaker #1: Then we've got the education revenue, and then the stacked bars, of course, the debtors' balances and the loss of the debtors' provisions for the full years.

Speaker #1: But our long-term tracking is indicating to us that we're growing education revenue at 13%, and our gross debtors are only increasing by 9%, which already indicates a good debtors track record over the period.

Hannes Boonzaaier: Our long-term tracking is indicating to us that we are growing education revenue at 13% and our gross debtors are only increasing by 9%, which really indicates a good debtors, can I say, track record over the period. For this six months, we have actually exceeded that expectation. Debtors only increasing by 5%, yet education revenue increasing by 13%. That ultimately gives you an 11.5% debtors to education revenue, which over the five-year period is 4% less than what we have had in 2022. I think with that debtors performance, it then starts driving indication of what should the bad debts provision be, and that is sitting at 46.8%. Again, a 0.8% differential on what we have had in prior years. Let us go and have a look at what the ZAR impact is of all of this. Similar slides in terms of the debtors balance and the loss allowance coverage.

Speaker #1: For this six months, we've actually exceeded that expectation. Debtors only increased by 5%, yet education revenue increased by 13%. That ultimately gives you an 11.5% debtors to education revenue ratio, which over the five-year period is 4% less than what we had in 2022.

Speaker #1: I think with that debtor's performance, it then starts driving the indication of what the bad debts provision should be, and that is sitting at 46.8%.

Hannes Boonzaaier: I think with that debtors performance, it then starts driving indication of what should the bad debts provision be, and that is sitting at 46.8%. Again, a 0.8% differential on what we have had in prior years. Let us go and have a look at what the ZAR impact is of all of this. Similar slides in terms of the debtors balance and the loss allowance coverage.

Speaker #1: Again, a 0.8% differential on what we've had in prior years. But let's go and have a look at what the rand impact is of all of this.

Speaker #1: So, similar slides in terms of the debtors balance and the loss allowance coverage. But now, the credit losses are added. And just a reminder: the credit losses are a combination of bad debts recovered, bad debts written off, as well as the movement in the provision.

Hannes Boonzaaier: The credit losses are added. Just a reminder, the credit losses is a combination of the bad debts recovered, bad debts written off, as well as the movement in the provision. As you can see in the past, the mid-year point is usually two-thirds of the full year balance. When you look at 2025, 2024, et cetera, what those mid-year balances were, ZAR 119 million last year, ZAR 158 million full year. At this stage, again, we have been tracking quite well with a lower number at ZAR 115 million on credit losses, and I think that sets us up nicely for a full 2026 year of where we are going to be on the credit loss percentage. This six months already, we are sitting at 2.6%. You will recall that at the 31 December number, the last year, we were already at 2%.

Speaker #1: And as you can see, in the past the mid-year point is usually two-thirds of the full-year balance. When you look at '25, '24, etc., what those mid-year balances were—119 last year, 158 full-year.

Speaker #1: At this stage, again, we've been tracking quite well with a lower number—115 million rand on credit losses—and I think that sets us up nicely for a full 2026 year, in terms of where we're going to be on the credit loss percentage.

Speaker #1: It's six months already, and we're sitting at 2.6%. You'll recall that at the 31 December number last year, we were already at 2%. So again, the objective is this year to get to 2% or better on credit losses, which I think is a fantastic number for every rand that we bill.

Hannes Boonzaaier: The objective is this year to again get to 2% or better on credit losses, which I think is a fantastic number. For every rand that we bill, we only actually write off two rand. More importantly is also the patterns in which our clients do pay us, and that is fees in advance, how we receive money throughout the year. You recall at year-end, there is always a balance that people have paid upfront for the next academic year. At mid-year, this is actually important to track in line with our revenue. You can see there that 8% growth is in line with our revenue in terms of how we are receiving the funds throughout the year. Maybe more importantly is to see what actually hits the bank account in terms of our cash flow. The cash flow determines so much in our business.

Speaker #1: We only actually write off two rand. More importantly, it's also the patterns in which our clients do pay us, and that is fees in advance, how we receive money throughout the year.

Speaker #1: You’ll recall that at year-end, there is always a balance that people have paid upfront for the next academic year, but at mid-year, this is actually important to track in line with our revenue.

Speaker #1: So you can see there that the 8% growth is in line with our revenue in terms of how we are receiving the funds throughout the year.

Speaker #1: But maybe more importantly is to see what actually hits the bank account in terms of our cash flow. The cash flow determines so much in our business.

Speaker #1: It determines the whole investment that we have in capital expenditure—our whole view on capital structure. So, the cash flow performance is an extremely important indicator for us.

Hannes Boonzaaier: It determines the whole investment that we have in CapEx, our whole view on capital structure. The cash flow performance is extremely important indicator for us. This year, we have again been predominantly, can I say, for a business that is delivering a service, majority of costs being personnel costs. Your operating profit and your performance and your cash should match each other, and that has been 13%. Of course, it is running a little bit lower on the CAGR, 15%, but coming off a high base. How is this cash looking with regards to our debt that we have in the business? Again, just a reminder, a lot of the CapEx takes place in the H2 of the financial year. You do not have the biggest CapEx in the first six months. I think we have made progress.

Speaker #1: This year, we've again been predominantly—can I say, for a business that is delivering a service, the majority of costs are personnel costs—your operating profit, your performance, and your cash should match each other, and that has been 13%.

Speaker #1: Of course, it's running a little bit lower on the key guard—15%—but coming off a high base. How's this cash looking with regards to our debt that we have in the business?

Speaker #1: And again, just a reminder: a lot of the capital expenditure takes place in the second half of the financial year. So you don't have the biggest capital expenditure in the first six months, but I think we've made progress.

Hannes Boonzaaier: I had a lot of comments on increasing gearing. As you can see from prior year, at a ZAR 30 million net debt situation at 30 June, we have increased it by about ZAR 100 million, where we are standing now. Our CapEx is mostly pivoted towards additional capacity, as Geoff has noted. We have got a 23% increase on this CapEx from prior year numbers. The spend on IT, furniture is more a replenishment and continuous maintenance of our campuses. The existing sites, of course, is increasing capacity. As you have seen from the enrollment numbers that we have experienced, we do need to plan for the future. In this six months, we have also had a cost for the support office relocation, which is the old Emirates building in Benmore that we have repurposed for our head office relocation. The old head office was, of course, a leased property.

Speaker #1: I had a lot of comments on increasing gearing. And as you can see from the prior year, at a 30 million rand net debt situation at 30 June, we've increased it by about 100 million rand to where we're standing now.

Speaker #1: Our capital expenditure is mostly pivoted towards additional capacity, as Geoff has noted. We've got a 23% increase in this capital expenditure from prior year numbers.

Speaker #1: The spend on IT and furniture is more of a replenishment and continuous maintenance of our campuses. The existing sites, of course, are increasing capacity, as you've seen from the enrollment numbers that we've experienced.

Hannes Boonzaaier: The existing sites, of course, is increasing capacity. As you have seen from the enrollment numbers that we have experienced, we do need to plan for the future. In this six months, we have also had a cost for the support office relocation, which is the old Emirates building in Benmore that we have repurposed for our head office relocation. The old head office was, of course, a leased property.

Speaker #1: We do need to plan for the future. And then, in this six months, we've also had a cost for the support office relocation, which is the old Emirates building in Benmore that we've repurposed for our head office relocation.

Speaker #1: The old head office was, of course, a leased property. This leads me into the impact of the increased spending on our overall debt ratio.

Hannes Boonzaaier: This leads me into the impact of the increased spending on our overall debt ratio. We have been working quite hard in terms of seeing how can we improve our capital structure. Just a reminder again, our debt comprises two major components, the lease liabilities as well as the bank borrowings. Lease liability is fairly flat year on year. Bank borrowings increased by ZAR 100 million. We have been able to just pivot slightly from prior year numbers, from 23% to 24% on our debt equity in mid-year. I have just added on the full year numbers that you can see how big jump we see on that debt number comes through to year-end. There is a good 15% jump when we get to full year.

Speaker #1: And we've been working quite hard in terms of seeing how we can improve our capital structure. And just a reminder again that our debt comprises two major components: the lease liabilities as well as the bank borrowings.

Speaker #1: Leased liabilities were fairly flat year on year, and then, of course, bank borrowings increased by R100 million. We've been able to just pivot slightly from prior year numbers, from 23% to 24% on our debt-to-equity in mid-year, and then I've just added on the full-year numbers so you can see how the big jump on that debt number comes through to year end.

Speaker #1: So, there's a good 15% jump when we get to the full year. At the bottom is also a description of a lot of our major projects that we've been investing in during the past periods and comparable periods.

Hannes Boonzaaier: At the bottom is also a description of a lot of our major projects that we have been investing in in the past periods and comparable periods. Notably in this period has been the big share buyback and the expansions that you have seen at the Pinnacle Colleges as well as Rosebank International campuses. Our return on equity and return on invested capital, I am not disclosing a full year number yet. I think we are still at H1, but I am very positive that the trends that we have seen from 2024 to 2025 will definitely flow through into our 2026 number. Last year, we have reached the 20% on the ROE, looking very positive to even a bigger number this year. We also, last year, incorporated the ROIC metric, which is actually a metric on all capital funds that is being used by the group to measure ourselves on that.

Speaker #1: Notable in this period has been the significant share buyback and then the expansions that you've seen at the Pinnacle colleges, as well as Rosebank International campuses.

Speaker #1: Our return on equity and return on invested capital are not disclosing a full-year number yet. I think we're still at half-year, but I'm very positive that the trends that we've seen from '24 to '25 will definitely flow through into our 2026 number.

Speaker #1: Last year, we reached 20% on the ROE, looking very positive for an even bigger number this year. We also, last year, incorporated the ROIC metric, which is actually a metric on all capital funds being used by the group to measure ourselves on that.

