Good afternoon. Welcome. Thank you very much for joining us here today for the half year results. Just a few housekeeping issues as usual. All questions we'll deal with at the end. For those online, you may submit your questions, and anybody in the auditorium who's here today and wishes to ask questions, we'll handle questions right at the end then. Secondly, the presentation, I understand, will be available on the website online immediately after the presentation, and the webcast will also be available later on today. I think so. Straight into the presentation. By now I'm sure majority of you will have seen our results, which we are extremely proud to present today.
We think a really good set of results on the back of our trend of consistent good performance over the last few years. We are delighted. I think first and foremost, we would say that these results, the strong underpin is, of course, our enrollment figures, and we've been very pleased that in fact every single division has contributed to the set of results. If you look at that enrollments, again, as I mentioned, it's really another set of good results on the back of a consistent performance in this area in both our schools and tertiary divisions, and where we have now some 88,600 students.
I think what's also important to remember is if you take into account vocational qualifications, short learning programs, skills courses that we also run, we never include those in our full-time, student numbers. Actually, the ADvTECH system is reaching in excess of 100,000 students. It is really quite significant, and provides additional opportunity to us that we don't actually report. It is really the bedrock of our business. It is very pleasing to see that in each of our divisions, we'll just unpack that a little bit. Schools South Africa at 6% enrollment growth, given the environment that we're operating in, I think was really encouraging. Schools rest of Africa, this is where we are expecting to be able to realize significant growth.
Again, on the trend of a consistent level of around about 10%-11% growth in Africa, another 10% growth is really quite encouraging for us. Schools division in total being up 7%. Our tertiary business, which has achieved a significant level of critical mass and scale, continues to deliver 4% enrollment growth on that score. Overall, enrollment up just over 5%, and that certainly is underpinning these results. I think in addition to that, we've obviously been focusing on taking moderate price increases.
Our strategy is very much understanding the pressure on disposable income and consumers, particularly in South Africa, but it applies across the continent, quite honestly, where the phrase that we always use is, "Demand is not the problem, affordability is the issue." For us, we really are applying our minds and our efforts to try and ensure that we can focus on delivering quality education at affordable prices. A lot of our efforts are going into efficiencies, effectiveness, eliminating waste and duplication, which is probably something that you'll hear me repeat during the course of this presentation. It's very much at the top of our minds. Given that underlying enrollment growth, I think it's so pleasing to see the margin improvements that we've had.
If we look at our schools in South Africa, I think, I would really hope that you will able to see the schools business now is on a really good trajectory and performing well for us. We've had another percentage point growth in margin in the schools South Africa, a really significant over 6% margin growth in the rest of Africa. The tertiary business, I think we have touched 25% once before, Didier, if I'm not mistaken, but back up to that 25% level. The guidance that we always give is that we would like to see our educational businesses in that early 20%s up to 25%. The progress, I think, is really encouraging.
Even our resourcing business, which of course is a completely different type of business, we're required to recognize the revenue of the payrolls and the likes that we run. You'll see significant revenue growth in that area. It is a much lower margin business, but we've even made quite significant strides in growing that margin. Really pleasing, and that's allowed us to deliver an operating profit of 23%, NEPS at 25%. A very clean set of results in total. Again, we're very pleased. I think particularly when one looks at the background, the environmental circumstances in which we are operating, you know, it is well recorded, it is well understood, I'm sure in this audience, that the South African economy continues to seriously underperform.
Consumers under massive pressure, not only from a lack of economic growth, but also hard hit by inflation. I think if there is one element of perhaps slightly good news, it's that the inflation rate has started to come down. Although I think given rand-dollar depreciation and fuel prices, the expectations, we'll see that move up a little bit again. Hopefully, we're starting to get into a cycle where inflation will come down. That's about the only good news in what is some really depressing figures in the South African environment. Of course, supplemented a bit by a significantly better picture in Africa. These are economies that are in fact predicted to grow ahead of global growth rates.
I mean, I was reading in The Economist just the other day that the expectation of China is that it's growing at 3.2%. If in fact the Africa figures come through at this sort of 4%, 4.5% level compared to China, which everybody expects to be significantly higher, it does kind of position Africa as an opportunity. We do understand that's off very low base and that GDP per capita is low, but growth is still nevertheless a really important factor for us. Not to mention the population size, urbanization, and the youthful profile of that population. South Africa, disappointing. We expect that to be the case for the foreseeable future. There's nothing that we're actually anticipating is gonna shift or change that. We do see more opportunity in Africa.
There are other challenges of operating in Africa, but if you are in the education business, then I think Africa represents a fabulous place to be. We're quite excited about that. Our financial performance, I think 16% revenue growth when compared to the compounded growth rate of 12% over last year. I think you must remember that we took no price increase in the year following COVID, understanding and recognizing the pressure that consumers were under. Again, our relentless focus to try and ensure we deliver real value. We didn't take a price increase there. Revenue growth of 16% compared to our compounded growth rate of 12%, really encouraging, particularly as we tend to take moderate price increases. Volume growth, the student base, the student enrollment numbers, really underpinning and somewhere we focus on. Okay.
Pleasing to see that translating into operating profit of 23%. Emphasizing the fact that our focus is on operational efficiencies, effectiveness, making sure that we eliminate any kind of waste and duplication, and we can pass that on to the consumers, and deliver real value in quality education. I think a pleasing result for us there in line with the strategy that we've been following. Then the enhancement of our operating margin. Now it's necessary, and I will unpack that a little because of course at 19.2%, the impact that our resourcing business with its significant growth in the revenue line and its lower margin business is impacting that to some extent.
If we look at it, our educational business margin consistently growing, whereas our resourcing business, obviously in a totally different sector, totally different business unit, operates at a different margin level, and that skews it. If we look at the educational business themselves, our schools division, moving up into those 20%s, the early 20s% is the indication that we've got, and we've made good progress towards that. Our tertiary division continuing to perform, I think, an excellent business and consistently delivering great results for us. If we look at the schools between South Africa and the rest of Africa, again, you can see the progress we're making in South Africa. The portfolio of brands functioning well, performing across the board.
The opportunity that exists in the rest of Africa, we've always indicated that we do anticipate that there will be more margin for us in the Africa businesses than there would be locally. I think we've been able to see that coming through in a very strong manner in a relatively short space of time. This very important progress for us in the right direction, and we're delighted to be able to report this result. That means that our normalized earnings per share up 25%, a compounded growth rate of 26%, so consistent performance over a number of years now. Even more pleasing, I think, is the fact that in U.S. dollar terms, we're generating really good returns. Okay?
8.5% growth in U.S. dollar, given the fact that the rand has depreciated the way that it does and the volatility of the currency, we think this is an important measure to look at. Understand, you know, inflation last year in the United States was at that, around that 8% level. It has dropped down to sort of 3.2% now. Our return at 8.5% in this current environment, we think is a really good performance in hard currency terms. Pleasing for us too. Schools division. As I've said to you, we are delighted in the sense that the schools business is now on a really solid trajectory moving in the right direction. Overall, 15% revenue growth, 25% operating profit, up to ZAR 1.6 billion.
It's really solid. Our portfolio of brands, well-established, well-resourced, well-structured, with those management teams who are responsible for each of those brands, clearly focused on the value proposition and their operational efficiencies, is really what's driving our success. I mentioned that the enrollments is the key indicator for us, the success of this business, and I'm pleased to report that every single one of our brands has shown positive enrollment growth. The premium sector brands, the mid-fee, as one might anticipate, and our specialist brands, all delivering really good growth performances. That I think bodes well and is a clear indication that the structure and the resources that we have in place are well-focused and delivering an excellent result.
