As a private school group is suspended from the JSE, this CIO says the ‘rapturous’ optimism about education is starting to fade
- The JSE has suspended trading in Pembury Lifestyle Group after the company missed two deadlines to publish its annual results.
- The CEO told Business Insider South Africa that a trading update will be released before mid-May.
- The group owns private schools and retirement villages.
- One chief investment officer says Pembury has been affected by waning enthusiasm about private education.
The private school and retirement village firm Pembury Lifestyle Group has been suspended from the JSE on Tuesday after failing to release its annual results in time.
The company said last month that it would be delaying the release due to a technical matter relating to one of its retirement village acquisitions.
It seems that these issues were related to the fair value of the acquisition, says Devin Shutte, head of investments at The Robert Group. As Pembury had already been granted a one-month extension by the JSE for missing its initial deadline after their financial year-end, the shares were suspended from trading. "The suspension is most regrettable for shareholders."
Its shares were listed at 100c on the JSE index in March last year. It has since lost more than two-thirds of its value, and was trading at 32c before the suspension.
“The rapturous sentiment surrounding the private sector education sector has subsided somewhat in 2018,” says Shutte. “Profit expectations, which hinge largely on economic growth, have been tempered, as the outlook remains better but still unclear,” he added. The private school group Curro has seen its share price fall more than 40% since 2015.
Apart from owning a number of retirement villages, Pembury has 19 schools in Gauteng and the North West, with 2‚300 pupils.
Andrew Mclachlan, CEO and founder of the group, told Business Insider South Africa it is on track to add three more campuses per year and is also looking at expanding its retirement village portfolio.
Before listing, Pembury reported revenue of almost R32m and a net loss of R5.4m for the 2016 financial year. It projected that revenue would grow to almost R136 million by the current financial year, and that it would break even in 2018/2019.
Mclachlan said a trading statement will be released before 15 May, "followed by the results announcement".
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