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STADIO HOLDINGS LIMITED - Audited Summary Results For The Year Ended 31 December 2018

Release Date: 04/03/2019 07:05
Code(s): SDO     PDF:  
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Audited Summary Results For The Year Ended
31 December 2018

Stadio Holdings Limited
Incorporated in the Republic of South Africa 
(Registration number: 2016/371398/06)
JSE Share Code: SDO
ISIN: ZAE000248662
(STADIO or the Group)

AUDITED SUMMARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018

FINANCIAL HIGHLIGHTS
FOR THE YEAR ENDED 31 DECEMBER 2018

STUDENT NUMBERS increased from  12 976 to 29 885
REVENUE increased from R122m to R633m
EBITDA increased from R0.5m to R129m
CORE HEADLINE EARNINGS increased from R3.2m to R70m
HEPS increased from (1.2 cps) to 7.8 cps
CHEPS increased from 0.6 cps to 8.6 cps

ACHIEVED INTERNATIONAL ACCREDITATION FOR MILPARK'S CONTACT AND ONLINE
MBA PROGRAMME FROM UK-BASED ASSOCIATION OF MBAs (AMBA)

OTHER STATISTICS

All information presented below represents the information of the underlying registered higher education institutions
(HEI) owned by the Group, split into the illustrative faculties to indicate the variety of programmes represented
by the HEIs within the Group.

STUDENT NUMBERS AND PROGRAMMES PER ILLUSTRATIVE FACULTY
(UNAUDITED)

                                                          Student
                                                          numbers                            Programmes
                                                                        Year-
                                                                      on-year         Current
                                               31 Dec     31 Dec       growth      registered      Pipeline
                                                2017*       2018         rate      programmes    programmes     Total  
Faculty
Commerce, Management and Law**                 23 761     25 105           6%              48            34        82   
Creative Economies                              2 727      2 878           6%              21             8        29   
Education and Humanities                        1 039      1 839          77%               8            10        18   
Agriculture and Environmental                                                                                           
Sciences                                            -          -            -               -             4         4   
Engineering and Information                                                                                             
Technology                                         57         63          11%               4             8        12   
                                               27 584     29 885           8%              81            64       145   
Contact and distance learning                                                                                           
Contact learning                                4 117      4 737          15%              47            39        86   
Distance learning                              23 467     25 148           7%              34            25        59   
                                               27 584     29 885           8%              81            64       145   
Made up of contact and distance learning                                                                 
% Contact students                                15%        16%                                                        
% Distance students                               85%        84%                                                        
                                                 100%       100%                                                        

*  Like-for-like comparison including student numbers for all underlying HEIs (including Milpark, LISOF, Prestige Academy)
** Includes the Graduate School of Business

COMMENTARY

OVERVIEW

STADIO is an investment holding company that focuses on the acquisition of, investment in and the growth and
development of HEIs with its purpose being to widen access to quality and relevant higher education programmes
in southern Africa. It is the Group's vision to be a leading Multiversity, offering qualifications aligned with the needs
of societies, students and the world of work. As a Multiversity, the Group currently owns six registered HEIs that are
aimed at providing programmes, both undergraduate and post graduate, that provide graduates with a real chance
of creating employment opportunities (entrepreneurship) or finding employment.

In time the Group will look to consolidate the programmes offered by its various HEIs under a single brand, STADIO
Multiversity, that will allow all stakeholders to benefit from the marketing, operational and regulatory advantages
of doing so.

The Group is currently focused on growing its existing registered higher education brands; pursuing potential
further acquisitions of relevant HEIs; exploring further expansion opportunities of existing brands; and overseeing
the development of new faculties, programmes and campuses across all brands.

REVIEW OF RESULTS 

The Board is pleased to report the Group's summary financial results for the year ended 31 December 2018.

At 31 December 2018, 29 885 students were registered at HEIs within the Group. This reflects an increase of 8% from
2017 (on a year-on-year basis). Students enrolled for contact learning programmes grew by 15% on a year-on-year
basis to 4 737, and students enrolled for distance learning programmes grew by 7% to 25 148.