Overall, again, a performance, you can see the sort of the acceleration, 15% growth in our revenue, a compounded growth rate over the last few years of 11%. Profit up 25% against a compounded growth rate of 20%. It is the improvement from this improvements we've been looking for from our schools division. It is accelerating and the operating margin moving in the right direction. Again, the same applies for both South Africa and rest of Africa. Again, I think emphasizing the potential that we see in this market, to have good growth and profitable businesses. Now, of course, there are a lot of complexities in operating in different environments, and we will be very cautious, and we will conduct thorough due diligence before committing any investments.
We do believe that the continent of Africa represents great opportunities, particularly in the area of education. A point I make often, I know that the question is about some of the South African businesses' experience on the continent has not been good. I do think there are some fundamental differences between the education sector and other endeavors. I would suggest that, you know, we have no dependency on supply chains. A lot of the operations that have been into Africa and have struggled is because either equipment or raw material, invariably both, are dependent on U.S. dollar rates. Educational institutions are autonomous, independent operating units that are usually seen as very good citizens, and they are independent of supply chains or in fact, dollar-based costing. I think that makes us fundamentally different.
The inherent demand that we are seeing for education, I think South Africa proves the point. Despite really tough economic circumstances, demand for quality education remains. That's the same across the continent. It's just that some of the economic indicators are even more bullish and positive than we experience in our home base. We are encouraged by the rest of Africa and what it could mean and by way of both growth and profitability for ADvTECH in the future, with careful consideration on investments. I know a question will be asked, and often, the comment is made, is that we may be very susceptible to emigration, and that's of course, of great concern in the sense of our volumes, our enrollment numbers.
I'm pleased to point out that if we look at this period under review, we had less than 1,000 students leave the system from an immigration or relocation perspective. That is, by the way, if they weren't actually going into another ADvTECH system in another location. That had dropped down by 37% over the prior. I don't think we should read too much into that. I think the issue of immigration is very real. I think it remains a factor. It could well be that the period we're looking at is that there was pent-up demand after the COVID lockdowns, and a lot of people left that period, and the period we're looking at less impact. I think, you know, nevertheless, the absolute number is not that significant in the overall scheme of things.
It is an issue. We are mindful. We do measure. Just to let you know, in fact, what we do is of all of our teams is that we divide leavers into what we call controllable and uncontrollable. Uncontrollable are issues such as immigration, relocation. Our teams can do nothing about that if individuals have decided that that's their future. Likewise, if they are under financial constraints and unfortunately have to leave our system because they can't afford the fees, that's not our team's responsibility either. Everything else is carefully examined, measured, questioned and understood, and our teams are expected to respond if there are any other reasons for leavers and departures from our system. That's the way that we treat that in our business. Okay.
Moving on to perhaps more positive areas, some new initiatives for us. We're opening a new Bridge Assisted Learning in Morningside. This is something that we have been working on for a while with our initial offering. It is a difficult model, and that's why we have not opened more of these sooner, is that we wanted to perfect and understand. It is a much lower student numbers business. As you can probably understand, there is a need for a much more, a much closer level of intervention and supervision and instruction. It runs with smaller numbers. As a result, the commercial model is more difficult. Nevertheless, it's an extremely important area with a high level of demand in our society.
If we're able to meet and fulfill that demand with a commercial model that we believe is sustainable and meets our returns criteria, which we've now perfected with our pilot model, we're now in a position to roll out, and we're quite excited about the new one that we'll be opening in Morningside. That's opening next year. Chris, correct? Okay. That'll be one. We will look to try and roll out into other centers and other areas where we perceive there to be viable demand for learning-assisted models. That's quite exciting, and I think it overall adds to ADvTECH as the leader in educational solution provision. That's, I think, very good for us on that score. Very exciting. Raslouw, which we opened this year.
I think we were all very proud of Trinityhouse Glenvista, which beat all of our other previous opening records, I think, and in fact, never even had a J- curve. Well, the Pinnacle brand team certainly met the challenge in opening Raslouw. We had a business model that anticipated we'd start with some 240 enrollments. We actually did start with 385 enrollments , so 60% in excess of what our model called for. A fabulous opening, and we've even grown those numbers by another 5% into term two. A huge success for us. What we've had to do, of course, is bring forward the future CapEx in order to meet the level of demand. That's a nice problem to have, and we're delighted with that opening.
Gaborone, a great success for us and a really important school in so many respects. You will understand, and I think we've spoken previously about the demand that we've experienced in Gaborone. Well, this school is now up to 3,000 students, okay, with significant demand and growing. It delivers outstanding academic results, and the correlation between academic results and demand is incredibly strong in Africa. There is a clear understanding and focus from parents of the importance of quality academics and good academic results. If you're able to deliver on that score, the finest and most powerful marketing message we have is word of mouth. If we deliver on a quality academic promise, the demand is there. That's really shown fantastic.
What we're delighted with is that we can then actually return that by investing into the site, and we have significantly enhanced the offering here. I can see Frank in the room, and Frank probably remembers Gaborone and probably paid a visit to that site. I'm not sure if you recognize the picture, Frank. It really is fabulous. A new science and technology block that is state-of-the-art, and I think will be really well received by the students and parents in that instance. Upgrading of the sports facilities as well.
I mention the importance of the school to us because not only do we have 3,000 students in that school, but we deliver fantastic academics, and it is the benchmark model that we're looking at as we move into Africa. We've been able to take a lot of the lessons that we've learned at Gaborone, for example, and apply to Makini in terms of how to run a school of 3,000 individuals, deliver the quality academics, improve the facilities, and it's a wonderful model for us to use as a benchmark. Crawford International in Nairobi, again, another success story for us. We've been delighted with the demand. Again, delivering fantastic academic results, which are pretty hard. Again, the demand is forcing us to bring forward the phases of investment, even earlier in order to be able to accommodate that.
Again, a nice problem to have. Crawford is certainly establishing its reputation in the Nairobi market in a very sweet spot, which is working well for us. We talk about the operating leverage effect that we've had. Here's clear demonstration of it. If you look at the investments that we've been making over time in terms of growing the capacity, the number of students that we've had enrolled, the existing building capacity, you can see the utilizations of existing building going up. Ultimate capacity, we've been investing all of the time and realizing we still have additional capacity, but the utilization moving from 56%-66% of ultimate capacity gives a clear indication of the operating leverage effect and 81%-84% on assets in the ground capacity utilization. We continue to look at that and measure it.
After a period of significant investment, those utilization rates coming up and obviously translating into really good results for us. This is something that I wanted to talk about. I'm not sure I'm gonna be able to do justice, but what we are so excited about, and in previous presentations, I've mentioned how we now believe we've earned the right to start putting real competitive advantage between the competitor and ourselves in a sense, and the areas that we wanna focus on are in being the experts in teaching and learning. That's at the heart of what we do, quality academics. If we do that well, as I've mentioned, the most powerful marketing tool we have is word of mouth on the reputation that our institutions have. Therefore, if we focus on teaching and learning and deliver on that promise, that we believe will seriously.
We think that we are in a wonderful position, probably unique in a sense, is that if we look at our tertiary and our schools business combined through the central academic team, we not only offer education as one of the most important faculties in our tertiary, but we can take the very best of the students that are coming through that system. We can secure them into the ADvTECH business. We can use the central academic team and our quite extensive range across 109 schools, different brands, different geographies, and provide real teacher development learning and ensure that we have the best of talent. Of course, the second area is we can support that with technology. We are firm believers that technology, rather than perhaps being disruptive as it's often spoken about, but we believe that technology is a fabulous enabler.