Hannes Boonzaaier: Last year, we have reached the 20% on the ROE, looking very positive to even a bigger number this year. We also, last year, incorporated the ROIC metric, which is actually a metric on all capital funds that is being used by the group to measure ourselves on that.

Speaker #1: And again, looking good for another half or even a percent increase on that metric. So for shareholders, it's all great that we have percentages, but I guess they want to know what hits their pocket, and that is always dividends.

Hannes Boonzaaier: Again, looking good for another half or even a percent increase on that metric. For shareholders, it is all great that we have percentages, but I guess they want to know what hits their pocket, and that is always dividends. This year we have a dual benefit to shareholders. We have had the dividend itself, which will be payable in September, and we also embarked on a share buyback program of 1% of the share capital of the group. We are still declaring our dividend within the policy that was agreed in 2024, which is a two times cover, and that continues. Again, we monitor it consistently with regards to future capital needs. I think for those that have reviewed the long form statement can even see the increase in our capital commitments from the March numbers we disclosed to now.

Speaker #1: This year, we have a dual benefit to shareholders. We've had the dividend itself, which will be payable in September, and we also embarked on a share buyback program of 1% of the share capital of the group.

Speaker #1: We are still declaring our dividend within the policy that was agreed in 2024, which is a two-times cover, and that continues. Again, we monitor it consistently with regard to future capital needs.

Speaker #1: And I think, for those that have reviewed the long-form statement, you can even see the increase in our capital commitments from the March numbers we disclosed to now.

Speaker #1: Our investment committee is quite busy with regards to looking at new opportunities for expansion. We've been very pleased with the share buyback. Current trading levels are definitely much higher than the average price at which we were buying the shares during the April to June period.

Hannes Boonzaaier: Our investment committee, quite busy with regards to looking at new opportunities for expansion. We have been very pleased with the share buyback. Current trading levels definitely much higher than the average price that we were buying the shares up during the April to June period. Just overall, over the long term, where are our shares tracking? I think if you look at the CAGR, significant percentage, but keep in mind the change in policy to a little bit of different coverage that we had in 2024, and that is a 24% to 25% long-term average on the dividend declaration. This period, I have added the effect of the share buyback and what it actually means in cents.

Speaker #1: So just overall, over the long term, where are our shares tracking? I think if you look at the K Guard, it’s a significant percentage, but keep in mind the change in policy to a little bit of different coverage that we had in 2024, and that is a 24% to 25% long-term average on the dividend declaration.

Speaker #1: But for this period, I've added the effect of the share buyback—and what it actually means in cents. I know people would maybe prefer to get this money in their bank account, but you own 1% more of Advtech at the end of the day, and that represents 44 cents that we've added on to the interim dividend.

Hannes Boonzaaier: I know people would want to maybe get this money in their bank account, but you own 1% more of Advtech at the end of the day, and that represents 44 cents that we have added on to the interim dividend. Close to ZAR 1 that we are declaring to our shareholders. Just a quick wrap-up on the investor dashboard is that, where is our profit margins going to move towards in the future? I think one has got to track and see how are various divisions contributing to the profit levels in the group. SA Schools, again, very stable business. I always say you have got a student for seven to nine years. You need that foundation in our group. Resourcing, declining a little bit because it is not really our core business.

Speaker #1: So, close to one rand that we're declaring to our shareholders. Just a quick wrap-up on the investor dashboard—where are our profit margins going to move towards in the future?

Speaker #1: And I think one’s got to track and see how our various divisions are contributing to the profit levels in the group. SA Schools, again, very stable business.

Speaker #1: I always say you've got a student for seven to nine years. You need that foundation in our group. Resourcing is declining a little bit because it's not really our core business, but then you've got these two significantly growing divisions in the rest of Africa, as well as tertiary, that now make up nearly 63% of our business.

Hannes Boonzaaier: You have these two significantly growing divisions in the rest of Africa as well as tertiary that now makes up nearly 63% of our business. When you start mapping that against the operating margins that we see in the Africa schools and tertiary, it automatically indicates an increase of the group operating margin over the period. Just some investor metrics. What has our total shareholders' return been from a period back? 1 January 2025, which is 19 months, we are up 46%. If you then look back, say, 44, sorry, 46 months from 1 January 2023, 181%, and I think that has been a good number that has also come through. Market cap has also been an important metric for us, and again, now comfortably above that GBP 1 billion level, and we also exceeded the $1.5 billion level, which is also an objective for us. Liquidity has also improved.

Speaker #1: And when you start mapping that against the operating margins that we see in the Africa Schools and Tertiary, it automatically indicates an increase of the group operating margin over the period.

Speaker #1: Just some investor metrics. What has our total shareholder return been over the period? So, from 1 January 2025, which is 19 months, we're up 46%.

Speaker #1: If you then look back, say, 44—sorry, 46—months from January 2023, it's 181%. And I think that's been a good number. That's also come through.

Speaker #1: Market cap has also been an important metric for us, and again, we are now comfortably above that £1 billion level. We have also exceeded the $1.5 billion level, which was also an objective for us.

Speaker #1: Liquidity has also improved. If we look at the average trading volumes for the six-month period '25 to '26, they are up 19%. And then return on equity is tracking quite well.

Hannes Boonzaaier: If we look at the average trading volumes for the six months period, 2025 to 2026, up 19%, and return on equity tracking quite well. I am not going to quote a number, but I saw on the Moneyweb website yesterday, they trued up our H1 numbers. That 20.6% is currently indicated on the Moneyweb website as 21.6%. Comfortably getting above that 21% level as well. That is it from my side. Over to Geoff, and I will see you all at Q&A.

Speaker #1: I'm not going to quote a number, but I saw on the Moneyweb website yesterday—they chewed up our half-year numbers. So that 20.6% is currently indicated on the Moneyweb website as 21.6%.

Speaker #1: So, comfortably getting above that 21% level as well. But, yeah, that's nice. That's from my side. Over to Geoff, and I'll see you all at Q&A.

Speaker #2: So then, to close, I'd just like to take a quick look at how we're progressing against our strategy. This slide recaps our dual ambition as a company—to lead in every market segment in which we choose to operate.

Geoff Whyte: To close, I would just like to take a quick look at how we are progressing against our strategy. This slide recaps our dual ambition as a company. To lead in every market segment in which we choose to operate, and to be the employer of choice in the education and resourcing sectors. These goals continue to guide us. This chart is unchanged from our capital markets day two years ago, but I thought I would just recap how we are doing. It covers our strategic imperatives, and I am pleased to say that we are making significant progress on all fronts. We continue to add high-demand tertiary qualifications to both Emeris and Rosebank. Our tertiary restructure is complete, with schools following quickly behind. Our brand propositions and marketing, I think, are in very good shape with major campaigns currently in development.

Speaker #2: And to be the employer of choice in the education and resourcing sectors. And these goals continue to guide us. And then this chart is unchanged from our Capital Markets Day two years ago, but I thought I'd just recap how we're doing.

Speaker #2: It covers our strategic imperatives, and I'm pleased to say that we're making significant progress on all fronts. We continue to add high-demand tertiary qualifications to both Emirates and Rosebank.

Speaker #2: Our tertiary restructure is complete, with schools following quickly behind. Our brand propositions and marketing, I think, are in very good shape, with major campaigns currently in development.

Speaker #2: And we've made all the necessary investments to secure university status. We now wait for government. Our African operation continues to expand through both organic growth and acquisition, whilst tertiary distance enrollments, as I said earlier, have nearly doubled over the last two years.

Geoff Whyte: And we've made all the necessary investments to secure university status. We now wait for government. Our African operation continues to expand through both organic growth and acquisition, whilst tertiary distance enrollments, as I said earlier, have nearly doubled over the last two years. We've also made significant progress in building and communicating academic advantage across all our brands, and these imperatives will remain our focus as we move forward, though we still have lots of work to do. Relative to optimizing our marketing, I wanted to touch on the major sponsorship that we announced last week. We signed a three-year deal with Cricket South Africa with some very specific objectives. We want to build understanding of what Advtech uniquely brings to all our brands, which we're calling the Advtech Advantage.

Speaker #2: We've also made significant progress in building and communicating academic advantage across all our brands. These imperatives will remain our focus as we move forward.

Speaker #2: Though we still have lots of work to do. And then, relative to optimizing our marketing, I wanted to touch on the major sponsorship that we announced last week.

Speaker #2: We signed a three-year deal with Cricket South Africa with some very specific objectives. We want to build understanding of what ADvTECH uniquely brings to all our brands, which we're calling the ADvTECH Advantage.

Speaker #2: And this comes in the form of superior academic outcomes, industry-leading AI learning tools, African scale and expertise, and our social impact programs. We'll also use the opportunity to further strengthen Emirates as our premium tertiary brand and to create powerful links to our Crawford and Trinity House schools.

Geoff Whyte: This comes in the form of superior academic outcomes, industry-leading AI learning tools, African scale and expertise, and our social impact programs. We'll also use the opportunity to further strengthen Emeris as our premium tertiary brand and to create powerful links to our Crawford and Trinityhouse schools. The sponsorship is wide-ranging, and it covers CSA's national youth weeks from under 13 to under 19, as well as the men's and women's test teams. We're excited about the benefit this partnership will bring, especially with highly anticipated men's test series coming up against both Australia and England. To close, I'd like to leave you with our prospects slide. Just recapping the key points. South Africa's demographic and tertiary tailwinds remain, as does demand for quality education in all our markets.

Speaker #2: So the sponsorship is wide-ranging, and it covers CSA's National Youth Weeks from under-13 to under-19, as well as the men's and women's Test teams.