During 2018, the Group acquired the following entities and businesses, the details of which are included in Note 4:

- Lisof Proprietary Limited (including the associated property companies Wadam Properties Proprietary Limited
  and Histodox Proprietary Limited) (collectively LISOF) with effect from 1 January 2018;
- MBS Education Investments Proprietary Limited, which owns 100% of Milpark Education Proprietary Limited
  (collectively Milpark) with effect from 19 March 2018;
- The business of CA Connect Professional Training Institution CPT Proprietary Limited (CA Connect), with
  effect from 12 April 2018; and
- Prestige Academy Proprietary Limited (Prestige Academy) with effect from 1 November 2018.

The growth in revenue, EBITDA and HEPS, from the prior reporting period is attributable to the successful execution
of the Group's organic and acquisitive growth plan.

The Group experienced good growth in its contact learnings students, driven largely by the expansion of the
Embury Musgrave campus as well as the opening of the two new Embury campuses in Montana (Pretoria) and
Waterfall (Midrand). The consolidation of the acquired brands, namely AFDA, Southern Business School (SBS), LISOF,
Milpark and Prestige Academy, all contributed significantly to the increase in student numbers from 12 976 students at
31 December 2017 to 29 885 students at 31 December 2018.

The Group reported HEPS of 7.8 cents per share and reflected a core headline earnings per share (CHEPS) of 8.6 cents
per share. CHEPS represents HEPS adjusted for certain items that, in the Board's view, may distort the financial results
from year-to-year, giving shareholders a more consistent reflection of the underlying financial performance of the
Group. These core adjustments include once-off acquisition related costs, amortisation costs associated with client
lists acquired (i.e. a non-cash charge arising as a result of the consolidation of the subsidiaries acquired) and interest on
deferred purchase considerations payable. Further details are contained in Note 8.

Bad debts (pre-recoveries) as a percentage of revenue increased from 1.5% to 3.2%. The increase is predominantly due
to the change in mix of bad debt margin as a result of new acquisitions. We continue to look at ways of improving collections and
facilitating funding mechanisms to assist students with their funding needs where appropriate.

During the year, the Group collectively invested R440 million towards acquisitions, further details of which, are contained
in Note 4 of the financial results.

The Group invested an additional R58 million on the capital expansion of facilities as well as new programme development,
both of which are imperative to assist in meeting the Group's growth objectives.

The Group's current cash balance of R260 million will be utilised to fund working capital requirements; facilitate new
developments (including campus expansions of existing brands); and for potential acquisitions. The Group currently has
an ungeared balance sheet and is in the process of finalising debt facility arrangements to assist in funding its known
capital expansion and growth objectives. As such the Group has no immediate plans to raise capital from shareholders.

The Group generated operating cash flows of R100 million (2017: R37 million utilised) for the 2018 financial year.
This represents 78% of EBITDA for the year. The aforementioned operating cash flows were largely impacted by working
capital outflows relating to the cash settlement of a portion of the deferred purchase consideration in respect of the
AFDA acquisition as well as to working capital timing differences arising from the acquisition of subsidiaries during the
2018 financial year. Deferred consideration of R24 million (2017: R89 million) is included within trade and other payables
as at 31 December 2018.

FUTURE CAPITAL EXPANSION INITIATIVES

GREENFIELD EXPANSION OPPORTUNITIES

The Group is considering the development, over time, of comprehensive large-scale campuses offering several faculties
including Commerce, Management and Law; Creative Economies; Education and Humanities; Agriculture and
Environmental Sciences; Engineering and Information Technology and a Graduate School of Business. STADIO
has identified that potential exists to construct these large scale-campuses in the Western Cape, Gauteng
and KwaZulu-Natal.

To this end the Group has already entered into an agreement, subject to various closing conditions, to acquire vacant
land located in Durbanville, Western Cape, and is also considering land acquisition opportunities in Gauteng. The timing
of constructing the first large-scale campus in the Western Cape or Gauteng, will depend on the identified land's
readiness to begin construction. It is the intention to complete the first large-scale comprehensive campus in Gauteng
or Western Cape by 2021.