If we embrace that and embed it into the way that we do work, we can extract real value. One of the most exciting areas that we're dealing with is the development and use of technology and embedding that technology into our system. We've developed a product called ADvLEARN with a bespoke unique software house. This I must say, as I said to you, I hope I'm gonna be able to do it justice, but I think our academic teams are hugely excited that this really has the potential to kind of transform teaching and learning in the way that we actually operate in our schools. We're using artificial intelligence in this tool. What we do is our vision is that we will have a personalized development plan for every single student in the ADvTECH system.
What happens is that we've started off in math and science. We intend to extend this across all subjects and ranges. What happens is that we use this in terms of setting homework. The children do their homework using the tool. Because of the AI and the algorithms, it assesses the concepts that the child has mastered and then moves on to a different level or repeats the work in order to until that foundation is properly built. That's the one aspect of it. You can understand that, you know, when a teacher is standing in front of a class of 25, it's very difficult to understand exactly where every child is, and every child learns at a different pace.
With this tool, each child can have a personalized development plan that is based on the mastery of particular concepts and building solid foundations. That's not all. The power is in the data that comes out of it, because then the teachers not only are able to see where they need to focus attention, but we can start benchmarking right across by grade, by school, by our divisions. We link that into the international benchmarks that we're using and the assessments as to where children should be at particular points in time. Then we can really direct the emphasis and the focus so it's so much more efficient and effective. I'm pretty sure if I've done a half-decent job in conveying this to you, our academic team do it significantly better than I.
You can understand the power that this has to transform the way that people teach and learn in our system. We, I think, again, are uniquely positioned to take advantage of that because of our scale. Okay. We're very excited. The idea being that the students are set homework, personalized learning paths are developed. It adjusts assessments, so it actually produces assessments for the children to do based on what they're demonstrating their capacity is and where we should be testing. The most important thing, perhaps, is the information, the data that we get out of that. We put that into dashboards that allow us to quickly identify where there are problems. This, for example, is in an area of electronics and sound. These are the problems, the others are okay, the concepts.
Alternatively, to look across grades, across subjects, and we can then actually direct our central academic team to where we have teaching weaknesses or deficiencies we need to supplement. The power of this tool is incredible and unique to us. I, as I said, I think other organizations would find incredibly hard to follow. Another exciting development for us. Moving on to our tertiary division, I have to say, I often feel almost sorry for our tertiary division now. It is a fabulous business and continues to deliver terrific results for us. We've had some exciting and some change in the venture into Africa with our schools business. If you look at the performance of our tertiary business, 13% revenue, 19% operating profit growth.
Again, the fundamental of the success of this business is that we have clearly established brands, well-positioned and with management teams that understand their value proposition, their role, and what their purpose and delivery is. These brands have been working exceptionally well for us for a number of years now. You can see the consistent and continued performance and look at the operating margin that we deliver. Okay. Again, our growth, essential for us. Growth for us is a critical measure. It is the key driver of our business. More than that, it's really the acid test as to whether our value proposition has traction in the market. That's the way we know that we are successful and that we can continue to have success or if we've got to make adjustments.
If we're getting volume growth, that means the consumers are voting to support our proposition. Consistent growth in this area. I know this is a question that's often asked, the idea about online education and the opportunity that exists. Well, I wanna remind that we have all modes of delivery. Face-to-face, online, distance, and blended learning. We, our goal is that any time, anywhere, at any place of the student's choosing, we will be able to provide a certification, accreditation, qualification that is meaningful to that student. We cover all modes of delivery, and we take them all equally as seriously. Now, I must say that our learning is that the online space is becoming particularly relevant to postgraduate qualification. I think, and that's very understandable.
An undergraduate degree and a campus experience is a wonderful thing, and I'm sure all of you probably look back on your student days with a great deal of fondness. I battle to remember some of mine, but there's other reasons. But the online offering certainly helps when you become a working adult and you're looking to extend that lifelong learning. That's where we're seeing the difference. Our growth in our online is exciting, and we certainly have a good, strong presence. Every single qualification that we register or accredit is done for both distance or contact. Okay. We provide the full range of products. Speaking of which, we've extended our faculty base quite significantly in the upper area of engineering, health sciences.
I can't let the presentation go by without saying that we have the largest law faculty in the country. Okay? Again, seeing Frank here, and Frank will remember. When we first ventured into law, it was in a partnership with University of the Free State, Frank. We grew their faculty. They had 100 law graduates or undergraduates in their faculty. In the first year that we did a qualification with them and made it available, we grew that faculty to 700. Okay. We've continued to grow now with our own qualification. That was one that we shared, and our law faculty is now the largest law faculty in the country. Okay. It kinda shows the premise and the promise that we have. Okay.
In addition to that, we have a range of qualifications that starts at skills development and goes all the way through to doctoral programs, and I emphasize in each and every mode of delivery. Okay. We cover the full spectrum. We're also adding to it. We have 233 registered and accredited qualifications, which I think is probably nearly 3 x as many as some of our competitors, and we have some 51 registered and accredited qualifications in the pipeline for development. We have a really good pipeline following through. We are extensive in this area. New site, Rosebank College will be opening in Mbombela with one of our digitally enabled campuses. Okay? Something which we think is very exciting. It's really worked well for us.
This can be either a tuition center or blended learning more specifically, which I happen to feel is probably one of the best ways of learning. The combination of technology together with some face-to-face and also the collaboration with other students in our campuses have proved to be very successful, and not only in volume growth, but in terms of the quality of the academics. A new campus. We're hoping to get the accreditation and the registration sorted out for opening. Even if we don't as a full signed campus, we'll use it as a tuition center, but that project is underway, and we anticipate opening in 2024.
I'm also hopeful that at the next presentation, you might hear about the first digitally enabled campus in the rest of Africa, but I'll keep that a little bit of a dark secret. That would be a really exciting development for us. Okay. Our resourcing division remains a tale of two cities. We have our local South African operation, which of course, is so closely linked to the economy, the performance of the economy. I have to, again, I've done it in the last couple of presentations, I think, but take my hat off to the management team, who do an outstanding job in some of the most difficult circumstances. We talk about how we in education are quite fortunate because there is a degree of annuity returning students in our business.
Once we've secured, and if we do our jobs properly, those people will be back for another 12 years or 3 years or 4 years, depending on whether it's schools or tertiary. Our resourcing business get up every day, and it's round number two. They do a really tough job, and of course, South Africa has hardly helped. Their foray into Africa to look at alternative geographies and alternative industries has really paid handsome dividends for us and is the driver of the resourcing business' performance. We did during this period sell a small organization, Contract Accountants, to some former owners. There is a slight adjustment in the sense of the sale of that business.
Our revenue continues to grow on the back of the Africa expansions. Operating profit up, and you can see even the movement in our operating margin. If we look at South Africa, revenue would have gone back. It has on a like-for-like comparison, but because of the sale of Contract Accountants, if you looked at the like-for-like, we still would have grown by about 6%, I think it is. Okay. The profit impact is insignificant in a sense. South Africa, the story here is holding our position, doing the best we can in what are some very, very tough economic circumstances. Africa has been a fantastic initiative and opportunity on the part of the Resourcing leadership. Glenn and his team are to be congratulated because this business continues to grow.
To the point, as I mentioned, where even the improvement in operating margin, you know, the revenue growth and stuff is starting to have an impact on the total group position, which is why it's necessary to unpack margin by education, and resourcing now. This is a phenomenal success for us and continues to be a source of great news. Okay. Our balance sheet remains incredibly sound. I think the big issue is that as we reported in the financials at the end of last year, was we did have a bit of a hiccup in terms of our information system that we were putting into place that we weren't able to build timeously, which meant that the debtors book and the tertiary did shift out a bit. I'm gonna cover all of that in some detail.