Speaker #2: And we're excited about the benefits this partnership will bring, especially with the highly anticipated Men's Test Series coming up against both Australia and England. And then to close, I'd like to leave you with our prospect slide.

Speaker #2: So, just recapping the key points: South Africa's demographic and tertiary tailwinds remain, as does demand for quality education in all our markets. Our position as the leaders in teaching and learning across the African continent is stronger than ever.

Geoff Whyte: Our position as the leaders in teaching and learning across the African continent is stronger than ever, and our financial strength and scale continue to build, as Hannes just touched on. All of this places Advtech in a strong position to continue on our current growth trajectory. That's it from the slides. I'd now like to invite Hannes back, and we'll happily take some questions. Yeah.

Speaker #2: And our financial strength and scale continue to build, as Hannes just touched on. All of this places ADvTECH in a strong position to continue on our current growth trajectory.

Speaker #2: So that's it from the slides. I'd now like to invite Hannes back, and we'll happily take some questions. Yeah.

[Analyst]: Just got two questions.

[Analyst 1]: Just got two questions.

Speaker #3: Just got two questions. How do you see education in South Africa? How do you see that developing? Is there a direction? Where do you fit?

Geoff Whyte: Yep.

[Analyst]: First one, how do you see education in South Africa? How do you see that developing? Is there a direction really useful? Is that changed? Secondly, with resources, that is another interesting question about what issues?

[Analyst 1]: First one, how do you see education in South Africa? How do you see that developing? Is there a direction really useful? Is that changed? Secondly, with resources, that is another interesting question about what issues?

Speaker #3: Has that changed? Second thing is resourcing. Touched on it, but didn't talk much about it. What?

Speaker #2: Okay. I think, in terms of the forward view on education, demographics continue to drive population growth. I think the state sector, in many places and schools, continues to struggle.

Geoff Whyte: Okay. I think in terms of the forward view on education, demographics continue to drive population growth. I think the state sector in many places in schools continues to struggle. That helps us. I think the disarray in the public universities, where they are not only capped in terms of places, but the quality of what they deliver from a teaching and learning point of view is deteriorating, also gives us a nice tailwind. I think we have some upside to tap into. If you look at how we are responding to that, I think when Curro were still reporting numbers, they were reporting declines in enrollments, and we were reporting growth. I think we are growing share in schools. If you look at our listed competitor in the tertiary space, they are reporting a growth in enrollments of around 9%. As you just saw, we are reporting 19%.

Speaker #2: That helps us. And I think the disarray in the public universities, where they're not only capped in terms of places, but the quality of what they deliver from a teaching and learning point of view is deteriorating, also gives us a nice tailwind.

Speaker #2: So I think we've got some upside to tap into. And if you look at how we're responding to that, I think when Kuro were still reporting numbers, they were reporting declines in enrollments and we were reporting growth.

Speaker #2: So I think we're growing share in schools. And if you look at our listed competitor in the tertiary space, they're reporting a growth in enrollments of around 9%.

Speaker #2: And as you just saw, we're reporting 19. So, I think we're growing significant share in both schools and in tertiary in what is a growing market.

Geoff Whyte: I think we are growing significant share in both schools and in tertiary in what is a growing market. We are pretty bullish about the forward picture. In terms of resourcing, I think that has been a good business for us. It has shown some very good growth over the last few years. We have had the setback of losing 10% of our clients that were attached to US funding, the USAID that I mentioned earlier. That is a relatively short-term hit. We have pivoted away from US-dependent payroll management contracts. That is the bulk of the business. As I said in the slides, I think performance will be better in the H2. I do not know if you want to add anything to that, Hannes?

Speaker #2: So, we're pretty bullish about the forward picture. And then, in terms of resourcing, I think that's been a good business for us. It's shown some very good growth over the last few years.

Speaker #2: We have had the setback of losing 10% of our clients that were attached to US funding—the US aid that I mentioned earlier. That is a relatively short-term hit.

Speaker #2: We've pivoted away from US-dependent payroll management contracts. That's the bulk of the business. And as I said in the slides, I think performance will be better in the second half.

Speaker #2: Don't know if you want to add anything to that, Hannes?

Speaker #4: 100%.

Hannes Boonzaaier: 100%.

Speaker #2: Happy. Okay, thank you. Good question. Yeah.

Geoff Whyte: Happy. Okay. Thank you. Good question.

Speaker #3: So, I need to wait for a microphone.

[Analyst]: Do I need to wait for a microphone?

[Analyst 2]: Do I need to wait for a microphone?

Speaker #2: Oh, sure. Sure, we can get you one. There we go.

Geoff Whyte: Sure, we can get you one. There we go. Morning, Geoff. Morning.

Geoff Whyte: Sure, we can get you one. There we go.

Speaker #4: Morning, Geoff.

[Analyst 2]: Morning, Geoff.

Speaker #2: Morning.

Geoff Whyte: Morning.

Speaker #4: First of all, congratulations on a very powerful and impressive set of results. This organization has been built far beyond my expectations when I retired.

[Analyst]: First of all, congratulations on a very powerful and impressive set of results. This organization has been built far beyond my expectations when I retired. I have a few observations and questions, however. The first is your distance education enrollment has grown rapidly in the tertiary space and is an exciting opportunity. What is, in fact, your strategy regarding the mix of face-to-face and distance students? Because it seems to me that there is a much smaller CapEx requirement per distance student that makes it perhaps easier and less costly in many ways to grow the distance. I think that is a very exciting opportunity for Advtech, and I would like to hear your thoughts on the strategy. Congratulations on the progress thus far.

[Analyst 2]: First of all, congratulations on a very powerful and impressive set of results. This organization has been built far beyond my expectations when I retired. I have a few observations and questions, however. The first is your distance education enrollment has grown rapidly in the tertiary space and is an exciting opportunity. What is, in fact, your strategy regarding the mix of face-to-face and distance students? Because it seems to me that there is a much smaller CapEx requirement per distance student that makes it perhaps easier and less costly in many ways to grow the distance. I think that is a very exciting opportunity for Advtech, and I would like to hear your thoughts on the strategy. Congratulations on the progress thus far.

Speaker #4: I have a few observations and questions, however. The first is, your distance education enrollment has grown rapidly in the tertiary space, and that's an exciting opportunity.

Speaker #4: What is, in fact, your strategy regarding the mix of face-to-face and distance students? Because it seems to me that there is a much smaller capex requirement per distance student, which makes it perhaps easier and less costly in many ways to grow the distance segment.

Speaker #4: And I think that is a very exciting opportunity for Advtech, and I would like to hear your thoughts on the strategy. Congratulations on the progress thus far.

[Analyst]: Thanks.

Geoff Whyte: Thanks.

Speaker #4: My second comment is on the share buyback. Much was made of it by Hannes, but still, it's R250 million in the face of a R25 or R26 billion market cap.

[Analyst]: My second comment is on the share buyback. Much was made of it by Hannes. Still, it is ZAR 250 million in the face of a ZAR 25, 26 billion market cap. Is it really material? Perhaps you can comment on the thinking around the value and validity of a share buyback. It concerns me that it potentially shows a negative in the sense that the board and management may not know what to do with the massive cash flow you have control over, and therefore simply opt to give it back to the shareholders in the form of a buyback. I think you need to give a more positive justification for a share buyback to overcome that concern.

[Analyst 2]: My second comment is on the share buyback. Much was made of it by Hannes. Still, it is ZAR 250 million in the face of a ZAR 25, 26 billion market cap. Is it really material? Perhaps you can comment on the thinking around the value and validity of a share buyback. It concerns me that it potentially shows a negative in the sense that the board and management may not know what to do with the massive cash flow you have control over, and therefore simply opt to give it back to the shareholders in the form of a buyback. I think you need to give a more positive justification for a share buyback to overcome that concern.

Speaker #4: Is it really material? And perhaps you can comment on the thinking around the value and validity of a share buyback. It concerns me that it potentially shows a negative, in the sense that the board and management may not know what to do with the massive cash flow you have control over.

Speaker #4: And therefore, simply opt to give it back to the shareholders in the form of a buyback. I think you need to give a more positive justification for a share buyback to overcome that concern.

Speaker #4: And in that regard, I note your free cash flow per share—which is a special report, non-IFRS, that you have persisted with—shows free cash flow of about $2.3 billion.

[Analyst]: And in that regard, I note your free cash flow per share, which is a special report, non-IFRS that you have persisted with, shows free cash flow of about ZAR 2.3 billion in this period. The dividend commitment is about ZAR 400 million. So there is a lot of spare cash lurking around, and what, in fact, is the strategy for that? And then my next comment is

[Analyst 2]: And in that regard, I note your free cash flow per share, which is a special report, non-IFRS that you have persisted with, shows free cash flow of about ZAR 2.3 billion in this period. The dividend commitment is about ZAR 400 million. So there is a lot of spare cash lurking around, and what, in fact, is the strategy for that? And then my next comment is

Speaker #4: In this period, the dividend commitment is about $400 million. So, there's a lot of spare cash lurking around. And what, in fact, is the strategy for that?

Speaker #4: And then my next comment is,

Speaker #2: So, I'm just moving on to page two of my notes here.

Geoff Whyte: I am just moving on to page 2 of my notes here.

Speaker #4: That's okay. I thought I'd give them all to you at once so you can decide whether to answer or not. My next comment is Emirates now has 60,000 students.

[Analyst]: That is okay. I thought I would give them all to you at once. You can decide whether to answer or not. My next comment is Emeris now has 60,000 tertiary students, which represents a behemoth of a university, and one which can no longer, I think, simply peck away at the market share of the state universities.

[Analyst 2]: That is okay. I thought I would give them all to you at once. You can decide whether to answer or not. My next comment is Emeris now has 60,000 tertiary students, which represents a behemoth of a university, and one which can no longer, I think, simply peck away at the market share of the state universities.

