Good morning, ladies and gentlemen, and welcome to Stadio Holdings 2023 financial results presentation. With me this morning to do our presentation is our new group CFO, Mr. Ishak Kula. I will start off with the presentation, doing a quick reflection on the 2023 academic year, also share the financial highlights. I will hand over to Ishak. Ishak will unpack the financial information in more detail, thereafter, Ishak will hand back to me. I will briefly have a look at our growth strategy and how we are tracking in that regard, also share some exciting information on our focus for 2024. At the end, we will open for a question and answer session. Welcome to our presentation. Just to quickly recap, Stadio Holdings, our purpose is to empower the nation by widening access to quality higher education.
We do this through our three distinct private higher education institutions. Being in the middle, Stadio Higher Education, our comprehensive institution offering multi-faculties as well as multi-mode, including distance learning and contact learning. On the left-hand side on our screen, we have Milpark Education, our true online institution, becoming a leader in the online space, focusing on the accounting, financial, and banking industry. We have our well-known and award-winning film school, AFDA. AFDA, a niche offering focusing on the creative economies and offering only contact learning. Looking back at the 2023 academic year, I would say that 2023 was an eventful and very interesting year for Stadio. We produced a solid set of financial results in a tough economic environment.
As you all know, we've seen increases in interest rates, fuel prices, load shedding continued, all of this meant that the South African consumer is really under pressure. We've managed in this tough economic times to continue growing our student numbers. In the first semester, student numbers went up by 9%, in the second half of the year, semester two, we've grown student numbers by 10%. In 2023, we also saw the appointment of three strong heads of campuses, new heads of campuses at our Centurion campus, our Waterfall campus, as well as at our Bellville campus. 2023 also saw our culture and values being embedded, we see a general staff wellness on the rise in the Stadio institutions. Exciting for the year was definitely our participation in competitive sport for the first time.
We participated in two University Sport South Africa events, also known as USSA events, where we participated in netball as well as in rugby sevens. That will continue going forward, we should also expand into more sport codes as the years go on. On the other side of the coin, we also saw our loss allowance that increased during this 2023 period. It is clear to us that as a South African consumer, our students are also under pressure. What is clear to us is that students now also take longer to pay, there is still the willingness to settle their accounts. Although the debt allowance is on the rise, it's increasing, it is still well within what is happening in our sector. When we compare ourselves with competitors, we are actually doing well in this regard.
That being said, as management, we are not happy with how we've managed this over the last few years. With the implementation of our new systems in the business, we had some issues with the integration of the system, and we strongly believe that with the refinement of all of this, we would be more effective in managing our loss allowances going forward. Not overly concerned about the loss allowance at this stage. Exciting, we really do believe that the demand for higher education continues to grow and that our students consider their education to be Not a discretionary spend, but more a necessary spend. There we go. A business, ladies and gentlemen, is all about people. Our people are critical to our success and everything that we achieve, all our accomplishments at Stadio is the result of all of our people doing their part.
Unfortunately, I can't include everybody in this slide, just allow me the opportunity to quickly thank our executive team for another solid set of results. On the top left-hand, we have our Chief Operating Officer, Johann Human. In the middle, our Chief Academic Officer, Divya Singh. And then our new CFO, Mr. Ishak Kula. And then bottom right, also a big thank you goes out to Samara Totaram, our former CFO who left the institution in December 2023. And then a big word of thanks also to our two energetic and experienced CEOs of the underlining institutions, Teresa Passchier at AFDA, and then Andrew Horsfall at Milpark. Let's get to the financial highlights. Just very briefly, I'll start off with student numbers first.