However, if we look at this period, what's important to remember is that 30th of June, which is the comparative period prior year, did not include that movement in the debtors book, which we experienced towards the end of the year. The base kind of exaggerates the impact. What I wanna point out is that even if you look at the total, that's moved by some 20% and revenue growth at 16%, so the difference is not even that great. It's very much in the area of tertiaries where you see, even if the schools have moved up, the absolute number is not significant. When one looks at the credit losses, that's only moved by 6%, whereas revenue, in fact, has moved by 16%.
In fact, losses as a percentage of revenue hasn't changed much. It's just been a shift really in terms of between the schools, which has gone down, and the tertiary, which has gone up. To give you some information and some feedback in terms of what happened with regards to those tertiary debtors, this is what we reported at the end of December. It was ZAR 669 million. The loss allowance of ZAR 380 million meant that we had to collect some ZAR 289 million . As at the 30th of June, we've collected ZAR 281 million of that ZAR 289 million . We've made really good progress in rectifying that problem. We still have a little bit of a way to go, but overall, the debtors remains incredibly well managed. These are difficult times.
We do understand that consumers are under significant pressure, but I think overall, we're very satisfied that we've come to grips with the problem we experienced at the end of last year. We've made good progress on that, and overall, the debtors remains very well managed and well in line with our expectations. Of course, continuing this real key feature of our business, which is our cash generation. Very strong cash generation again in the period, so solid performance and continuing the trend. Of course, that's enabled us to continue to pay down the levels of debt. If you have a look at our covenants, the banks would give us 3.25% EBITDA cover. Our own internal covenants are at 2.75%, even more conservative than that, and we're currently actually at 1%.
The level of borrowing is coming down quite significantly and a sound balance sheet. That's all been achieved. There's still quite a significant investment over the periods. You know, we have made investments in both our schools and our tertiary business to accommodate the growth that we've experienced, to reposition brands, put in the necessary assets to deliver on our promise. A significant investment program over the years, but the strong cash generation has enabled us to not only achieve that but pay down debt. We only calculate ROFE at the end of the year, okay?
We can't put in a figure for that, but I'm hopeful that you would see the trajectory, and we do expect that that would continue and that at the end of the year, we'll have some good news to report on where the ROFE is in a sense, which I think is really encouraging. CapEx spent about ZAR 270 million so far on one new school site, still investing in systems and technology to support our business and our delivery of our initiatives. But the majority of the CapEx going into adding to existing sites and facilities and IT in particular to support those sites. Well in control. We do expect to spend somewhere between ZAR 650 million and ZAR 700 million at the end of the year. That's CapEx to date.
All in all, I think, you know, the remarkable thing about education is despite the poor economy here in South Africa, but because of the factors across the continent, there is an inherent underlying of demand, okay, for quality education. We really are fortunate compared to a number of other sectors. That underlying level of demand remains. Even if it is driven by negative factors in South Africa, I say there are positive contributing factors elsewhere. We've got a really good quality asset base, a well-established brand portfolio with clarity in terms of what their value proposition is, management that are clearly focused and understand and live, breathe, sleep, eat the success of their particular brands. We've got strong cash generation, a very sound balance sheet, good financial controls and systems in place as we've been working on those over the years.
I think we've developed a really robust and flexible business model. I think that's been demonstrated in the results that we put to date, some of the issues that we've been able to deal with, and some of the initiatives that we've put into place. That's because of an investment in people primarily. I think a terrific organization in that sense with people who are so committed, dedicated, not only to delivery of quality academics, but to the success of our organization. Systems and technology and intellectual property that we're developing all the time to build real competitive advantage. Of course, we're a good ESG story too. That goes without saying. We operate in a terrific sector. Sound base, agile business.
We remain excited by the growth opportunities that we are hugely excited by what we still believe we can see as opportunities for us in the education sector. I think that's something which is exciting and I think that ADvTECH is probably uniquely positioned to take advantage of those opportunities, given our position in both schools and tertiary and our central academic team that we're seeing real benefit from leveraging across both of those sectors. Okay. That's not all. That kind of led the board to have the confidence to increase the dividend payment by some 30% over the prior period, to ZAR 0.30 a share, with that robust, healthy balance sheet, good cash generation.
I do say that we still see good growth opportunities, but nevertheless, it's encouraged the board to increase the dividend to ZAR 0.30, which is a healthy increase over the prior. Okay. Hope that's useful. We'll now take any questions. Didier. I see there are some there. Didier will read them out, and between he and I, we'll do our best to answer those. By the way, before you do, are there any questions, Frank? Yeah.
Roy, congratulations, first of all, to you and the team on the great set of results. Well done. We're proud of you.
Thank you. Sorry, Frank, I think we might need a microphone so someone's coming across in order for those who are online to hear. Sorry. Thank you.
Roy, I was very interested to see your focus briefly on the U.S. dollar returns and the compound annual growth rate. I think that's very encouraging and reflects a more international focus by the board and the management team. What I've wanted to ask was, if you looked at the return on funds employed in dollars on dollar assets, you might get a very interesting story because of course the weakness of the rand means that your installed asset base is continually declining in dollars, whereas your returns are growing in dollars. That perhaps paints a very good story of ADvTECH's performance. I think it's important to raise this because at ZAR 11 million market cap, you're probably no more than $0.5 million or $0.6 million in a highly competitive global economy in a sector which is becoming more and more international.
The other side of that coin is that with 80,000 students or 90 ,000 students, you're barely scratching the surface of 16 million students or so in South Africa and maybe 10 x that or more in Africa, which means the potential market is enormous. Of course, the problems of getting paid by all of those people are equally enormous. I think the question that I would like to ask is. What is the international focus? Because it's quite clear to me that the local competition is not really competition for the exposition you've given today of the outstanding performance of ADvTECH. The reality is that there are some very real and meaningful international competitors that we have to consider ADvTECH to be up against now. Perhaps that's something you'd like to comment on a little bit.
To tell you there was a question at the end of that, Frank. I was hoping it was just gonna be the commentary because I was quite enjoying that, but you are right. I mean, we do believe that it really is important today to try and broaden the appeal of ADvTECH to international investors. I can tell you it is work that Didier and I look at. In fact, I'm gonna quote some. Didier, please correct me if I'm wrong. I think at one point in time, our international shareholding was probably up at around about 25%. It's down to 13%. You know, we believe a lot of that is actually due to the South Africa risk environment more than it is our own performance, in a sense.
It is something that we're mindful of, and we do believe if we could bring in a significant pool of international investors would help us in terms of of ADvTECH and ADvTECH's profile. We are trying. In fact, I'm not sure if it's within the rules or what, but I will tell you is that Didier and I are actually going to the U.K. next week to meet with some investors and to try and assess what the appetite, what the sense might be towards ADvTECH and investment in in ADvTECH in South Africa and education more broadly. Hopefully, that might have some benefit. We'll see. But again, I think you raise a really the other issue is just about our international standing competitiveness education.
I think again, and we really do believe this. We've been saying it quite often, is that I think we are uniquely positioned to be the Pan-African education asset of choice. I think we understand, we acknowledge and we know that there are many different countries with many different nuances, cultures, environments that we need to understand. I think we're better positioned than most to take advantage of that. We certainly have our eyes lifted and at the horizon and we're working on opportunities in that area. Again, those things, whether we'll be able to bring them to fruition or whatever, there's a myriad of factors to take into account.
It's something that the board and the management are acutely aware of where the opportunity is, and we certainly are exploring and would like to believe that given the right set of circumstances, that we will be able to do that in the future. Okay. Right. Dale? Right. So you've got some questions here first of all. We'll come to the ones online. Dale?
