We assess the ADH School operations and find Non-SA schools to have driven the FY19 enrolment growth, with no growth in SA enrolments. We find the diversification of the schools’ portfolio timely as growing mid-fee enrolments have offset learner losses at premium schools in SA. In our view, the growth of mid-fee enrolments is likely driven by schools’ fees structure and the proximity to competitor’s premium-fee campuses. Considering more matriculants qualify for higher education than there are places at public higher education institutions, we believe pressure on the institutions continues to build. We believe the increasing number of NSFAS recipients exacerbates the capacity pressure on public institutions, which bodes well for the prospects of private institutions such as ADH.