GROWTH EXPANSION

As part of its organic expansion drive, in 2019 the Group will invest in the further development of the Montana campus
to increase capacity for both Embury and AFDA students. The expansion will provide AFDA with a geographic expansion
opportunity into Pretoria.

The Group is also pursuing increasing SBS's physical presence in Polokwane with a view to promote accessibility for students.

QUALIFICATIONS

The HEIs within the Group continue to focus on the development and accreditation of new programme offerings, as well
as expanding their accredited offering to new sites of delivery. This includes the development of an arts and humanities
programme focusing on creativity and innovation, engineering programmes, programmes in the architecture, spatial design
and the built environment, as well as programmes in agriculture - production, agri-tech, and agri-business. The programmes
will provide the Group with a diverse programme and qualification mix, catering to the different student needs.

The Group currently has 81 accredited qualifications and 64 qualifications actively in the process of development/accreditation.

OTHER

STADIO is actively pursuing acquisitions that will have a direct impact on the variety of programmes offered by the
Group and that support the Group's strategy to become a leading Multiversity.

The Group furthermore has concluded an agreement with Unit4 and SIS Global regarding the implementation of a
world-class information technology system to cater for the financial, operational and student needs of the Group.
The proposed information technology system will effectively position the Group to deliver a quality offering to its students
and will create the necessary capacity to facilitate the growth of students to achieve the Group's 100 000 student goal
over time. Implementation of the information technology system will commence in 2019.

ACADEMIC PERFORMANCE

In 2018, 6 392 students graduated from the Group's six underlying institutions, with an overall annual module success
rate of 77.7%. The continued emphasis on proactive and responsive student support is a significant contributor to the
improving pass rates and student success.

Whilst not a research-intensive environment, the Group's staff members produced 62 research outputs focusing on
both the development of new knowledge in selected discipline areas, as well as leading practices that will enhance the
teaching and learning imperative. The Group engages in almost 31 international partnerships and collaborations across
its six institutions, which include academic staff and student exchange programmes and research ventures.

Milpark's contact and online MBA programme achieved international accreditation from the UK-based Association
of MBAs (AMBA), being the only accredited online MBA in Africa, and the only African MBA with international
accreditation for both contact and distant learning.

DIVIDEND

No Group dividend was declared for the years ended 31 December 2018 and 2017.

PROSPECTS

The Board has considered the prospects of the Group and believes that the Group is well positioned to deliver on
its organic and acquisitive growth objectives as set out in its Pre-Listing Statement. The Group will continue to
seek out strategic acquisitions and will continue to develop and expand its product offering as part of its journey to
create a "Multiversity" of 100 000 students over time.

On behalf of the Board,
RH Stumpf                                                   CR van der Merwe
Chairperson                                                 Chief Executive Officer

1 March 2019

SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018

                                                                                            Audited           Audited
                                                                                        31 Dec 2018      31 Dec 2017*
                                                                                              R'000             R'000  
Revenue                                                                                     632 928           122 250   
Other income                                                                                  8 981             3 148   
Operating expenses                                                                        (513 097)         (124 929)   
Earnings before interest, taxation, depreciation and amortisation (EBITDA)                  128 812               469   
Depreciation and amortisation                                                              (33 995)          (10 069)   
Earnings/(loss) before interest and taxation (EBIT)                                          94 817           (9 600)   
Investment income                                                                            25 264            14 914
Finance cost                                                                                (6 719)           (7 630)   
Profit/(loss) before taxation                                                               113 362           (2 316)   
Taxation                                                                                   (36 071)           (2 788)   
Profit/(loss) for the year                                                                   77 291           (5 104)   
Profit attributable to:                                                                                                 
Owners of the parent                                                                         63 270           (7 037)   
Non-controlling interests                                                                    14 021             1 933   
Total comprehensive income/(loss) for the year                                               77 291           (5 104)   
Headline earnings/(loss) (Note 5)                                                            62 838           (7 038)   
Core headline earnings (Note 8)                                                              69 952             3 238 