Yeah. It'll be a short one. Just in terms of the rest of Africa operating margin that you were able to achieve. You know, over the medium term, what do you think the target is for that margin? It's already substantially ahead of the SA schools business, but where do you think you can take that to?
I really don't want to put a specific figure there, but we have always maintained that we believe that our African assets will be more profitable than the South African, because again, we think the risk factor, we will be looking for higher levels of return on moving into other geographies. We're comfortable that that's going to be the case because we look at the cost structures involved, and they are different to that in South Africa. We are quite comfortable that we would be able to extend that margin and it would be better than that which we deliver in South Africa. Okay. I'm not sure if we really want to put a figure on that in a sense, at this point in time. Didier, do you wanna?
We do believe it will be at a significantly higher margin than South Africa. I think it's already demonstrated in our Botswana schools, which we are using as a benchmark. It will pay out over the next few years.
Okay. Good. Online?
The first question actually came in before the presentation.
Right
Started. I think we have answered it, but it was really about details of the new school and the tertiary site, where they're located and the capacity, and then if it's included in the CapEx. I think the two sites we've dealt with, the Morningside Bridge and the Rosebank College digitally enabled site. The capacity at Morningside I think ultimately it's somewhere close to about 400 students, 410 students. The one in Nelspruit, Mbombela, I'm not quite sure of, a bout 900 students . That's it. Both are included in the CapEx for this year, but both are leased buildings. They really just refurbs and fit out. It's not a significant part of our CapEx for the balance of the year, but it is included in there.
Second question is to do with the two pilot solutions for the solar and what was the size of the plant and what percentage of electricity consumption did it replace? I don't have that information at hand. The asker of the question is welcome to pop me an email and I'll respond to it, you know, by return of email. Okay, the second question has got about six or seven parts to it, so I'm gonna break it down a bit.
First part is what were the average fee increases in each segment, excluding the mix effect? Again, I think, as we flagged in the presentation, we do try and keep somewhere close to CPI. You know, there's obviously or we take market factors into account, and there might be somewhere we go a little higher and somewhere we go a bit lower. We try not to deviate too far from there. Just later on in the questions, there was a bit about the rest of Africa and whether we apply that similar fee strategy in rest of Africa. Again, as we enhance some of the offerings of our schools like Makini and that we have been taking a little bit of additional price. We believe that the value that we're adding more than compensates, so the value equation remains very compelling.
I think maybe just to build on that. Actually, part of the acquisition is that we believe we evaluate an asset from the point of view of we think we can add value and how we can enhance. We do look also at where is that offering in the competitive space. For example, in Makini, we did anticipate that competitive offerings that were on a like for like basis, if we enhanced the offering, would give us some scope for price increase. There, our strategy will always remain trying to deliver real value to parents. If we are gonna take more price increase, that's because we believe we've added to the offering and we've enhanced the operation and the competitive circumstance warranted as such.
Otherwise, we would be looking to make sure that we have responsible pricing and not the idea and the concept that it's simply two percentage points above inflation, because it could be. We think that that's a road that you quickly run out of track on. Okay.
Okay. Next question is, could you please provide more color and examples of the investment made in the additional global benchmarking artificial intelligence tools to support personalized learning and the student information system? I think we did deal in the presentation with the artificial intelligence. There are also benchmarking exams, assessments that we carry out across many grades of the school to assess where the kids are relative to global averages. You know, again, it provides useful information to assist with the personalized learning journey, sort of together with the ADvLEARN. We continue to enhance our student information system. Another area that we've invested in this period is some training initiatives, particularly for our teaching staff.
I think that, you know, those cover the main initiatives. We have budgeted in the region of about ZAR 30 million for the full year for these initiatives, in the operating space. There is some that's CapEx, but the ZAR 30 million we've budgeted for, as operating expenditure. Again, if you look at our margins, not only have we been able to absorb this cost and you know, we've also increased the margins. The efficiencies that we are bringing through, you know, are really meaningful and allows us to invest in areas that adds value to our product and our offering, and we believe, gives us competitive advantage and makes our business, sustainable.
Okay, the next one is: Could you provide us with a status update and findings regarding the substitute teacher incident at Crawford College, Victoria, and how will this be managed and the fallout to the brand?
Okay. Look, it was an unfortunate incident. I think it was dealt with really well by the teams. Moved quickly. We do not tolerate that kind of a behavior. It was dealt with immediately. I think it was unfortunate that we'd literally fallen back on an individual who did work in the business as a quick solution, and I think the learning from that has been well made to the management teams. I don't believe that there will be any long-term fallout from the business. In fact, quite the contrary. I think often, as is the case in these things, it's how the organization handles the problem in which it's judged more than the incident itself, and I really do believe that it was very efficiently, effectively, and swiftly dealt with in the right manner.
As far as we're concerned, we will learn the lessons of how that appointment was made. Hopefully, you know, we will not repeat that mistake.
Okay. Next question. Why does the Gaborone International School pre-primary need to be rebuilt? What is the cost of just the rebuild of the pre-primary? I think that the school was never focused on pre-primary. It was always a primary and high school, and it had a little pre-primary element to it. But it was really to deal with siblings of the kids that wanted to come to the main grades of the school. There was never much focus and investment in there, you know, pre us acquiring it. I think that it is not the standard of facilities that we would like, you know, to be associated with. We've really improved the balance of the site.
You know, we think that we need to now bring this up to the required standard and also make it a more compelling proposition for parents, as opposed to just a place to house a sibling if your kid is in the main school. It is a relatively small part of the CapEx. I can't tell you the exact number offhand. The total CapEx of both phases were in the region of ZAR 100 million, of which ZAR 50-odd million was built last year or spent last year, and the remaining ZAR 50 million on phase II now. I would imagine that it's probably not more than 20% or 25% of that amount. It's a relatively small portion.
We do believe that it will enhance the proposition and make it a viable pre-primary going forward. In terms of the draft regulations published by the Minister of Higher Education and Training in September 2022, does ADvTECH currently meet all the criteria to qualify as a university? If not, which specific criteria does ADvTECH not meet?
Okay. The criteria that were published were really quite broad, wide-ranging, and not specific, and I think certainly inadequate in determining what is a university versus what is not. There has been comprehensive and detailed feedback, not only by ourselves, but by others in the sense of those criteria. We know the Department of Higher Education is working on that. We are in close collaboration in the sense of that process. Equally on our side, we are well aware of what we believe would be the requirements for us to conform to a university status, and we have quite significant and very aggressive plans to put those into place, together with timelines for which the management teams are fully committed.
Our determination is to try and make sure that we believe we are fully compliant with what we think would be reasonable university status criteria in the shortest possible time. It's difficult to assess exactly what will happen in this process, but we are actively and positively engaged in it and I think we'll manage that successfully.
Please share your views regarding the pricing power across your operational divisions. The second part, the Trinity School brand is growing and gaining popularity. Are there more plans of opening up more schools? If yes, what is the strategy?
Okay. I think, you know, pricing power, I, because we've shifted our approach in terms of saying we want to take increases that are in line with or even slightly behind inflation, if we possibly can, due to the efficiency and effectiveness and of our processes, systems, and structures. We do believe we are very strong in that perception that we will be able to recover whatever cost increases we are required. The most important of that, of course, is actually to ensure that we have the right caliber and quality of staff. Our business depends upon our teachers and our educators, and obviously, we wanna make sure that we are able to attract and retain the very best.
That's the primary driver, of course, and we are very comfortable that we would be able to recover the costs necessary to do that. What we want to try and do, though, on the other side of the equation, is to use all of our resources to ensure that we're delivering very effectively and in the most efficient way we can so that we can contain those cost increases. You talk about pricing power. Very comfortable we can recover cost increases. That's not the issue for us. It's about being responsible in terms of pricing and making sure that we have no duplication and wastage. I said I'd repeat that, and I've repeated it again.