Speaker #4: In tertiary students, which represents a behemoth of a university and one which can no longer, I think, simply peck away at the market share of the state universities.

Speaker #2: I think we're doing a little more than pecking away, but anyway.

Geoff Whyte: I think we are doing a little more than pecking away, but anyway.

Speaker #4: But I would like you to comment on the future and the strategic thinking about Emirates tertiary. I think the new campus that you've explained to us about in Natal is a very real threat to the Natal universities.

[Analyst]: But I would like you to comment on the future and the strategic thinking about Emeris Tertiary. I think the new campus that you have explained to us about in Natal is a very real threat to the Natal universities. It seems to me that Advtech is building for itself and needs to accept perhaps a role that is a strategic building block of the South African education system, and can no longer define its strategy in terms of taking market share away from the publics. It is a driver in and of itself. My next observation is many South African-listed companies have caught some sort of disease in Africa that has hurt them badly and caused them to fall flat on their faces. I do not need to give you the examples, but the latest one is perhaps Absa.

[Analyst 2]: But I would like you to comment on the future and the strategic thinking about Emeris Tertiary. I think the new campus that you have explained to us about in Natal is a very real threat to the Natal universities. It seems to me that Advtech is building for itself and needs to accept perhaps a role that is a strategic building block of the South African education system, and can no longer define its strategy in terms of taking market share away from the publics. It is a driver in and of itself. My next observation is many South African-listed companies have caught some sort of disease in Africa that has hurt them badly and caused them to fall flat on their faces. I do not need to give you the examples, but the latest one is perhaps Absa.

Speaker #4: And it seems to me that Advtech is building for itself and needs to accept, perhaps, a role that is a strategic building block of the South African education system.

Speaker #4: And can no longer define its strategy in terms of taking market share away from the publics. It is a driver in and of itself.

Speaker #4: My next observation is that many South African listed companies have caught some sort of disease in Africa that has hurt them badly and caused them to fall flat on their faces.

Speaker #4: And I don't need to give you the examples. But the latest one is perhaps ABSA. How, in fact, is Advtech thinking strategically to avoid the African disease?

[Analyst]: How, in fact, is Advtech thinking strategically to avoid the African disease? Given that a significant part of your future seems to lie in Africa, outside South Africa, how will you ensure that the growth remains healthy and vigorous and not prone to the African disease of borrowing expensive dollars, but only realizing a revenue in a weak local currency, which seems to be a summary of the major cause of the African disease? Finally, I would just like to ask you talked about the strength and power of the academic machine you are building. I would like to get an indication of the employment of, let us just use it as a benchmark, PhD graduates in the Advtech organization, and how does that compare with a major public university? Thanks, Geoff. Sorry, that is a bit of a mouthful, but there you go.

[Analyst 2]: How, in fact, is Advtech thinking strategically to avoid the African disease? Given that a significant part of your future seems to lie in Africa, outside South Africa, how will you ensure that the growth remains healthy and vigorous and not prone to the African disease of borrowing expensive dollars, but only realizing a revenue in a weak local currency, which seems to be a summary of the major cause of the African disease? Finally, I would just like to ask you talked about the strength and power of the academic machine you are building. I would like to get an indication of the employment of, let us just use it as a benchmark, PhD graduates in the Advtech organization, and how does that compare with a major public university? Thanks, Geoff. Sorry, that is a bit of a mouthful, but there you go.

Speaker #4: And given that a significant part of your future seems to lie in Africa outside South Africa, how will you ensure that the growth remains healthy and vigorous?

Speaker #4: And not prone to the African disease of borrowing expensive dollars, but only realizing revenue in a weak local currency—which seems to be a summary of the major cause of the African disease.

Speaker #4: And then finally, I would just like to ask you: you talked about the strength and power of the academic machine you're building. I would like to get an indication of the employment of—let's just use it as a benchmark—PhD graduates.

Speaker #4: In the Advtech organization, and how does that compare with a major public university? Thanks, Geoff. Sorry, that's a bit of a mouthful, but there you go.

Speaker #2: Thanks. Thanks, Frank. Those were some great questions. First of all, you spoke about distance and the rapid growth. Our interest in distance is rooted in a couple of areas.

Geoff Whyte: Thanks, Frank. Those are some great questions. First of all, you spoke about distance and the rapid growth. Our interest in distance is rooted in a couple of ways. First of all, we think that contact and distance are two separate markets. Contact is your average 19-year-old who is looking for the full university experience, doing a first degree. Distance appeals to people who are older, maybe in their 30s and working and looking to further their career. So they are two separate markets. There is very little cannibalization between the two, so we want to maximize both. Our intent, I do not think we have got a target in terms of the proportion of contact and distance. We want to maximize both. If our strategy is to lead in all the market segments we operate in, we would like to be number 1 in contact and number 1 in distance.

Speaker #2: So, first of all, we think that contact and distance are two separate markets. Contact is your average 19-year-old who is looking for the full university experience, doing a first degree.

Speaker #2: Distance appeals to people who are older, maybe in their 30s and working, and looking to further their career. So they're two separate markets. There's very little cannibalization between the two.

Geoff Whyte: There is very little cannibalization between the two, so we want to maximize both. Our intent, I do not think we have got a target in terms of the proportion of contact and distance. We want to maximize both. If our strategy is to lead in all the market segments we operate in, we would like to be number 1 in contact and number 1 in distance.

Speaker #2: So we want to maximize both. Our intent—I don't think we've got a target in terms of the proportion of contact and distance. We want to maximize both.

Speaker #2: So, if our strategy is to lead in all the market segments we operate in, we'd like to be number one in contact, and number one in distance.

Speaker #2: So we've nearly doubled enrollments in the last two years. I think we've made a good start, and we will continue to drive that. I think the Ghanaian university gives us the opportunity to grow in both contact and distance.

Geoff Whyte: We have nearly doubled enrollments in the last two years. I think we have made a good start, and we will continue to drive that. I think the Ghanaian university gives us the opportunity to grow in both contact and distance, but distance, particularly into West Africa, with the credibility of hoping that we get full university status next year. So that is the plan on distance, but aggressive growth and looking to lead in that sector the way that we do currently in contact. In terms of the buyback, we see ourselves most definitely as a growth stock, and we have a very significant investment program and a very exciting pipeline of opportunities. So we want to address our capital structure and be under-geared, but our preference is to find exciting investment opportunities. As I say, we have got a very exciting program that we are looking at there.

Speaker #2: But distance, particularly into West Africa, with the credibility of hoping that we get full university status next year. So that's the plan on distance.

Speaker #2: But aggressive growth and looking to lead in that sector the way that we do currently in contact. In terms of the buyback, we see ourselves most definitely as a growth stock.

Speaker #2: And we have a very significant investment program and a very exciting pipeline of opportunities. So we want to address our capital structure and be under-geared.

Speaker #2: But our preference is to find exciting investment opportunities. And, as I say, we've got a very exciting program that we're looking at there. In the interim, to help the capital structure, we felt the right thing to do was to go with what you yourself described as a relatively small share buyback.

Geoff Whyte: In the interim, to help the capital structure, we felt the right thing to do was to go with what you yourself described as a relatively small share buyback. We are balancing investment for growth and getting closer to our ideal capital structure. I do not know if you want to comment on that one, Hannes.

Speaker #2: So we're balancing investment for growth and getting closer to our ideal capital structure. I don't know if you want to comment on that one, Hannes.

Speaker #3: Sure, Geoff. Yeah. If you look at our past performance, when we look at total cash generation after capex, after dividends, we were sitting with an excess of about R4.5 billion per year.

Hannes Boonzaaier: Sure, Geoff. If you look at our past performance, when we look at total cash generation after CapEx, after dividends, we were sitting with an excess of about 400, 500 million ZAR per year, and that drove down a lot of our debt. That is the starting point. That is the excess cash that we had at the end of the year. A year ago, we started a lot in terms of looking at capacity, looking at growth opportunities. As you have seen in the capital commitments, we have committed to more than 2 billion ZAR worth of projects over the next three years. Emeris Durban, of course, being the biggest, but many of the others noted by Geoff.

Speaker #3: And that drove down a lot of our debt. So that's the starting point. That's the excess cash that we had at the end of the year.

Speaker #3: A year ago, we started a lot in terms of looking at capacity, looking at growth opportunities. And as you've seen in the capital commitments, we have committed to more than R2 billion worth of projects over the next three years.

Speaker #3: Emirates Durban, of course, being the biggest. But many of the others noted by Geoff. So that's giving us a good R2 billion of capex to be invested up to mid-2018, 2029, which starts consuming this R4,500 million that we're generating every year.

Hannes Boonzaaier: That is giving us a good 2 billion ZAR of CapEx to be invested up to mid 2028, 2029, which starts consuming this 400, 500 million ZAR that we are generating every year. In the interim, we actually said, "Well, because we have got a surplus from 2025, let us start getting into the share buyback game." We are very confident in terms of our projection for the rest of 2026. But the commitment to making much larger share buybacks is driven by what is in the pipeline on the capital commitment side. I think it has been a good start. We are very open to it, and it is a very, can I say, flexible model to give money back to a shareholder in the short term. So it has been positively accepted and it was a start.

Speaker #3: In the interim, we've actually said, well, because we've got a surplus from 2025, let's start getting into the share buyback game. We're very confident in terms of our projection for the rest of 2026.

Speaker #3: But the commitment to making much larger share buybacks is driven by what is in the pipeline on the capital commitment side. I think it's been a good start.

Speaker #3: We're open to it, and it's a very—can I say—flexible model to give money back to your shareholders in the short term. So, it's been positively accepted.

Speaker #3: And it was a start. We will be considering that a bit more. But I think the cash generation from future projects is important to consider in the next three years.

