Advtech delays results as rumours swirl

Speculation is growing that Advtech is on the radar of a potential foreign buyer, as mystery continues to surround the delay in the release of the school group's year-end results.

Advtech, which owns the Trinityhouse, Crawford and Varsity College brands, is playing its cards close to its chest over why it postponed the announcement of its results to tomorrow. It said this week only that "matters have arisen which are not of a financial or audit nature, which necessitate a delay in announcement of results".

Analysts close to the company, however, have mentioned the name of at least one large international education group - Laureate International Universities - as a possible suitor.

It is understood that a delegation from Laureate visited South Africa about six weeks ago, and apparently expressed a desire to expand its footprint in South Africa and on the rest of the continent. Laureate took over the management of the South African arm of Australian university group Monash in a partnership in 2013.

Attempts to contact Matthew Yale, the group's senior vice-president for global communications and public affairs, were unsuccessful.

Advtech CEO Leslie Maasdorp said on Wednesday: "We don't comment on market rumours."

Maasdorp said that the Advtech board would have to "apply its mind" to any proposal first - so this was not a reason for the delay of results.

Coronation Asset Management, which owns 26% of Advtech, said it had no idea if any deal was brewing.

Karl Leinberger, Coronation's chief investment officer, said: "I can't comment. We don't know what's happening there. We'll have to wait and see."

But Advtech is looking for a significant cash injection to finance its expansion plans in its bid to keep up with high-flying rival Curro.

Maasdorp's company aims to grow more than 50% over the next decade, and said it planned to fund the R3-billion growth plan from operational cash flows. It aimed to increase student numbers 70% this year.

But late last year, analysts forecast that Advtech might need to approach shareholders for money in a new share offer.

Maasdorp said this week that the company had previously indicated that it would approach the market "at some point".

A delay in the results may also be related to recent acquisitions.

Last year, Advtech bought Centurus Colleges for R712-million, prompting the market to speculate that it had overpaid for the sought-after target, which Curro had also been eyeing.

In November, Advtech said it would buy the Maravest Group for R450-million through a combination of cash and shares, to add low-fee schools around Gauteng to its portfolio.

For now, the secrecy around the reasons for the delay has baffled equity analysts, who declined to comment on the record.

One Cape Town fund manager said results were usually delayed if a company had to "reaudit its accounts to get the true reflection" or if it intended to raise money via a rights issue.

Advtech shares closed at R9.02 on Friday. While the share price has climbed 21% in the last year, it has lost 6.4% in the last month. Shares in rival Curro have gained 23% in the last year.