Okay. In terms of Trinity, yes, we do believe it's a really well-established brand with good brand recognition and a strong presence. We are looking and we have plans in the sense of how we'll evaluate, but I wouldn't want to disclose any further details at this stage.
I think the next question was regarding the African pricing, which I think we've dealt with. Move on. In 2022, the annual CapEx investment required purely for to maintain current operations was around ZAR 200 million. What would your expectations be for this maintenance figure over the next 3 years-5 years? Again, I would think in the region of about ZAR 200 million-ZAR 250-odd million. Obviously, as we get bigger and there's inflation, it will move up a bit. Again, relatively little maintenance as a percentage of, you know, capital is required for the buildings. The you know often that goes through your operating expenses as repairs and maintenance.
A large chunk of that is in the IT equipment, which obviously needs to be replaced on a fairly regular basis, particularly as you introduce more of these tools and assessments and that. Still, I think ZAR 200 million-ZAR 250 million will cover it. Okay, the next question is, in the presentation slide, it showed that 999 students were lost to immigration from February 2022 to February 2023. Do you have an estimate of the first half of 2023 for those numbers?
I don't have that figure with me at the moment. What I would say is that we are not seeing any dramatic shift in it. Again, you know, it could be towards the end of the year, we have a change in that pattern, but I don't have an absolute updated figure here, no.
I mean, we will update it, as part of the year-end presentation.
Yeah.
When we do that chart for the following year's enrollments. Okay, the next one has to do with resourcing. What employment sectors are buoyant in the rest of Africa, Resourcing Division?
I think really the success of the resourcing, rest of Africa resourcing is that, in fact, we operate in a number of different geographies with a range of industries. It can be NGOs, it can be educational institutions, it can be resource businesses. There isn't one that actually tends to dominate. I'm looking at Lenn, and as I speak, he's nodding, so I must be saying things that are reasonably accurate. I think quite honestly, it really is the fact that right across the continent, there are opportunities for us to provide these services to organizations where it doesn't warrant them putting in their own investment behind the structure of service. We've become, if you like, the point of call for those organizations. We've built a reputation, and in-country partners that assist in the delivery of that service.
The opportunities have grown very successfully. The business, the management team have also worked quite extensively at their operations and improved their margin and in servicing those clients. There isn't one that's dominant. I am aware that, in fact, in some of the press reports, there was a reference to oil industry, and I just wanna say that it's not specific to one or any other. These tend to be a multiple of clients in a variety of different industries.
Okay.
Lenn, that's accurate? Okay.
Okay. The next set of questions. The first one has been answered around the fee increases. Second part of the question, some color on staff count addition and wage inflation.
Okay. I think, you know, obviously, we do look at where we are expanding, where our educational institutions are expanding. We have obviously needed to take on staff to accommodate that. However, on the other side, what we've done is looking at our administration processes and streamlining systems. We've been quite effective at actually consolidating, rationalizing, and keeping headcount growth well within, you know, or significantly less than as we expand our student base. That's the operating leverage that's coming. Again, we look at inflation. Maybe more important than that is actually we really do pay a lot of attention to performance and performance delivery, and we try to reward. We've introduced new remuneration schemes in our schools business in particular, where we have a much closer assessment of performance.
By the way, we also reward against achievement of other objectives, such as enrollment growth, and also productivity and efficiency ratios within the schools. People ratios, salaries and wages to revenue, and the likes. Actually almost building on versus fixed cost as a way of rewarding as well, which, it, you know, we believe is also quite innovative and allows us to reward great performance and the success of the brand. We think that's quite critical in terms of some of the performance elements we're showing. Does that answer that question, do you think, Didier?
Yeah. I mean, I think that also for us, the ultimate measure is what does the total cost of salaries and wages go up relative to revenue. You know, that percentage is favorable. We are continuing to get the efficiencies and the operating leverage. Again, as Roy says, a focus on the efficiencies and teaching. Hopefully, not only do we get the efficiencies, but we also spend the money where we enhance the value to the students. Next question is, what is the long-term vision for the Africa Schools business in terms of size?
Wow. Okay. 2.5 billion people on the continent, the majority of which will be under the age of 14. You can do the numbers. I think it's, you know, it's very hard to say. Our investment will be based on where we think the best returns are to be made, where the opportunities are almost real for us. I just think that, you know, for the foreseeable future, I think that there is good growth potential. It's almost unlimited in a sense, if that is such a thing, if you look at Africa and the size of it.
Okay. Then, next part. How many leavers in tertiary due to non-payment? In addition, what is the process around learner contract termination across both divisions? I don't have offhand the tertiary leavers. The pattern is no different to prior years. Every year, we will always have some drop out, not only for financial reasons, but for other reasons as well. Again, we always try and work with the students, you know, particularly where they are performing well in the classroom, to see how we can assist them, so that they don't, you know, forfeit the potential of getting an education because of fees. Obviously, we also can't carry all students. But we do try, you know, as far as possible.
I think the process across both schools and tertiary is we would always first give a level of you know warning that the account is in arrears and that it needs to be brought up to date. We would typically give a second warning that you know if it's still not addressed, it's going to lead to a suspension, and then ultimately, if it's still not addressed, we will then have to suspend the student. Again, we always take compassionate reasons into account where necessary. It's not a one size fits all. Overlaying that, we will try and take personal circumstances into account. At the end of the day, we need to get paid where we are delivering the service.
Okay. What types of qualifications lie in engineering and health science faculty?
Well, in engineering, we've actually, Louise is here, and she can help in terms of it. Electrical engineering. Okay. We're looking at civil engineering. We'll look to extend into all ranges of engineering we can. In health faculty, we're looking to extend. We have programs in for accreditation that would help us in those areas. I think what we're trying to do is to build qualifications in areas where we haven't previously been that are well-known in terms of where which would lead to meaningful career opportunities. Obviously, we need to do that on a phased basis due to the investment required and the need to skills and also the ability to get programs accredited. Louise, have I left anything obvious out? Okay? Okay.
Okay. Question around ADvLEARN, how long was the product in development for, and who are the partners, and has it been rolled out across all of our schools? Lastly, do you have any data yet pointing to learning improvements?
Answer that in this way. Firstly, we've been working on this for probably about a year. Okay. Secondly, I'm not gonna tell you who we're working with 'cause that's competitive advantage, and I'm certainly not gonna disclose that. Suffice to say that we've tied it up with a lot of contracts. Thirdly, do we have any data to suggest that it's working? Yes, we do. In fact, hugely encouraging. I think in fact, that's probably been one of the things that's enabled us to really get the rollout across our schools as successfully and as rapidly as we have because we're able to prove and demonstrate to the teaching community the real benefits and enhancements that this delivers. Yeah.
I think just to that, it has been rolled out across all of our South African schools, and w e're now going to start with a rollout to the rest of Africa schools as well. We also, the next subject that we hopefully gonna get across the line is English. Very exciting. Okay. Are the tertiary margins sustainable at the current levels? We believe they are so. You know, we have lots of efficiencies in the business and potentially could drive them higher if we chose to, but we also invest a lot back into the business, one, in order to get to university status, and two, to, you know, the continuous enhancement and sustainability of our business. We're very comfortable with the margins at that kind of level. Okay, next question.
Traditionally, second half is much less cash generative, with most of the cash flow in the first half. How will you finance the ZAR 750 million CapEx for 2023? Do you have existing facilities to finance the CapEx? I think, our banking facilities are just over ZAR 2 billion at the moment. At half year, we were a little over ZAR 400 million drawn down against those facilities. Yes, it is true we get the bulk of our cash in the first half, but we still do get significant cash coming into the business in the second half. We will manage that well within our existing facilities and, in all likelihood at reduced borrowings compared to year-end 2022.