                                                                                              Cents             Cents   
Earnings/(loss) per share (EPS)
- Basic                                                                                         7.8             (1.2)   
- Diluted                                                                                       7.7             (1.2)   
Headline earnings/(loss) per share (HEPS)                                                                               
- Basic                                                                                         7.8             (1.2)   
- Diluted                                                                                       7.7             (1.2)   
Core headline earnings per share (CHEPS)                                                                                
- Basic                                                                                         8.6               0.6   
- Diluted                                                                                       8.5               0.6   

                                                                                            Million           Million   
Number of shares in issue                                                                                               
- Basic                                                                                         818               786   
- Diluted                                                                                       826               792   
Weighted average number of shares in issue
- Basic                                                                                         811               576   
- Diluted                                                                                       819               582   

*Rental income relating to the Group's property companies has been reclassified from Revenue to Other income
 during the year. 

SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018

                                                                                               Audited        Audited
                                                                                           31 Dec 2018    31 Dec 2017
                                                                                                 R'000          R'000  
ASSETS
Non-current assets                                                                                                      
Property, plant and equipment                                                                  531 298        453 699   
Intangible assets                                                                              206 228        113 522   
Goodwill                                                                                       749 482        409 666   
Other financial assets                                                                           6 727          1 898   
Deferred tax asset                                                                              43 004         14 695   
Total non-current assets                                                                     1 536 739        993 480   
Current assets                                                                                                          
Inventories                                                                                      4 372          7 370   
Trade and other receivables                                                                     89 493         42 364   
Loans to related parties                                                                         1 954          2 500   
Tax receivable                                                                                  12 180          6 448   
Cash and cash equivalents                                                                      259 508        646 090   
Total current assets                                                                           367 507        704 772   
Total assets                                                                                 1 904 246      1 698 252   
EQUITY                                                                                                                  
Share capital (Note 3)                                                                       1 564 283      1 367 123   
Retained earnings                                                                               80 511         17 241   
Other reserves                                                                                   5 122            953
Total equity attributable to equity holders of the Company                                   1 649 916      1 385 317   
Non-controlling interests                                                                       47 186         29 354   
Total equity                                                                                 1 697 102      1 414 671   
LIABILITIES                                                                                                             
Non-current liabilities                                                                                                 
Borrowings                                                                                       3 392          3 570   
Finance lease liabilities                                                                          209              -   
Trade and other payables                                                                        29 732            719   
Deferred tax liability                                                                          35 776         20 116   
Total non-current liabilities                                                                   69 109         24 405   
Current liabilities                                                                                                     
Borrowings                                                                                         758            664
Finance lease liabilities                                                                          186              -   
Loans from related parties                                                                       1 137        119 042   
Trade and other payables*                                                                       46 241        113 401   
Income received in advance*                                                                     86 451         22 609   
Tax payable                                                                                      3 262          3 460   
Total current liabilities                                                                      138 035        259 176   
Total liabilities                                                                              207 144        283 581   
Total equity and liabilities                                                                 1 904 246      1 698 252   
Net asset value per share (cents)                                                                  202            176   

*Trade and other payables has been reclassified to disclose contract liabilities seperately in accordance with IFRS 15

SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018

                                                                                              Audited         Audited
                                                                                          31 Dec 2018     31 Dec 2017
                                                                                                R'000           R'000 
Balance at the beginning of the year                                                        1 414 671          84 257   
Total comprehensive income/(loss) for the year                                                 77 291         (5 104)   
Issue of ordinary shares                                                                      197 525       1 321 378   
Share issue costs                                                                               (365)        (15 066)   
Recognition of share-based payments expense                                                     4 169             953   
Dividends paid to non-controlling shareholders                                                (2 731)               -   
Non-controlling interest acquired                                                               6 542          28 253   
Balance at the end of the year                                                              1 697 102       1 414 671   

SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018

                                                                                             Audited          Audited
                                                                                         31 Dec 2018      31 Dec 2017
                                                                                               R'000            R'000
Net cash flow from/(used in) operating activities                                             77 257         (47 737)   
Cash generated from/(utilised by) operations (Note 6)                                        100 075         (37 233)   
Interest income                                                                               25 264           14 914   
Finance cost                                                                                 (3 733)          (7 630)   
Tax paid                                                                                    (44 349)         (17 788)   
Net cash flow used in investing activities                                                 (305 161)        (391 903)   
Purchase of property, plant and equipment                                                   (41 637)        (222 185)   
Purchase of intangible assets and curriculum development costs                              (15 870)         (11 403)   
Acquisition of subsidiaries, net of cash acquired (Note 4)                                 (243 750)        (158 548)   
Proceeds from sale of property, plant and equipment                                                -              233   
Proceeds from loans                                                                               96                -   
Investment in other financial assets                                                         (4 000)                -   
Net cash flow from financing activities                                                    (158 678)          938 459   
(Share issue costs)/net proceeds from shares issued                                            (365)          824 934   
Net (repayment)/proceeds from loans                                                        (155 626)          119 042   
Net proceeds/(repayment) of borrowings                                                            44             (32)   
Dividends paid to non-controlling shareholders                                               (2 731)                -   
Additional investment in subsidiary with no change of control                                      -          (5 485)   
Net movement in cash and cash equivalents for the year                                     (386 582)          498 819   
Cash and cash equivalents at the beginning of the year                                       646 090          147 271   
Cash and cash equivalents at the end of the year                                             259 508          646 090   

NOTES TO THE SUMMARY CONSOLIDATED FINANCIAL RESULTS

1.   BASIS OF PREPARATION AND ACCOUNTING POLICIES

     The summary consolidated financial results (financial results) are prepared in accordance with International
     Financial Reporting Standards, IFRIC Interpretations, the SAICA Financial Reporting Guides as issued
     by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the
     Financial Reporting Accountants Council, the JSE Limited Listings Requirements for provisional reports,
     the requirements of the Companies Act of South Africa and the presentation and disclosure requirements
     of IAS 34 Interim Financial Reporting.

     The accounting policies applied in the preparation of the annual financial statements from which these
     financial results were derived are in terms of International Financial Reporting Standards and, other than
     the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts from Customers, are
     consistent with those accounting policies applied in the preparation of the previous Consolidated Annual
     Financial Statements.

2.   PREPARATION

     The financial results have been prepared internally under the supervision of the Chief Financial Officer,
     S Totaram CA(SA), CFA, and approved by the Board of Directors on 1 March 2019.

     The financial results were audited by the Group's external auditor, PricewaterhouseCoopers Inc. who expressed
     an unmodified opinion thereon. Any reference to future financial performance included in this announcement,
     has not been audited or reported on by the Group's auditor.

     The auditor also expressed an unmodified opinion on the consolidated annual financial statements from
     which these financial results were derived.

     A copy of the Group's Consolidated Annual Financial Statements are available for inspection at the Company's 
     registered office, together with the financial statements identified in the respective auditor's reports.

     The auditor's report does not necessarily report on all the information contained in this announcement. Users
     are therefore advised that in order to get a full understanding of the nature of the auditor's engagement,
     they should obtain a copy of the auditor's report together with the accompanying financial information from
     the Company's registered office.

3.   SHARE CAPITAL

     During the year, the Company:

     - Issued 21 million shares collectively as part settlement of the purchase consideration for the LISOF,
       Milpark, CA Connect and Prestige Academy acquisitions; and
     - Issued 11 million shares as financial settlement of the outstanding purchase consideration for the
       AFDA acquisition.

4.   BUSINESS COMBINATIONS

     During 2018, the Group collectively invested R440 million for the acquisition of LISOF, Milpark, Prestige
     Academy and the business of CA Connect.

     LISOF

     The Group acquired 100% of LISOF for a total purchase consideration of R127.3 million. The consideration
     was settled partly through cash of R68.7 million, and R58.6 million settled through the issue of 8.3 million
     ordinary shares. The acquisition was effective on 1 January 2018.

     MILPARK

     On 19 March 2018, the Group acquired an effective 70% interest in MBS Education Investment Proprietary
     Limited (MBS Education) (the holding company of Milpark Education Proprietary Limited (collectively
     Milpark), through its investment in Milpark BEE Investments SPV Proprietary Limited (Milpark Investments),
     with Brimstone Investment Corporation Limited (Brimstone), the Group's B-BEE partner, acquiring a
     30% effective interest in MBS Education. The Group paid an initial cash settlement of R207 million and a
     subsequent top-up consideration of R3.6 million.