As already said, student numbers increased in the first semester by 9%, and then in the second semester, we've grown the student numbers by 10% and we finished the year on 46,508 students. Revenue, exciting, increased by 16% to ZAR 1.4 billion. Unfortunately, EBITDA margin down from 29% last year to 28%. The main contributor to this was the increase in our loss allowance. Ishak will definitely unpack that in more detail in his presentation. The target there still remain the 30%, 30% plus, and we really believe that is achievable in our business. Profit after tax, up by 27%. Earnings per share up 26%. Core headline earnings up 19% to ZAR 209 million, and then core headline earnings per share also up 19%. For especially for shareholders, dividends per share up 12% from ZAR 0.089 last year to ZAR 0.10 this year.
Exciting also to share this information, return on equity up by 18% to 11.7%. If one look at return on equity, we see over the last few years that the institution is really managing to grow the return on equity, and it will remain a focus area for Stadio Holdings going forward. At this stage, I would now gladly hand over to our new group CFO, Mr. Ishak Kula, who joined us earlier this year in January. In this short period of time, Ishak already made a valuable contribution. Ishak, firstly, from my side, welcome to you, to your first results presentation, and we know it will go well. Thank you. Over to you, Ishak.
Thank you very much, Chris. Hello to the investor community. I'm very proud to be part of the Stadio Holdings group. I look forward to unpacking some of the results with you, as Chris had alluded to. Going to this Okay. Apologies. Just waiting for a clicker to move. Okay. Thank you, Chris, for that good opening words. As Chris also alluded to, we continue to position the business to become the first-choice institution. I think joining the group from the outside in, it was very good and pleasing to see that that remains our strategy. All the decisions that we take underpins this philosophy. Consumers remain under pressure. I think we're not oblivious to that fact. Affordability remains a key challenge in our environment as students generally take longer to pay. We can see it in our numbers.
Consequentially, when I unpack it, the increase in overall loss allowance for the period. Our key capital projects for the period included our new Krugersdorp campus. It was operational for the full year. We had invested in that campus in the prior year. In the current year, we also invested into solar projects at our Waterfall campus. We're looking forward to the expansion in Muiskraal and Centurion, which is planned for 2024. In our Durbanville campus, which Chris will expand on a bit later, we are excited that we're going to be venturing on this journey. We've dedicated and allocated ZAR 220 million for the first phase. Focus and development remains core and at the heart of what we do. We continue to invest ZAR 15 million on curriculum development with further investments planned for the year ahead. Some big transactions during the financial year.
We acquired a further interest in the Milpark Education subsidiary. We acquired 14.6% of the equity interest in December 2023. That was settled partially in cash. In a facility which we used in January 2024 of ZAR 100 million to acquire the shares from Brimstone. At the end of the year, we held 83.1% of the shares in Milpark Education. Just to give a bit more detail on that, we acquired 1.8% in December from one of the non-controlling shareholders for ZAR 15.4 million. A further 12.8% shares from Brimstone Investment Corporation for an amount of ZAR 117.5 million, which we used the facility for in January 2024, to pay that down. In January 2024, we also acquired a further 0.7% equity interest from one of the non-controlling shareholders for the further ZAR 6.1 million, which was funded out of existing cash resources.
Ladies and gentlemen, during the year, we also issued 3.2 million Stadio Holdings shares, to settle our share obligation in the share incentive trust. We also subsequently, to counter the dilutionary impact of this transaction, repurchased and canceled 3.2 million shares between the periods July and December 2023. We also embarked on purchasing a further 4.8 million shares for ZAR 22 million in the share incentive trust to settle future obligations for our long-term incentive scheme. The board also approved a repurchase program to the equivalent of ZAR 15 million for shares that we will continue to acquire and set aside to counter any dilution, which will then allow us to continue to settle our future obligations in terms of the share incentive trust. During the year, we also settled the owner's contract in Milpark Education for our Melville lease.
The negotiations there went incredibly well, which allowed us to de-recognize the provision we had raised in the prior year, which impacted our results, and we released ZAR 3.8 million pre-tax and non-controlling interest. Ladies and gentlemen, a key focus for me and Stadio in the Stadio Holdings group is to continue to focus on our operations and our processes to make sure we continue to be sleek and agile to allow us better insight and visibility into our business so that it allows us to make good and rightful decisions as we build this business. Chris alluded to it, but we implemented our ERP system in our Krugersdorp business. Positive, although we had some integration challenges initially, I think we're very confident that we're now at a point where the majority of the system issues are bedded down.