We got more than enough headroom to handle that. Okay. In the Kenyan schools, how do you think about fee increases? Is it linked to domestic inflation, and does it factor into account the currency weakness?
It certainly is linked to domestic inflation in a sense of, because again, there is a strong link in terms of, salaries and wages as well. We wanna be able to make sure that we can recover sufficient to reward staff accordingly, and we need to take inflation into account. It is in fact taken into account those domestic circumstances. Yeah.
Yeah, I mean, the currency weakness. Our costs are by and large in the same currency. We have that natural hedge between our fees and our costs. That deals with that. Okay. Can you elaborate further on the university status with your views on when this legislation will be promulgated and how ready you are? I think we've all answered part of the question, but when you expect it.
Okay. If you wanna view, I suppose what we could say is that we are working towards a 2-year timetable where we would be ready within 2 years. Okay. I'm looking at the academic and tertiary team. They're smiling and nodding, so make that 18 months. Sorry, Linda, I didn't look at you then.
Okay. The next question, why exactly was the Contract Accountants business sold off? I think this was one of the partner businesses we acquired about six or seven years ago. It was three businesses, the bulk of which is the rest of Africa resourcing business that you see in the numbers. This was a little business that came along with it. Our sense was that this part of the business was never really going to scale up into anything meaningful. We felt that it, you know, while it was a nice little business, we don't, you know, at that kind of size, we don't believe it belongs in a listed company like ADvTECH. We've sold it back to our partners in the business.
It has a very small impact on the group. The return on capital invested for your schools is significantly higher than the other listed schools group. Is this a function of historic cost of the investment in land and building and higher priced models? Or are there other factors to explain the higher level of return?
Can't comment on other businesses. I think we're just, we're happy with where we are and the progress that we're making. I think would be the right answer on that one.
Yeah. I mean, I think that, you know, our utilization rates are high, our efficiencies are good. You know, we evaluate our businesses both on historic cost as per the balance sheet, but we also have a revaluation done every three years of our properties. Even stacked up against the valuation that we did about a year ago, our returns are still very acceptable. Yeah, I think as Roy says, we can manage our assets, and we're comfortable with where we are. Tertiary volumes have held up strongly. The understanding is that there is strong link between tertiary volumes and ability to improve income post-studying. Is this perception correct? If so, it's surprising that tertiary volumes have held up as economic means, ability to improve earnings capability must have deteriorated.
I think the answer is that it's probably even more direct than that. It's not so much about earnings, but it's about the prospects of a job are substantially enhanced if you have a tertiary qualification. Linda, I think you're familiar with the figure? [audio distortion] . Let's put that into perspective. If you only have a matric, your chances of getting a job are less than 60%. If you have a tertiary qualification, your chance of getting a job are reduced to 12%, less than not getting a job. If you have a degree. Certificate. It's clearly understood that getting a tertiary qualification is your best chance of securing employment.
Never mind about the return on that investment in a sense. It's simply, and you can imagine in a sense. I'm not sure that second part, but it is very well and very clearly understood that the way to getting a career or an opportunity to support yourself and your family is to get a tertiary qualification. I think that's why we believe it's gonna continue to the inherent underlying demand. Yeah
Matric means you have a 60% chance of not getting in.
The unemployment rate is around 63%, right? The highest youth unemployment in the world. If you have a degree, the unemployment rate, according to Stats SA, is 12.5% for people with a degree. For matric, I mean, I'm speaking under correction, but I think it's about 57%, and it scales down. If it goes to a diploma, it's in the 30%s, and as we cascade down.
Sorry. Yeah. I beg your pardon. Yeah. Okay.
Okay. Will ADvTECH start currency hedging to protect revenues from other African currencies? You know, are management thinking about this risk? I think we're always thinking about it. I mean, it's not always as easy as you may think, but I mean, our costs are by and large in the same currency as our revenues. From an income statement point of view, it's really the translation into the reporting currency. Obviously the assets, if those devalue, that also impacts on the balance sheet. You know, we always are looking at strategies and obviously one way would be to have liabilities in matching your assets currency. We looked at that.
Additionally, we are also trying to make our African operations fully self-sustainable and able to fund themselves. I think nearly 3 years now, we have not had to support them in any way. In fact, they hold significant cash reserves and mainly in U.S. dollars at the moment. I think it is something we are mindful of. I think also that, while at the moment the Kenyan shilling is devaluing, it is still at a better rate to the rand than when we acquired the assets. The pula and the dollar, our other two trading currencies, have all appreciated relative to the rand up to now. It's worked largely in our favor up to now, but obviously we do try and manage the risk.
I think the answer is we are acutely aware of that as an issue. Okay? We can't always offer a mitigating circumstance, but it is fundamental in terms of any of our decisions to invest. We will be mindful. As I say, I think the structure of our business is somewhat different to others. It is something that we are, you know, acutely aware of and will manage as best we can. Yeah.
Could you please unpack the tertiary revenue growth of 13% where, you know, learner numbers went up 4%? It looks like it's ahead of the average fee increase. Rosebank growing faster would imply sort of the mix being negative. Yeah. There's a gap there.
Yeah. There is obviously also a mix element in that. You can see the range of qualifications that we have. You know, from skills programs, vocational, higher certificates through degree programs, postgraduates, et cetera. There is a mix element in a sense, and I would suggest that there's probably, you know, a de-emphasis on higher certificates per se, and more into full undergraduate programs linked directly to what Linda said. Your chance of employment are substantially higher if you have a degree versus simply a higher certificate. There has been an element of shifting. You know, affordability, it's difficult and those people still pursuing degree programs or even postgraduate programs versus those at some of those lower points of higher certificates, et cetera. Okay.
Okay. In the schools, it looks like gross receivables are growing faster than top line. Could you please unpack that? Yes, it has grown at a marginally higher rate. I mean, it is a relatively small number, so the rand value is quite small. Total gross debt is, I think, was ZAR 166 million. So it's about ZAR 10-odd million higher on a like for like basis if you adjust for revenue compared to the prior year. It is a tough economic environment. So, you know, it has been challenging sometimes to collect, as you would expect, but we still believe we're on top of it. I think to some extent, the timing of the June school holiday also has an impact.
If the June holiday starts a little bit earlier, we tend to have slightly lower collections in June. Obviously, if it's later and the holiday runs more into July, we get a bit more collections. We've had good collections in July and August, so we're comfortable that it's there or thereabout. I think also, even though the book is slightly higher relative to the growth in revenue, the aging of the debt is also more favorable than in the prior year, which has allowed us to have a lower loss allowance against it. Further information on teacher churn and teacher salary inflation. I think we've spoken about the salaries and how much space to enhance student-teacher ratios. I think the next part we've actually dealt with that largely.
Okay.
It is really the teacher ratios and the churn.
Teacher churn, we monitor our turnover levels by brand as a key indicator and a sense of the operations and the staff. I think certainly in some cases, we've had quite a lot of. Probably among young teachers in their first appointments, and we tend to see that they actually change quite a lot, and more specifically. There certainly is. We're aware, I think, of some recruitment and emigration among teachers. We've actually had, or we have knowledge of specific recruitment companies coming to South Africa to recruit teachers specifically for the U.K., I think. In fact, it's one that we're aware of most recently. There is that element in a sense. On the other hand, I think it's important.