Hannes Boonzaaier: We will be considering a bit more on that, but I think the cash generation future projects is important to consider in the next three years.

Speaker #2: Thanks. Then you mentioned Emirates, and the fact that that is becoming very sizable, and what our future plans are there. The market is a very interesting dynamic.

Geoff Whyte: Thanks. Then you mentioned Emeris and the fact that is becoming very sizable and what our future plans are there. The market is a very interesting dynamic. I think we've experienced the tailwind of a cap on state places for the last couple of years. There is a fast-emerging second tailwind, which is the deterioration in the quality of teaching and learning in those public universities. We've got some interesting research on that. 66% of students, two-thirds, going to Emeris in the first year now tell us that we are their first-choice institution. I think we need to continue to build advantage in systems, security, facilities, all of those things, so that we are a better choice. You mentioned the new development, KZN. I think the KZN university situation from a state point of view is poor and deteriorating. I think it's a big opportunity for us.

Speaker #2: I think we've experienced the tailwind of a cap on state places for the last couple of years. There is a fast-emerging second tailwind, which is the deterioration in the quality of teaching and learning in those public universities.

Speaker #2: We've got some interesting research on that. Sixty-six percent of students, or two-thirds, going to Emirates in the first year now tell us that we are their first-choice institution.

Speaker #2: So, I think we need to continue to build advantage in systems, security, facilities—all of those things—so that we are a better choice.

Speaker #2: You mentioned the new development in KZN. I think the KZN university situation from a state point of view is poor and deteriorating. I think it's a big opportunity for us.

Speaker #2: So I think we'll continue to benefit from the tailwind of a cap on places, but the additional tailwind of deteriorating quality in the state system will also help us.

Geoff Whyte: I think we'll continue to benefit from the tailwind of a cap on places, but the additional tailwind of deteriorating quality in the state system will also help us. We've got some quite ambitious plans to grow both Emeris and Vega. I don't know if you want to add anything on to that, Hannes.

Speaker #2: So we've got some quite ambitious plans to grow both Emirates and Vega. I don't know if you want to add anything to that, Hannes.

Speaker #3: Nothing from my side.

Hannes Boonzaaier: Nothing from my side.

Speaker #2: Happy. Okay. Yeah. The Emirates-Vega sector is very much people graduating from private school; it's around the same sort of price as our average private school fee point.

Geoff Whyte: Happy. Okay. The Emeris-Vega sector is very much people graduating from private school. It's around the same sort of price as our average private school fee point. For Rosebank, we're much more into the main market. The average fee price point, ZAR 90,000, ZAR 95,000 for Emeris, but about ZAR 35,000 for Rosebank.

Speaker #2: For Rosebank, we're much more into the main market. So the average fee price point is 90,000 to 95,000 for Emirates, but about 35,000 for Rosebank. Okay.

[Analyst]: The degrees.

[Analyst 2]: The degrees.

Geoff Whyte: Well, I think in Emeris, we have been heavily invested in degrees and honors and looking forward at more post-graduate qualifications. Historically, we have been focused on ordinary degrees in Rosebank. We are adding honors and adding PhDs, and we are looking to expand research in both institutions. So that is the history. The LSM profile, upper end for Emeris, more main market for Rosebank. You also asked about avoiding failure in Africa, which I think is a very good question. I think we have been very choiceful about the countries that we have gone into, and that is important. I think we have got growing expertise, scale in the markets we are in, which is an insulation against market risk. I think being in a small number of carefully chosen countries gives us a portfolio, which again, is a risk-reducing move. You also talked about funding.

Speaker #2: Well, I mean, I think in Emirates we've been heavily invested in degrees and honours, and looking forward at more postgraduate qualifications. Historically, we've been focused on ordinary degrees in Rosebank.

Speaker #2: We're adding honors and adding PhDs, and we're looking to expand research in both institutions. So that's the history. Okay. The LSM profile: upper end for Emirates, more main market for Rosebank.

Speaker #2: Okay. So, and then you also asked about avoiding failure in Africa, which I think is a very good question. I think we've been very choiceful about the countries that we've gone into.

Speaker #2: And that’s important. I think we’ve got growing expertise and scale in the markets we’re in, which is an insulation against market risk. I think being in a small number of carefully chosen countries gives us a portfolio which, again, is a risk-reducing move.

Speaker #2: You also talked about funding. Unless we have a really large capital requirement, we have been funding African expansion with funds generated in Africa. And I think the other—just the structure of our business—insulates us to quite a big degree from risk.

Geoff Whyte: Unless we have a really large capital requirement, we have been funding African expansion with funds generated in Africa. I think just the structure of our business insulates us to quite a big degree from risk. We operate on higher margins. The teaching costs in those African markets are about 20% lower than South Africa. You saw the margin numbers in the presentation. We also have local supply chains. We have got very little in the way of USD-based costs. About the only thing we buy in USD are software licenses, and they are very small. I think we have got high GDP growth, high population growth, and we have high levels of urbanization and less competition than South Africa. So it is a big market opportunity, and we have made a number of moves to mitigate risk. But we still see that as an attractive area to pursue going forward.

Speaker #2: We operate on higher margins. The teaching costs in those African markets are about 20% lower than in South Africa. You saw the margin numbers in the presentation.

Speaker #2: We also have local supply chains. We've got very little in the way of dollar-based costs. The only thing we buy in dollars are software licenses.

Speaker #2: And they're very small. I think we've got high GDP growth, high population growth, high levels of urbanization, and less competition than South Africa.

Geoff Whyte: I think we have got high GDP growth, high population growth, and we have high levels of urbanization and less competition than South Africa. So it is a big market opportunity, and we have made a number of moves to mitigate risk. But we still see that as an attractive area to pursue going forward.

Speaker #2: So, it's a big market opportunity, and we've made a number of moves to mitigate risk. But we still see that as an attractive area to pursue going forward.

Speaker #2: Again, I don't know if you want to—yeah. I just want to add on to that. Yeah, that Africa portfolio is delivering, in rand terms, about R200 million to R230 million pre-tax. After tax, you're looking at, say, R160 million to R180 million.

[Analyst]: Again, I do not know if you want to.

[Analyst 2]: Again, I do not know if you want to.

[Analyst]: The margin on most fronts.

[Analyst 2]: The margin on most fronts.

Hannes Boonzaaier: Yeah. Maybe just want to add on to that. That Africa portfolio is delivering in ZAR terms about R200 to R230 million pre-tax. After tax, you are looking, say R150, sorry, R160 to R180. If you recall last year, the Runda transaction was R170 million. So again, you know what, the cash generated out of the Africa portfolio is equivalent to buy us a school per year. The demand is, of course, far in excess of it, and probably the deals are not always as favorable as the Runda transaction that we have had. But yeah, we have looked at funding as well in country, but the interest rates in some of these countries are sometimes three times the South African rate. So if required, we can still fund from South Africa.

Speaker #2: If you recall, last year the Runda transaction was R170 million. So again, you know what? The cash generated out of the Africa portfolio is equivalent to buying us a school per year.

Speaker #2: The demand is, of course, far in excess of it. And probably the deals are not always as favorable as the Runda transaction that we've had.

Speaker #2: But yeah, we've looked at funding as well in-country, but the interest rates in some of these countries are sometimes three times the South African rate.

Speaker #2: So, if required, we can still fund from South Africa. Our cash flow preservation policy is that we don't utilize the African cash generated in any dividend policy, because we still see significant growth in that portfolio.

Hannes Boonzaaier: Our cash flow preservation policy is that we do not utilize the African cash generated in any dividend policy because we are still seeing significant growth in that portfolio. Yeah.

Speaker #2: Yeah.

Speaker #1: And remittances from the African countries?

[Analyst]: Remittances from the African countries?

[Analyst 2]: Remittances from the African countries?

Speaker #2: Not a problem in Botswana. Neither in Kenya. Ethiopia is a little bit challenging, but possible. And we've tried it on a small scale—again, looking at the campus that we had to relocate and the IT investments we're putting in, we've been utilizing cash in-country in Ethiopia.

Hannes Boonzaaier: Not a problem in Botswana, neither in Kenya. Ethiopia is a little bit challenging, but possible, and we have tried it on a small scale. At this stage, again, looking at the campus that we had to relocate and the IT investments we are putting in, we have been utilizing the cash in-country in Ethiopia. That will be the most challenging one, but no problem in Botswana and Kenya.

Speaker #2: That will be the most challenging one, but there’s no problem in Botswana and Kenya.

Speaker #3: And I think, Frank, the last question you talked about qualifications and PhDs—and I think that was also your question. We are, particularly in Emirates but also in Rosebank, looking at postgrad qualifications and developing master's and PhD programs over time.

Geoff Whyte: Frank, the last question, you talked about qualifications and PhDs. I think that was also your question. We are, particularly in Emeris, but also in Rosebank, looking at post-grad qualifications and developing master's and PhD programs over time. Okay. Other questions?

Speaker #3: Okay. Other questions?

Speaker #4: Good morning. Thank you very much for your time, and congratulations on the solid performance. So Mr. Geoff, you did answer a part of my question.

[Analyst]: Good morning. Thank you very much for your time, and congratulations on the solid performance. Mr. Geoff, you did answer a part of my question. It is in relation to the resourcing division. I just wanted to find out if you guys are seeing any new client wins or contract pipelines that could offset the USAID-related losses. My second question is in relation to the Emeris Sandton campus. I saw that you guys are looking into adding student accommodation there. My question is, do you have land or space for that on your existing site, or would you have to acquire additional property? On that, when we last spoke to Mr. Hannes, we were all frantic about the parking situation, and he assured us that this was beginning of year issues that would fizzle out, and I believe that is what has happened.