Also pleasing to see, we declared a dividend of ZAR 0.10 per share, up 12% from the prior year's dividend of ZAR 0.089 per share. An overview of our total student numbers. Semester 1, ladies and gentlemen, we grew our student numbers by 9% for the period June 2022 to June 2023, taking our student base to 42,874. We have also, if we exclude our cyclical business-to-business student base, it's exciting growth of 14% and probably more encouraging is to see the new student number growth of 15%, which is really exciting to see. Okay. What are these? Okay. Clicker is Our semester 2 student numbers, as Chris had also alluded to, grew by 10% from December 2022 to December 2023 to 46,508 students. Apologies. Again, if we exclude the cyclical business-to-business student base, our growth is 17%.
Again, encouraging to see our new student number growth of 15%. Breaking down the student numbers between the contact learning modes of delivery and distance modes of delivery. Ladies and gentlemen, the contact learning mode of delivery, very pleasing to see that we grew 3% in the period to June and 2% for the period year-on-year to December. Very encouraging to see that the new student growth that we take into 2024 is encouraging. Reminder to our audience that we had seen poor enrollments in the prior years impacting our rollover student base. This was also impacted by the Milpark Education's transition away from contact learning and just generally site extensions and growth and new qualifications coming through and contributing to our growth.
In our distance learning mode of delivery, very encouraging numbers there, taking a growth of 11% for the first semester year-on-year growth and 10% in the second semester. Looking at our student numbers, again, excluding the cyclical business-to-business, the student base has grown by 19% for semester 1 and 21% for semester 2. These, ladies and gentlemen, we're proud to say we're still the largest distance learning provider outside of a public university, and we continue to move in the right direction, offering the right programs at the right price points, allowing us very good growth. The business-to-business is still under pressure, but it has shown improvement from semester 2, which has also allowed the distance learning growth therefore to be higher. Ladies and gentlemen, on a revenue growth, we've continued to grow our revenue by 16% from last year from ZAR 1.214 billion to ZAR 1.414 billion.
It's encouraging to see that much of our growth comes from the distance learning and contact learning students, but in particular, growth in our distance learning students. We've also grown our registration fees and enrollment fees by 30%, largely attributable to growth in our new student base. Ladies and gentlemen, on EBITDA and our adjusted EBITDA. For our audience, just to highlight, our adjusted EBITDA, we make adjustments because we believe that number is better reflective of the underlying performance. In the current year, we've excluded the gain on the onerous lease settlement we had, which I alluded to earlier, of ZAR 3.8 million, and some tax penalties of ZAR 1.2 million, taking our EBITDA from ZAR 391 for the full year to an adjusted EBITDA of ZAR 388 million, and hence a 27% adjusted EBITDA margin for the period.
Our EBITDA margins reduced to 28% as we continue to invest in people and systems and processes across our business to drive efficiencies. As we continue to put down the right programs and continue to grow our student base, we expect our cost base to increase. As the business continues to grow, you basically grow into your operating and employee cost base as new programs are offered. What impacted our EBITDA margins this period is increased marketing and licensing costs just in general as new students are onboarded. Inevitably, you spend quite a bit of money on licensing costs and so on, as well as marketing costs. We've had intentional and deliberate focus on making sure we advertise appropriately to get the required visibility in the marketplace.
Ladies and gentlemen, we also cannot ignore that our loss allowance has increased for the period overall, but it's also in the prior year, we had an unutilized loss provision that we did not have a repeat of in the 2023 results, which also impacted our EBITDA, adjusted EBITDA and EBITDA margins. Just to illustrate the EBITDA movement, we've moved from ZAR 351 million in December 2022 to ZAR 391 million, giving us an 11% growth. That can be unpacked as follows. We've had some prescribed debt, which contributed to our other income for the period of ZAR 5 million, largely pertaining to monies we'd received three years and longer ago, which we there in the current year started to release to the income statement as we've applied general prescription. Then the loss allowance prior saving.
