The private education sector on the JSE shrank by a third when Curro Holdings delisted in January 2026 and became a not-for-profit business backed by the Mouton family of PSG fame.
The two remaining counters, schooling and tertiary stock Advtech and tertiary business Stadio Holdings, both had a sparkling period of earnings and investor returns. This ignores Trematon, an investment company that owns a comparatively small private schools business in the form of Generations.
IM has consistently recommended the education sector, and this analyst has favoured Advtech over Stadio year to date as its p:e of 18 shouted value relative to Stadio’s p:e of 31.
IM is cognisant that the higher growth from Stadio’s asset-light, mostly online business demands a higher earnings multiple. However, the differential seemed excessive, and year to date the Advtech share price is up 18% vs a 10% dip at Stadio. Both stocks delivered solid results for the year to end-December, with Advtech’s headline earnings per share rising 17% to 235.8c and Stadio up 23% to 38.5c.
In the recent Advtech results, revenue rose 10% to R9.3bn, with continuing upward creep in operating margin leading to profits rising 14% to more than R2bn. Total enrolment rose 13% to 119,197 students, driven by strong growth of 19% in the tertiary subsidiary to 71,467 students.
Schooling enrolment grew 5% to 47,730 pupils. In South Africa growth was a modest 1% vs 14% for rest-of-Africa, where consolidation of an acquisition in Ethiopia helped to boost numbers.
Advtech, which consolidated Varsity College, Vega School and MSA under the Emeris brand, is pushing strongly for university status recognition
Rest-of-Africa schools now comprise 21.2% of group schooling profits, against 18.5% in 2024. IM predicts this segment will be the main profit hub in Advtech schooling until the company begins expanding capacity in South Africa, which is becoming constrained. This will boost local schooling growth, but in the near term IM expects profitability in this segment to be more muted.
Advtech highlighted the tough consumer environment that hampered enrolment at pre-primary and primary levels in South Africa, but noted good demand for its secondary schools. This, alongside tighter cost and debtor controls, led local schooling profit to rise 10% to R721m. Rest-of-Africa profit rose 33% to R194m.
The top result was from tertiary, which comprises 43.1% of group revenue but 50.5% of profits. Revenue rose 13% to R3.85bn and profits were up 14% to just over R1bn.
Advtech, which consolidated Varsity College, Vega School and MSA under the Emeris brand, is pushing strongly for university status recognition. It awaits long-delayed guidelines for accreditation from the department of higher education & training.
The only soft spot at Advtech was its resourcing division, which accounts for 16% of group revenue (R1.46bn) and 4.6% of profits (R93m).
Owing to weak demand in rest-of-Africa following the aid cut-off by the Trump administration, overall revenue slipped 6% and profits dropped 9%. The market has been unhappy for years about whether the resourcing business is a good fit for an education-focused company. Yet Advtech, for now, continues to support the asset.
Group capex is set to rise substantially, in phases from R1.2bn to R2.3bn, supported by Advtech’s robust balance sheet and cash-generative nature.
As examples, a new campus in Sandton will double capacity to 9,000 students. In KwaZulu-Natal, the group has pushed the button, after years of consideration, on a mega-campus in Umhlanga, with planned capacity of 10,500 students. Construction is set to begin in 2027, and phase 1 is due to open in 2029. Expansion of Advtech’s tertiary offering into rest-of-Africa is under way via Rosebank International in Ghana. There are plans to also offer its tertiary qualifications in Kenya, given the success of the schooling business there.
Despite the share price outperformance — it hit a record high in mid-April, though it has softened a tad since — IM continues to favour the stock on a valuation basis, while recognising that Stadio has greater growth vectors as a faster-growing company, given its base and principally online offering.
Advtech has gained star grades from the market and offers A+ returns. Its excellent capital allocation expectations enable consistent earnings growth into 2026 and 2027, assisted by targeted growth.
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