[Analyst] (Mazi): Good morning. Thank you very much for your time, and congratulations on the solid performance. Mr. Geoff, you did answer a part of my question. It is in relation to the resourcing division. I just wanted to find out if you guys are seeing any new client wins or contract pipelines that could offset the USAID-related losses. My second question is in relation to the Emeris Sandton campus. I saw that you guys are looking into adding student accommodation there. My question is, do you have land or space for that on your existing site, or would you have to acquire additional property? On that, when we last spoke to Mr. Hannes, we were all frantic about the parking situation, and he assured us that this was beginning of year issues that would fizzle out, and I believe that is what has happened.

Speaker #4: So, it's in relation to the resourcing division. I just wanted to find out if you guys are seeing any new client wins or contract pipelines that could offset the USAID-related losses.

Speaker #4: And then my second question is in relation to the Emirates Sandton campus. I saw that you are looking into adding student accommodation there.

Speaker #4: So my question is, do you have land or space for that on your existing site, or would you have to acquire additional property? And then on that, when we last spoke to Mr. Hannes, we were all frantic about the parking situation.

Speaker #4: And he assured us that this was beginning-of-year issues that would fizzle out. And I believe that's what's happened. So, considering the existing students and staff base, has that parking capacity been affected in relation to adding student accommodation on that campus?

[Analyst]: Considering the existing students and staff base, has that parking capacity been factored, in relation to adding student accommodation on that campus? Thank you.

[Analyst] (Mazi): Considering the existing students and staff base, has that parking capacity been factored, in relation to adding student accommodation on that campus? Thank you.

Speaker #4: Thank you.

Speaker #2: Yeah, okay. So maybe taking the first of those questions. Are we picking up new contracts and resourcing? So the answer to that is we're continually cycling contracts.

Geoff Whyte: Yeah. Okay. So maybe taking the first of those questions. Are we picking up new contracts in resourcing? The answer to that is we are continually cycling contracts. When the businesses that we manage payrolls for become big enough, they would typically take that on and run it themselves. We are continually adding and cycling out of contracts. The contracts that we have picked up have generally been higher margin than the ones we have lost. That is why the margin has improved. We have pivoted strategically away from US-funded NGOs and charities after the USAID decision. We have picked up some contracts and are looking to grow those and also pick up more. That is actually quite a dynamic business. On the student accommodation question at Emirates, we will not actually be building that ourselves. We will work with third parties, and it will not directly be on our campus.

Speaker #2: When the businesses that we work for become big enough, they would typically take that on and run it themselves. So we are continually adding and cycling out of contracts.

Speaker #2: The contracts that we've picked up have generally been higher margin than the ones we've lost; that is why the margin has improved. We have pivoted strategically away from US-funded NGOs and charities after the USAID decision.

Speaker #2: And we have picked up some contracts, and we're looking to grow those and also pick up more. So that is actually quite a dynamic business.

Geoff Whyte: We have picked up some contracts and are looking to grow those and also pick up more. That is actually quite a dynamic business. On the student accommodation question at Emirates, we will not actually be building that ourselves. We will work with third parties, and it will not directly be on our campus.

Speaker #2: On the student accommodation question at Emirates, we won't actually be building that ourselves. We'll work with third parties, and it won't be directly on our campus.

Speaker #2: It will be adjacent to our campus, but that's quite exciting. It effectively stretches the catchment area beyond people who are doing a daily commute.

Geoff Whyte: It will be adjacent to our campus. That is quite exciting. It effectively stretches the catchment area beyond people who are doing a daily commute. It should help drive student numbers. On parking, I think the reality is, things do settle down after the beginning of term, the beginning of an academic year in a new location. We have also taken action to add additional parking and to limit first years parking on site. As I mentioned in the presentation, we have added 200 spaces or will add 200 spaces by the end of this year. We currently have 650 on-site spaces. We have already got quite a big capacity. We will add a sizable amount. I think that is about a 33% increase. That should set us up, to ease the situation in the short term and also prepare us for growth into the future. Okay. Thank you.

Speaker #2: So it should help drive student numbers. And then, on parking—I mean, I think the reality is things do settle down after the beginning of term, the beginning of an academic year, in a new location.

Speaker #2: We've also taken action to add additional parking and to limit first-years parking on site. As I mentioned in the presentation, we've added 200 spaces, or will add 200 spaces, by the end of this year.

Speaker #2: We currently have 650 on-site spaces, so we've already got quite a big capacity. We'll add a sizable amount—I think that's about a 33% increase.

Speaker #2: So that should set us up to ease the situation in the short term and also prepare us for growth into the future. Okay, thank you.

Speaker #4: Well done on your results. Yeah, you answered my parking question. But I have two following questions. One of the slides that stood out to me was when you were speaking about the capacities in—I believe it was the schools or the education facilities.

[Analyst]: Well done for your results. You answered my parking question, but I have two following questions. One of the slides that stood out to me when you were speaking about the capacities in the, I believe it was the schools or the education facilities. It seemed to me that the Africa campuses are at higher capacity than the South African ones, which to me seems like a mismatch because it seems to me that South Africa, particularly the schools division, is stagnating in student growth, and Africa is supposed to be your growth engine. How do you deal with that mismatch?

[Analyst 3]: Well done for your results. You answered my parking question, but I have two following questions. One of the slides that stood out to me when you were speaking about the capacities in the, I believe it was the schools or the education facilities. It seemed to me that the Africa campuses are at higher capacity than the South African ones, which to me seems like a mismatch because it seems to me that South Africa, particularly the schools division, is stagnating in student growth, and Africa is supposed to be your growth engine. How do you deal with that mismatch?

Speaker #4: And it seemed to me that the Africa campuses are at higher capacity than the South African ones, which to me seems like a mismatch because it seems to me that South Africa, particularly the school division, is sort of stagnating in student growth.

Speaker #4: And Africa is supposed to be your growth engine. So, how do you deal with that mix—that mismatch?

Speaker #2: Yeah, I'm not really sure that is a mismatch. I think those schools are full because of market demand and because of the growth that we've had historically.

Geoff Whyte: Yeah. I am not really sure that is a mismatch. I think those schools are full because of market demand and because of the growth that we have had historically. So utilization is a function of demand and success. I think we have got, for the reasons that I just laid out, a more dynamic market opportunity in Africa. Less competition, high GDP growth, greater levels of population growth, urbanization. So I think we have got strong brands, huge market demand, and that has led to full schools. Our focus there, as I said in the presentation, is to create extra capacity to accommodate that demand. But I think it does actually make logical sense if you think about it.

Speaker #2: So, utilization is a function of demand and success. And I think we've got, for the reasons that I just laid out, a more dynamic market opportunity in Africa—less competition, higher GDP growth, greater levels of population growth, and urbanization.

Speaker #2: So I think we've got strong brands and huge market demand, and that's led to full schools. Our focus there, as I said in the presentation, is to create extra capacity to accommodate that demand.

Speaker #2: But I think it does actually make logical sense, if you think about it.

Speaker #4: And in terms of pulling up the South African schools, because I know it's a tough economy here—GDP is not really growing.

[Analyst]: In terms of filling up the South African schools, because I know it is a tough economy here. GDP is really growing.

[Analyst 3]: In terms of filling up the South African schools, because I know it is a tough economy here. GDP is really growing.

Speaker #2: We've had continual enrollment growth in South Africa. It was slightly muted in this last round, but we still grew. And I think in certain areas, we still have demand outstripping supply.

Geoff Whyte: We have had continual enrollment growth in South Africa. It was slightly muted in this last round.

Geoff Whyte: We have had continual enrollment growth in South Africa. It was slightly muted in this last round. But we still grew. I think in certain areas, we still have a demand outstripping supply. So some of the developments that I spoke about, in individual schools are about increasing capacity. If you look at the estate in total, we do have some room to grow. But that is not necessarily a bad position. You cannot actually run high schools at 100% anyway.

Geoff Whyte: But we still grew. I think in certain areas, we still have a demand outstripping supply. So some of the developments that I spoke about, in individual schools are about increasing capacity. If you look at the estate in total, we do have some room to grow. But that is not necessarily a bad position. You cannot actually run high schools at 100% anyway.

Speaker #2: So, some of the developments that I spoke about in individual schools are about increasing capacity. If you look at the estate in total, we do have some room to grow.

Speaker #2: So, room to grow, sorry. But that's not necessarily a bad position, and you can't actually run high schools at 100% anyway. I think, no.

[Analyst]: You cannot.

[Analyst 3]: You cannot.

Speaker #2: When you're running multiple subjects, that creates an inefficiency. In our primary school, where you've got a dedicated class and a dedicated teacher, then you could get to 100, or very close.

Geoff Whyte: No. When you are running multiple subjects, that creates an efficiency.

Geoff Whyte: No. When you are running multiple subjects, that creates an efficiency. In a primary school where you have got a dedicated class and a dedicated teacher, then you could get to 100 or very close. In a high school, you are never going to get to 100. So 84 is a pretty good number. 93 is actually slightly uncomfortable in Africa.

Geoff Whyte: In a primary school where you have got a dedicated class and a dedicated teacher,

Geoff Whyte: then you could get to 100 or very close. In a high school, you are never going to get to 100. So 84 is a pretty good number. 93 is actually slightly uncomfortable in Africa.

Speaker #2: In a high school, you're never going to get to 100, so 84 is a pretty good number. Ninety-three is actually slightly uncomfortable in Africa.

[Analyst]: Mm-hmm. Okay.

[Analyst 3]: Mm-hmm. Okay.

Speaker #4: Okay. And then maybe add I—

Hannes Boonzaaier: I want to maybe add. I think we had a lot of questions earlier on not opening up a big school for 2027, but we've looked at a lot of our sites, in the various brands building on, as we've shown also on the pictures, and there is quite a lot of capacity that's being added on for January in some of those areas where there's high demand or full schools that we've been able to effectively actually indirectly build a new school on current existing sites.