     On 20 March 2018, the Group and Brimstone concluded an asset-for-share agreement whereby the Group
     acquired 17.2% of Brimstone's 30% interest in Milpark Investments for a purchase consideration equal to
     R50.9 million (swap-up). This consideration was settled through the issue of 9.8 million ordinary shares
     (subject to a B-BBEE lock-in period of seven years), at an issue price of R5.20 per share, being the volume
     weighted average price of the Group's share price, R6.50, less a 20% discount. Following the swap-up, the
     Group has an effective 87.2% shareholding in Milpark with Brimstone's shareholding being an effective 12.8%.

     CA CONNECT

     Effective 12 April 2018, Milpark acquired the business of CA Connect for a purchase consideration of
     R32.3 million, with the deferred consideration being subject to achievement of certain profit targets.
     The Group's purchase consideration amounted to R28.2 million for an effective interest of 87.2%. The purchase
     consideration was settled partly in shares and partly in cash on 12 April 2018.

     PRESTIGE ACADEMY

     On 1 November 2018, the Group acquired 100% of Prestige Academy Proprietary Limited (Prestige Academy)
     for a total purchase consideration of R23.5 million. The initial consideration of R16 million was settled partly
     through cash of R10.4 million and R5.6 million settled through the issue of 1.5 million ordinary shares.
     The deferred consideration is subject to certain performance targets being realised during 2018 and 2019.

     The fair value of net assets acquired and the related cash outflow on acquisitions are as follows:
     
                                                                                        CA     PRESTIGE
                                                          LISOF       MILPARK      CONNECT      ACADEMY         TOTAL  
     Net assets acquired                                  R'000         R'000        R'000        R'000         R'000   
     Property, plant and equipment                       69 524        1 0542            -          566        80 632   
     Intangible assets                                   17 100        50 445        2 829       13 305        83 679   
     Deferred tax asset                                   1 626        13 857            -          767        16 250
     Deferred tax liability                             (6 703)       (2 671)        (993)      (1 639)      (12 006)
     Other financial assets                                   -           510            -            -           510   
     Trade and other receivables                          2 828        44 848        3 547        1 446        52 669   
     Trade and other payables                           (2 350)      (29 566)            -      (1 287)      (33 203)   
     Finance lease liabilities                                -             -            -        (267)         (267)   
     Income received in advance                         (3 945)      (83 325)            -     (13 856)     (101 126)   
     Income tax payable                                 (1 472)             -            -        (653)       (2 125)   
     Income tax receivable                                1 348         6 667            -            -         8 015   
     Borrowings                                        (16 653)             -            -            -      (16 653)   
     Loans and advances                                (21 518)             -            -            -      (21 518)   
     Cash and cash equivalents                            2 729        34 415            -       15 176        52 320   
     Total identifiable net assets                                                                                      
     acquired                                            42 514        45 722        5 383       13 558       107 177   
     Non-controlling interests                                -       (5 853)        (689)            -       (6 542)   
     Goodwill                                            84 824       221 582       23 484        9 926       339 816   
     Total consideration                                127 338       261 451       28 178       23 484       440 451   
     Satisfied by:                                                                                                      
     Cash consideration                                  68 690       210 588        6 392       10 400       296 070   
     Share issue                                         58 648        50 863        8 006        5 600       123 117   
     Deferred consideration                                   -             -       13 780        7 484        21 264   
     Total consideration                                127 338       261 451       28 178       23 484       440 451   
     Net cash flow on acquisition                                                                                       
     Cash consideration paid
     Cash and cash equivalents                         (68 690)     (210 588)      (6 392)     (10 400)     (296 070)   
     acquired                                             2 729        34 415            -       15 176        52 320   
                                                       (65 961)     (176 173)      (6 392)        4 776     (243 750)   
    