I think we're well-positioned, as I've mentioned to you. We're probably unique, is that we have educational faculties we're able to identify very early on, and we have specific programs between the schools and the tertiary business to actually identify teachers of high potential and high talent, which we can secure through bursaries and scholarships and bring them into our own situation. I think we're better positioned than most. The fact that our geographic reach is now quite broadened, we're finding a pool of really good talents in other geographies that we're able to pull into the system as well, and that's quite exciting. Yes, we do see levels of turnover for a variety of reasons. Again, we've covered off increases. We're looking at creative and innovative ways of remunerating. We wanna get away from just straight benchmark.
If I'm a teacher with 5 years of service, I get this. If I'm at 10 years of that. We're not really interested. We're interested in performance and academic delivery. And as I say, the involvement and commitment, and we are trying to reward through other mechanisms and look at that flexible component of pay as opposed to fixed cost. All in all, we're comfortable with the levels of turnover. It doesn't, you know, I'm not saying that it isn't no concern whatsoever. Getting the right staff, the right caliber into the right positions is foremost to the brand management teams. I think overall, we're very comfortable with our ability to manage and some of the mechanisms that we're bringing to try and ensure we've got the best caliber of teaching staff.
Okay. Just quickly on the immigration. Sort of how is the 999 of this year changed over the last three years? I think obviously it was lower during the COVID period, 2020, 2021. I mean, we then did see a bit of a spike, and now it's reduced again. I would say this is probably our first sort of normalized year in-
If I could actually say, but I think it's important to remember that when you look at our numbers, our enrollment growth numbers that have been consistent over the years, those are net of immigration figures. Yes, it is an issue. Yep, we're acutely aware that it's a discussion and a hot topic. The reality is there's still the vast majority of South Africans that are searching for quality education. At the end of the day, our enrollment numbers are net of those departures. I think, you know, it's in hand, we report it. It's not like it is really substantive and meaningful, and it is going to run the risk of seriously damaging the business. It's a factor that we measure and monitor, and we'll report on it when we have the latest stats.
How do learner numbers compare at June versus February? I think in our schools business, they are marginally up compared to February, which is a similar pattern that we've had over the last three years. It's a very similar pattern. On the tertiary, we do have a mid-year enrollment, but it's a relatively small part of our business. The mid-year enrollment has gone well, but as I say, it's not gonna make a meaningful difference to the overall performance of the tertiary in the current year. What are the disappointments to date, in your view? Is ADvTECH achieving a sustainable competitive advantage as a Pan-African education business?
Well, the fact that I'm coming to the end of my tenure, and there's so much more opportunity. No, I think we're making good progress on a variety of fronts. I really do. I think it is a very exciting place to be. I don't know. I'm looking around the room, and there are a lot of ADvTECH people here. Is there anything that particularly disappoints you? Not that they'd tell me, would they? You know. I think if you know, I did put up those sort of phases in the sense of where we've been, where we restructured, reorganized, put into place systems. You know, in a sense, we then optimized, and we've seen enhancements in performance. I think we're now moving into this area of serious competitive advantage.
There's three areas that I think are hugely exciting for us and I think provide enormous opportunity. Not so much a disappointment, but I suppose there's a warning flag that I always say comes with that, is that we have to make sure that those areas of competitive advantage in which we're investing truly deliver results for us because they can become areas where you constantly, "Oh, no. We're gonna get this benefit, and we're gonna have this investment," and we keep pouring money into them without getting the corresponding return. I think measuring the return that we get is critical. Okay. So I'm trying to think of a disappointment. I'm sorry. It's hard to think of disappointments when we've got these results. Frank wants to say something. Sorry. Have you got a microphone? Thanks. Yep. Have you an army there?
Roy, I'm very interested in this point, and I would like to suggest a couple of things that you could comment on in a very positive way. The first is that there is huge demand for education, we know, in Africa as a developing continent. Perhaps the real disappointment is the ability of families to be able to afford the kind of fees that make us sustainable. I think that is both a problem and an opportunity. You may perhaps have some interesting comments you'd like to make. Some of them, I'm sure, are under wraps and not for discussion.
The other observation would be that the regulatory and accreditation process, just the approval of ministries of education, who tend to be ultra-conservative and perhaps not very friendly or well-disposed towards an innovative, groundbreaking educational institution like ADvTECH, must be a disappointment for you in terms of the speed of rollout of institutions into the rest of Africa. Again, I think that represents an opportunity and an area to work on, but perhaps you'd like to comment on those too.
No, you should never get me. A lot of people at ADvTECH know that if you start me talking, I won't stop. I'm gonna try and be concise. The issue is that firstly, I think, yep, there is huge opportunity, and we're quite honestly, you know, we probably won't even be able to make a scratch into some of that if you look at where it is. We've got to be quite specific about where we go and what, but it's massive. We always say demand is not the problem, affordability is the issue. Having said that, a lot of the initiatives we're putting around trying to make it more efficient. I don't think we have a silver bullet that will actually solve the scale of large-scale quality education.
I think that's gonna be a battle. I do wanna say is that, yes, certainly in the South African context, it has been frustrating on occasions, the ability to register and accredit programs as fast as we would want. We balance that by understanding that, you know, there is an element of quality control, and so there does have to be that check and balance, if you like. We would like it to be more efficient than it currently is, and we think there's an opportunity there. I think it's always frustrating in terms of public-private partnerships. We do believe that South Africa has an education crisis, and that we're well-positioned to try and assist in resolving that crisis. We think we could certainly make some serious contribution in that area if there was a more constructive environment.
By the way, it's not necessarily the same across the continent. I can tell you that we have some really first-hand examples of where we have been welcomed in other geographies and recognized and acknowledged in terms of the programs that we offer and the status and that we have. Furthermore, we've also witnessed and seen some of the most amazing private education initiatives in areas where we're not allowed to at this point in time. I would tell you that we have seen some of the most phenomenal medical, dentistry, healthcare areas, specifically to name a couple, that are actually would open the eyes of South Africans in terms of how other countries on the continent are handling these issues, and that's exciting.
If we could take those lessons and bring them home, that would be fabulous, as well as being able to extend our own reach to the continent. Yeah. I hope I've addressed some of it. I think, you know, the problem is so big and the opportunity so large that it's unlikely we're gonna really scratch it. My good Lord, there's still huge opportunities and quite exciting things for us to look at. Okay.
Okay. Down to two questions. Since you appear to be de-gearing, should you not raise the dividend payout ratio?
Okay. It's something that I think the answer to this is that the board is debating and considering this all of the time. They're acutely aware of the position and how the business has performed. I think there is a prudent balance between acknowledging, recognizing in a sense that opportunity, but also the opportunities that exist for us still as a business. The board will apply their minds properly and address that issue. To date, I think this is a clear indication of how the business has performed.
On the final question, and as soon as I've asked it, we're gonna have to hand our microphones to somebody else because it's, is a bench as strong as the two of us.
Yes. Yeah. It is. I think that's actually one of the successes of ADvTECH, to be quite honest, is that if you look at our brand portfolio or our management structures in every area of the business, we have really high caliber. We put it up there as one of our strengths, is the resources and the investment that we have in people. I'm actually more than convinced that, the performance of ADvTECH is actually as a result of the people in the organization. That's really what has delivered a phenomenal performance and will continue to do so. Yeah, the answer is the bench is really good.
Good. That's all the questions that we have. Just hit refresh one more time.
No, don't refresh 'cause it.
All right. Okay. There is one last question.
One last question. No more refreshing.
Does the IFC stake and board position add value for the South African for the African plans?
I can say unequivocally and without a shadow of a doubt, yes. I think the IFC have been, in so many respects, a really good partner for us, and I think their contribution at the board has been welcomed and much appreciated. I think it's, yeah. It certainly does add value to ADvTECH. Yeah. Okay. I really didn't expect that many questions. Thank you for your patience. I hope it's been useful and thank you for joining us. Okay.