Speaker #3: I think when you add a lot of questions earlier on—not opening up a big school for 2027—but we've looked at a lot of our sites in the various brands, building on, as we've shown also on the pictures.

Speaker #3: And there is quite a lot of capacity that's being added on for January. In some of those areas where there's high demand or full schools, we've been able to effectively, actually, indirectly build a new school on current existing sites.

Speaker #4: All right, thanks for answering that question. And then, in terms of the Emirates campus—I mean, as a brand—you said it's similar to where your private school students go. I'm assuming your Crawfords, those kinds of schools.

[Analyst] (Mazi): All right. Thanks for answering that question. Then in terms of the Emeris campus, I mean, the brand, you said it's similar to where your private school students go. I'm assuming your Crawfords, those kind of schools, they want to send them in through to Emeris. I know you do have a campus in Grayston, but to me it seems like these kind of students, they want to go to Stellies, they want to go to UCT, to have that kind of experience. Would it not make sense then to build in these sort of areas, so they can live their upper-class student lives, if you want to call it that?

[Analyst 3]: All right. Thanks for answering that question. Then in terms of the Emeris campus, I mean, the brand, you said it's similar to where your private school students go. I'm assuming your Crawfords, those kind of schools, they want to send them in through to Emeris. I know you do have a campus in Grayston, but to me it seems like these kind of students, they want to go to Stellies, they want to go to UCT, to have that kind of experience. Would it not make sense then to build in these sort of areas, so they can live their upper-class student lives, if you want to call it that?

Speaker #4: They want to send them in through to Emirates. I know you do have a campus in Grayston, but to me it seems like these kinds of students want to go to Stellies.

Speaker #4: They want to go to UCT. They have that kind of experience. Would it not make sense, then, to build in these sort of areas so they can live their upper-class student lives, if you want to call it that?

Speaker #2: Well, as I showed on the slide, we've got campuses all the way across the country, so we're quite well represented. We are adding sports facilities and recreational facilities to address that imbalance.

Geoff Whyte: Well, as I showed on the slide, we've got campuses all the way across the country, so we're quite well represented. We are adding sports facilities, recreational facilities to address that imbalance.

Speaker #2: And I'd maybe just pull you back to that stat that I shared, where first-year students this last year—two-thirds of them had Emirates as their first choice.

Geoff Whyte: I'd maybe just pull you back to that stat that I shared, where for first-year students this last year, two-thirds of them had Emeris as their first choice. They would've had all of the state options to choose from.

Speaker #2: And they would have had all of the state options to choose from.

Speaker #4: Okay. All right. Thank you.

[Analyst]: Okay. All right. Thank you.

[Analyst 3]: Okay. All right. Thank you.

Speaker #2: Okay. Yeah.

Geoff Whyte: Okay.

Geoff Whyte: Yeah.

Speaker #4: Good morning again. So, my second question—by the way, my name is Noel from Mazi. A lot of your growth in that tertiary division, and I stand to be corrected, comes from the Rosebank International brand, right?

[Analyst] (Mazi): Good morning again. My name is Nell from Mazi. My second question, a lot of your growth in that tertiary division, and I stand to be corrected, comes from the Rosebank International brand, right? Which earns lower revenue per student, I believe. How should we think of that medium-term margin trajectory as the mix shift continues?

Speaker #4: Which earns lower revenue per student, I believe. So how should we think of that medium-term margin trajectory as the mix shift continues?

Speaker #2: Yeah. Well, as you point out, the revenue per student is lower. The percentage margins are actually pretty similar, so it really has a revenue impact more than a margin impact.

Geoff Whyte: Well, as you point out, the revenue per student is lower. The percentage margins are actually pretty similar. It really has a revenue impact more than a margin impact, that disproportionate growth in Rosebank and distance. So building a revenue impact, not so much the percentage margin.

Speaker #2: That disproportionate growth in Rosebank in distance, so building a revenue impact, not so much the percentage margin.

Speaker #3: Yeah, I think I just want to add on to that by saying, yeah, I think you've been seeing that our tertiary margin has been growing for the past three years significantly, even with that mix impact.

Hannes Boonzaaier: I just want to add on to say, I think we have been seeing that our tertiary margin has been growing for the past three years significantly, even with that mix impact. Our guidance has been that it has been between 3% and 5% in terms of the mix on the revenue. I think we can now actually start bringing it down to 3% to 4%. In these actual results, you have seen a 19% enrollment, 17% revenue. So we are getting closer to actually the enrollment number on the revenue mix. On the margin side, again, the model is based on high volume. You actually get the margin. That is where it works.

Speaker #3: Our guidance has been that it's been between 3% and 5% in terms of the mix on the revenue. I think we can now actually start bringing it down to 3% to 4%.

Speaker #3: And in these actual results, you've seen it: 19% enrollment, 17% revenue. So yeah, we're getting closer to the actual enrollment number on the revenue mix.

Speaker #3: But on the margin side, again, the model is based on high volume. You actually get the margin, and that's where it works.

Speaker #2: And the balance over time, as we accelerate growth in Emirates and Vega, is having less of a mix impact on revenue. And as Hannes was saying, our guidance last year and this year is reducing.

Geoff Whyte: The balance over time as we accelerate growth in Emeris and Vega, is having less of a mix impact on revenue. As Hannes was saying, our guidance last year and this year is reducing.

[Analyst]: You have a limit on class size?

[Analyst 1]: You have a limit on class size?

Speaker #2: In schools, yes, we do. We do. We keep that to low numbers across all of our SA schools. The numbers are slightly higher in Africa, where the model is more about scale.

Geoff Whyte: In schools, yes, we do. We keep that to low numbers across all of our SA schools. The numbers are slightly higher in Africa, where the model is more about scale. Yes, we are 25, 26 in South Africa and up to about 34 in the African schools.

Speaker #2: But yes, we're 25, 26 in South Africa, and up to about 34 in the African schools.

Speaker #3: Thank you. There are quite a few online questions. I'll just go through them one by one. The common theme across all is congratulations on the good results.

[Company Representative] (Advtech): Thank you. There are quite a few online questions. I will just go through them one by one. A common theme across all have said congratulations on the good results. First question is, the SA schools' revenue growth was mostly driven, not by student growth, but by other factors, probably mix and pricing. They want to know what is the average fee increase in SA schools, and how are you balancing that with affordability?

Speaker #3: The first question is about the SA schools' revenue growth. It was mostly driven not by student growth, but by other factors—probably mix and pricing. They want to know what the average fee increase is in SA schools, and how you're balancing that with affordability.

Speaker #2: Do you want to take that one?

Geoff Whyte: Do you want to take that one?

Hannes Boonzaaier: Yeah, sure. Our average fee increase, various brands had different increases, and again, dependent on which grade, was between 5.5% and 6%. Then if you add the 1.4% enrollments on that, you are getting close to 7%, 7.5%. Then that mix impact is just as we have given guidance, that the high school student proportion is much bigger than your primary, pre-primary at a higher fee. That mix impact gives you that extra 1%, 1.5% up to 8% revenue increase.

Speaker #3: Yeah. Sure. Yeah. Our average fee increase various brands had different increases. And again, dependent on which grade. Was between 5 and a half and 6%.

Speaker #3: Then, if you add the 1.4% enrollments on that, you're getting close to 7, 7.5%. And then that mix impact is just as we've given guidance, that the high school student proportion is much bigger than your primary, pre-primary, at a higher fee.

Speaker #3: And that mix impact gives you that extra 1 to 1.5 percent, up to an 8% revenue increase.

Speaker #2: Yeah, and I mean, I think strategically we are trying to limit fee increases to the lowest possible level, to drive both affordability and value for parents.

Geoff Whyte: Yeah. I think strategically, we are trying to limit fee increases to the lowest possible level to drive both affordability and value for parents. That in turn should drive enrollment growth, and that is where really we want to see the commercials benefiting. So we are not trying to push pricing. We are trying to make pricing as affordable as possible, and then see the benefit of that coming through in enrollments.

Speaker #2: And that, in turn, should drive enrollment growth. And that's where we really want to see the commercials benefiting. So we're not trying to push pricing.

Speaker #2: We're trying to make pricing as affordable as possible, and then see the benefit of that coming through in enrollments.

Speaker #3: And capacity utilization.

[Analyst]: Capacity utilization.

[Analyst 2]: Capacity utilization.

Speaker #2: Yeah. Frank, you should come back.

Geoff Whyte: Yeah. Frank, you should come back.

Speaker #3: I love hearing what you do.

[Analyst]: I love hearing what you do.

[Analyst 2]: I love hearing what you do.

Speaker #2: Yeah. Maybe one more question online. How many have we got there? Okay. Let's cover those, and then we can close.

Geoff Whyte: Yeah. Maybe one more question online. How many have we got there?

[Company Representative] (Advtech): We've got about six.

Geoff Whyte: Okay. Let's cover those and then we can close.

Speaker #3: Okay. Can you give a sense of the property mix between owned and leased, and how do you strategically see the owning versus leasing decision as you accelerate capacity?

[Company Representative] (Advtech): Okay. Can you give a sense of the property mix between owned and leased, and how do you strategically see the owning versus leasing decision as you accelerate capacity?

Speaker #2: Yeah, I mean, I think in schools we like to have certainty of tenure with specialist buildings, so our preference is to own. So, most of the schools we would actually own directly.

Geoff Whyte: Yeah. I think in schools we like to have certainty of tenure with specialist buildings. So our preference is to own. So most of the schools we would actually own directly. We prefer leasing in the main because of the flexibility around growth in tertiary. We have a very sizable property portfolio as a result of that. I do not know if you want to comment on that one, Hannes?