There was an unutilized loss allowance at the end of 2022 that was reversed, which we did not have the benefit for again in 2023, which contributed a reduction of 2% to our growth in overall growth in EBITDA. We had an additional ZAR 35 million loss allowance in the current period, which I'll unpack, in the slides to come. On the EBITDA movement, we've had the onerous contract settlement of ZAR 4 million contributing to our EBITDA profit for the period, and the rest we ascribe to organic growth, which is still very pleasing to see in tough economic conditions. Apologies. There we go. Ladies and gentlemen, just to give you a synopsis of our margin analysis.
We essentially compare December 2023 to December 2022. We basically give you an illustration of our employee costs as a percentage of revenue, which is one of our big costs in our business. Very pleasing to see that our employee cost margin as a percentage of revenue improved from 42% in the prior year to 41%, albeit we've had very good growth, and we've continued to resource our business given the underlying programs that we've deployed. It's still good to see that our employee cost margins are within acceptable parameters, and we'll continue to try and manage our cost base within these parameters. Our other operating costs have increased by 19%, still within the operating expense as a percentage of revenue, 23% from last year to this year.
Further, ladies and gentlemen, the loss allowance, which we've alluded to and I'll unpack, increased from ZAR 83 million to ZAR 132 million, which is a 58% increase, which has therefore moved our loss allowance as a percentage of revenue from 7% to 9%. Okay. To get to our trade receivables and loss allowance, I think what I want to highlight is there's definitely an increase in the debtors book, which we believe is impacted by economic environment impacting our students' affordability to pay us and consumers continuing to be under pressure. Our increase in our debtors book was 27% for the period under review. I want to highlight to the investor community that as part of our widening access philosophy, we are allowing more students to re-register with arrear balances, allowing students therefore to pay over longer periods.
We've had a reduction in upfront deposits that we've charged to allow students access to the university or to Stadio. We've also required students to pay their fees up to a point to ensure that we don't allow students to get transcripts and academic results unless their accounts are up to date, which is critical as we draw a line in the sand when it comes to that. As a result, we've given these decisions that we've taken, we have seen an increase in our debtors book, which has therefore resulted in an increase in our loss allowance. What I want to in particular highlight, our loss allowance coverage year on year, although it's remained similar, we have seen an increase in semester one and prior academic year balances, which we believe we've adequately provided for and quite conservatively so.
As alluded to, our risk is concentrated in our debtors book relating to the prior academic year, which accounts for 14% of our book, which we've taken a very conservative provision against. We've upped, the provision has increased from 94% to 95%, ensuring that our prior academic year, which we believe is the most risky aspect in our business, to be largely provided for. Therefore, we've taken this conservative view, giving recognition to the fact that students take longer to pay. We've provided for 42% of the current year book. We therefore exclude the prior year book, which accounts for 8.4% of the loss allowance margin based on current year revenue. Our historic bad debt write-off ratio of ±8% is in line.
We continue to focus on our debtors collection and managing our credit risk as we embark and implement new processes to allow us better insight and visibility on our student base, which allow us to continue to make swift and good decisions to ensure that we don't expose the business to undue risk. Ladies and gentlemen, our profit or loss for the period increased by 27%, largely impacted by the underlying organic growth in EBITDA for the period. We've also had more interest income in the current year. We've had a net interest income versus the prior period net interest expense, which also contributed to our profit after tax growth for the period. We also had a positive impact of the change in tax rate from 28% to 27%.