5.   HEADLINE EARNINGS/(LOSS) PER SHARE
     
                                                                                               Audited        Audited
                                                                                           31 Dec 2018    31 Dec 2017
                                                                                                 R'000          R'000  
     Reconciliation of headline earnings/(loss):                                                                        
     Basic earnings/(loss)                                                                      63 270        (7 037)   
     Adjustments attributable to parent:                                                                                
     Loss/(profit) on disposal of property, plant and equipment                                    425            (1)   
     Compensation from third parties for items of property, plant and                                                   
     equipment that were impaired, lost or given up                                            (1 025)              -   
     Tax on above                                                                                  168              -   
     Headline earnings/(loss)                                                                   62 838        (7 038)   
     
6.   CASH GENERATED FROM/(UTILISED BY) OPERATIONS
     
                                                                                               Audited        Audited
                                                                                           31 Dec 2018    31 Dec 2017
                                                                                                 R'000          R'000  
     Profit/(loss) before taxation                                                             113 362        (2 316)   
     Non-cash and other items disclosed separately                                              20 478          4 526   
                                                                                               133 840          2 210
     Movements in working capital                                                              (33 765)      (39 443)   
     Decrease/(increase) in inventories                                                          2 998        (3 561)   
     Decrease/(increase) in trade and other receivables                                         22 323        (2 760)   
     (Decrease)/increase in trade and other payables*                                         (21 803)          7 323   
     Decrease in income received in advance*                                                  (37 283)       (40 445)   
     Cash generated from/(utilised by) operations                                              100 075       (37 233)   
     
     * Trade and other payables has been reclassified to disclose contract liabilities separately in accordance with IFRS 15.
     
7.   RELATED PARTIES

     Related-party transactions, similar in nature to those disclosed in the Group's annual financial statements
     for the year ended 31 December 2017, took place during the year. Refer to the Group's Consolidated Annual
     Financial Statements for the year ended 31 December 2018 for further detail.

8.   OPERATING SEGMENTS

     The Group considers its Board of directors to be the chief operating decision maker and therefore the segmental disclosures
     below are aligned with the monthly report provided to the board of directors. Operating segments with similar economic 
     characteristics have been aggregated into one reportable segment due to all of the services being related to higher education 
     services within southern Africa. However, management does make decisions based on what they constitute to be reflective of 
     the underlying financial performance of the Group and as such, the Group has identified core headline earnings as this measure.
     Non-core includes certain items which may distort the Group's performance from year-to-year, and by excluding this, should 
     provide management with a more consistent reflection of the underlying financial performance of the Group.

     Reconciliation of the Core headline earnings:
     
                                                                         Audited                     Audited
                                                                    31 December 2018            31 December 2017
                                                                                 Earnings                    Earnings
                                                                 Earnings       per share    Earnings       per share
                                                                    R'000           Cents       R'000           Cents   
     Headline earnings (Note 5)                                    62 838             7.8     (7 038)           (1.2)   
     Adjusted for non-core items                                                                                        
     attributable to parent:                                                                                            
     Finance costs on deferred                                                                                          
     purchase consideration                                         2 604             0.3           -               -   
     Acquisition costs                                              1 280             0.2       4 744             0.8   
     Listing costs, legal and other fees                                -               -       4 154             0.7   
     Amortisation of client list                                    4 496             0.6       1 916             0.3   
     Tax on above                                                 (1 266)           (0.2)       (538)           (0.1)   
     Core headline earnings                                        69 952             8.6       3 238             0.6   

9.   EVENTS AFTER THE REPORTING PERIOD

     There were no significant events after the year ended 31 December 2018.

STATUTORY AND ADMINISTRATION

Directors: CR van der Merwe*, S Totaram*, D Singh*, PN de Waal**, RH Stumpf^, R Kisten^, DM Ramaphosa^,
KS Sithole^, A Mellet** (Alternate to PN de Waal)

* Executive director ** Non-executive director ^ Independent non-executive director

Registered office: Unit 13, San Domenico, 10 Church Street, Durbanville, 7550

Company secretary: Stadio Corporate Services Proprietary Limited

Transfer secretaries: Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue,
                      Rosebank, Johannesburg, 2196. PO Box 61051, Marshalltown, 2107

Corporate adviser and sponsor: PSG Capital Proprietary Limited

Website: www.stadio.co.za

Announcement date: 4 March 2019




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