Speaker #2: We prefer leasing in the main because of the flexibility around growth in tertiary. We have a very sizable property portfolio as a result of that.

Speaker #2: But I don't know if you want to comment on that one, Hannes.

Speaker #3: Yeah, it's kind of the flip side of each other on schools. It's about 75-25 owned versus leased, and in tertiary it's exactly the opposite.

Hannes Boonzaaier: Yeah. It is kind of a flip side of each other. On schools, it is about a 75/25 owned versus leased, and in tertiary, it is exactly the opposite. Based on our historical model, whereby we went into smaller, can I say, nimble campuses that we leased. As you have seen on some of the real estate changes, a lot of our views are changing on that, whereby we now actually look at mega campuses and rather own those campuses. So the tertiary landscape is changing because of the extramural facilities that we are creating and our long-term view on a certain location. But yeah, if you look at just a total count, it is a 75/25 mirror split of tertiary versus schools.

Speaker #3: Based on our historical model, whereby we went into smaller, and I say nimble, campuses that we leased—as you've seen on some of the real estate changes—a lot of our views are changing on that.

Speaker #3: Whereby we now actually look at mega campuses and rather own those campuses. So the tertiary landscape is changing because of the extramural facilities that we're creating and our long-term view on a certain location.

Speaker #3: But yeah, if you look at just the total count, it's a 75-25 mirror split of tertiary versus schools.

Speaker #1: This question is on capacity. I just want to clarify: the Rosebank-Bramfontein—you mentioned that that building is almost already full. Does that mean that the increase from 11,500 to 15,000 has already been absorbed?

[Company Representative] (Advtech): This question is on capacity. Just want to clarify the Rosebank, Braamfontein. You mentioned that that building is almost already full. Does that mean that the increase to 15,000 from 11,500 has already been absorbed? The second part is on Emirates KZN. What would be the incremental increase in capacity once on the new site compared to current capacity?

Speaker #1: And the second part is on Emirates KZN. What would be the incremental increase in capacity once on the new site compared to...

Speaker #2: Yeah. Well, taking the first one—we, through the Braamfontein expansion, have increased capacity from 11,500 to 15,000. The new buildings that we bought will give us extra capacity of 4,000 immediately, with an ultimate increase of around 9,000 from those buildings.

Geoff Whyte: Well, taking the first one, we through the Braamfontein expansion, have increased capacity from 11,500 to 15,000. The new buildings that we bought will give us extra capacity of 4,000 immediately, with an ultimate increase of around 9,000 from those buildings. We are not out of capacity at Rosebank, Braamfontein this year, but with next year's intake, we are going to be very, very tight on space. So we are planning ahead of the curve, but only slightly ahead of the curve. Emirates capacity, if you look at our regional consolidation of our existing sites, it is round about a doubling of existing capacity, that new Cornubia site near Umhlanga.

Speaker #2: We're not out of capacity at Rosebank-Braamfontein this year, but with next year's intake, we're going to be very, very tight on space. So we're planning ahead of the curve, but only slightly ahead of the curve.

Speaker #2: And Emirates capacity, if you look at our regional consolidation of our existing sites, it's around about a doubling of existing capacity. That new Cornubia site near Umhlanga.

Speaker #1: The question is on Schools Africa. How much of the revenue growth is organic, and what was the currency impact on revenue?

[Company Representative] (Advtech): Question is on Schools Africa. How much of the revenue growth is organic, and what was the currency impact on revenue?

Speaker #2: Okay, I think I've covered the currency impact, which is quite sizable. But Hannes, you look like you're keen to handle that one.

Geoff Whyte: Okay. Well, I think I have covered the currency impact, which is quite sizable. Hannes, you look like you look keen to handle that one.

Speaker #3: No, no, no. No problem. Yeah. I think the only addition that we've had in the '26 period now versus '26 last year, taking into account that Flipper was included from 1 January 2025 already.

Hannes Boonzaaier: No. No problem. I think the only addition that we've had in the 2026 period now versus 2026 last year, taking into account that Flipper International School was included from 1 January 2025 already. So the only additional, can I say, acquired capacity in these numbers are the Runda campus, which at high level, I'd say on the total number is less than 10% of the operating profit, and Geoff also indicated the 24% growth that we've had there. So all growth basically in the SA schools, actually the Africa schools, have been organic. Just to mention, we didn't get to those rates, but some of these, can I say, Forex rate differentials from Q1 2025 to Q1 2026 range between 14% and 30%. So if we didn't have those rate differentials, Africa revenue and profit would've been between 20% and 30%. So they were quite significant.

Speaker #3: So the only additional, can I say, acquired capacity in these numbers is the Runda campus, which at a high level, I'd say, on the total numbers, is less than 10% of the operating profit.

Speaker #3: And yet, Geoff also indicated the 24% growth that we've had there. So all growth, basically, is in the SA schools. I think the Africa schools have been organic.

Speaker #3: Yeah, just to mention—and we didn't get to those rates—but some of these, can I say Forex rate differentials from Q1 2025 to Q1 2026, range between 14% and 30%.

Speaker #3: So, if we didn't have those rate differentials, Africa revenue and profit would have been between 20% and 30%. So, they were quite significant. We did experience them in the latter part of 2025.

Hannes Boonzaaier: We did experience them in the latter part of 2025, and I can at least say that from December till now, we are only seeing a 4% differential. So it's been a slow drip on the rand strength against the African currencies.

Speaker #3: And I can at least say that from December till now, we're only seeing a 4% differential. So, it's been a slow drip on the rand strength against the African currencies.

Speaker #2: I feel like some water. Okay. What else do we have?

Geoff Whyte: I'd like some water. Okay. What else do we have?

Speaker #1: A question on when do you see RIUC in Ghana breaking even?

[Company Representative] (Advtech): A question on when do you see Rosebank International University College in Ghana breaking even?

Speaker #2: Do you want to cover that one, Hannes?

Geoff Whyte: Do you want to cover that one, Hannes?

Hannes Boonzaaier: Yep, sure. I think all our models on definitely tertiary is when you have a full 3-year degree university running. Our model is indicating that. We are just in year 1 with 250, 300 students, so we need to be in year 3, then actually the university will break even in Ghana.

Speaker #3: Yeah, sure. I think all our models are definitely tertiary. It's when you have a full three-year degree university running, so our model is indicating that.

Speaker #3: We're just in year one, with 250 to 300 students. So, we need to be in year three; then, actually, the university will break even in Ghana.

Speaker #1: Okay, I think there's just two more questions. Do you want to comment on the reasons for the loss allowance coverage being reduced?

[Company Representative] (Advtech): Okay. I think there are just two more questions. Do you want to comment on the reasons for the loss allowance coverage being reduced?

Speaker #3: Yeah, I don't think it's reduced. I think it's an effect of looking at our detailed data's performance. We're very confident that if we're growing data at a far lesser percentage than revenue, we are actually putting a lot of processes in place with regards to data control.

Hannes Boonzaaier: I don't think it is reduced. I think it is an effect of looking at our detailed debtors' performance. We are very confident that if we are growing debtors at a far lesser percentage than revenue, we are actually putting a lot of processes in place with regards to debtors' control. I think our communication is better, our customer service in assisting our parents to pay, and our prompt follow-up is much better than in prior years. That has driven a lot of the debtors' performance. So it is an impact of the actual debtor amounts that we have outstanding.

Speaker #3: I think our communication is better. Our customer service in assisting our parents to pay, and our prompt follow-up, is much better than in prior years.

Speaker #3: And that has driven a lot of the data's performance. So, it is an impact of the actual data amounts that we have outstanding.

Speaker #1: This should be the last question. What are the incremental ROICs that can be expected, taking into account all the capex that's planned, in a worst case, base case, and best case scenario?

[Company Representative] (Advtech): This should be the last question. What are the incremental ROIC that can be expected, taking into account all the CapEx that is planned in a worst case, base case, and best case scenario?

Speaker #3: I'm not sure whether I can give forward-looking information like that. I think what I've disclosed in our integrated report is that we are aiming to have our ROIC numbers at at least WACC plus 6%, which is probably about 17% or 18%.

Hannes Boonzaaier: Not sure that I can give forward-looking information like that. I think I have disclosed in our integrated report is that we are aiming to have our ROIC numbers at at least WACC +6%, which is probably around the 17%, 18%. Most of our projects that we do invest in is currently generating far in excess of those rates, especially tertiary, whereby deployment of capital and profits, the timing between that is much quicker than in schools. So I do think with the bigger growth in tertiary, a lot of our projects are far exceeding that target. So I am quite positive that in the next few years, ROIC will definitely be increasing at similar, if not bigger trends.

Speaker #3: Most of our projects that we do invest in are currently generating far in excess of those rates, especially tertiary, whereby deployment of capital and profits—the timing between that is much quicker than in schools.

Speaker #3: So I do think with the bigger growth in Tertiary, a lot of our projects are far exceeding that target. So, quite positive that in the next few years, ROIC will definitely be increasing at similar, if not bigger, trends.

Speaker #1: Okay, I clicked one last refresh, and there are no further questions. So, thank you.

[Company Representative] (Advtech): Okay. I clicked one last refresh and no further questions, so thank you.

Speaker #2: Great. Thank you. Okay, I think we'll wrap it up there. Thanks to everyone for attending. Please join us for some drinks and snacks outside.

Geoff Whyte: Great. Thank you. Okay, I think we will wrap it up there. Thanks to everyone for attending. Please join us for some drinks and snacks outside, and do not forget to collect that Capsicum chefs gift pack before you leave. Thanks very much. Okay, Matthias. All done.

Speaker #2: And don't forget to collect that Capsicum Chef's gift pack before you leave. But thanks very much.

Speaker #4: Okay.

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Q2 2026 Advtech Ltd Earnings Call

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