In the prior year, we also had some impairments that we did not see in the current year. It was largely negatively impacted by, as we alluded to, our increased loss allowance for the period and the cost of some strategic initiatives as we continue to invest in new program development, which leads to an increase in some of our operating expense bases. EPS and headline earnings per share. On the left, our earnings per share grew from ZAR 0.1950 to ZAR 0.2450, up 26%, which largely filtered through to headline earnings per share growing from ZAR 0.20 to ZAR 0.2450, up 23% for the period. Just to highlight again, our growth in EPS and HEPS follows the growth in profit after tax for the period, we've had some movements in shares.
As I've mentioned earlier, we issued 3.2 million shares in April 2023 to meet our share incentive obligations, whilst also subsequently we repurchased these 3.2 million shares for ZAR 15 million during the period July to December to counter the impact of the dilution. Our core headline earnings has grown from ZAR 176 million to ZAR 209 million, up 19%, and our core headline earnings per share has therefore grown from ZAR 0.2070 to ZAR 0.2460, also up 19%. Ladies and gentlemen, what has contributed to our core headline earnings measure, which we believe is a true measure based on the underlying performance. If we exclude once-off adjustments, we've grown from ZAR 176 million to ZAR 209 million, which is up 19%, and it can be ascribed as follows: the change in the tax rate of ZAR 7 million. Remember, we are in a deferred tax asset position at the end of 2022.
Because we had a net deferred tax asset, the rate changed from 28% to 27%, saw us take a charge last year of ZAR 7 million, which has not been repeated in the current year. We've had the release of the prescribed debt of ZAR 4 million. We had the additional loss allowance and the prior loss allowance provision that was not carried forward in the current year, each contributing ZAR 4 million and ZAR 26 million to our core headline earnings movement in the period. As mentioned earlier, we also had a net interest receivable, interest income in the period of ZAR 8 million, contributing 5% to our core headline earnings movement for the period, the remainder being underpinned by a ZAR 44 million organic growth of 25%. On our statement of financial position, very strong and continues to be very resilient.
We invested ZAR 59 million on capital expenditure in the period. As alluded to earlier, solar projects of ZAR 5 million. We continue to invest in software of ZAR 8 million during the period. Curriculum development, we spent ZAR 15 million, on some building projects, ZAR 4 million, and our recurring CapEx base of ZAR 27 million, giving us cash on hand at the end of the year of ZAR 130 million, with a gearing ratio of 6% and 0% if you exclude the impact of the IFRS 16 lease liabilities. I want to highlight that we utilized the ZAR 100 million facility in January 2024, which is, if you contemplate this post-year-end, still a very low gearing in our book, in our balance sheet. Our cash flow from operations. We continue to generate very good cash.
We've moved from ZAR 341 million in the prior, adjusted to ZAR 360 million in the current year. We compare that to our cash generated from operations and our normalized EBITDA, and we've continued to generate 93% of our cash. Free cash flow, there is recurring CapEx of, has moved from ZAR 241 million last year to ZAR 217 million, really as a result of the interest and recurring CapEx in the current year. Capital invested, ladies and gentlemen, the acquisition in 2023 are related to the acquisition of our non-controlling interest, as alluded to earlier, of ZAR 15 million. We also continue to spend on infrastructure and capital assets of ZAR 44 million, and again, continuing to invest in systems that allows us to be agile and allows us to manage our businesses better in the current year, particularly in Milpark.
We've had some good program development of ZAR 15 million in the current year, taking our total capital invested to ZAR 74 million in the year and to ZAR 2.2 billion since inception of Stadio. How did we spend our cash? We opened the year with ZAR 148 million. We generated ZAR 256 million in the current year from operating activities. We paid ZAR 10 million taxes in relation to 2022. We had a cutoff when we paid our 2023 taxes. A portion of that was paid in January 2024, January 2023. Apologies. Therefore, I've split this out so you can get an appreciation of how we paid our taxes and of which ZAR 10 million came from 2022.
We spent ZAR 15 million on curriculum development and ZAR 8 million on software development and building projects, as alluded to earlier, of ZAR eight and a half million, and our general recurring CapEx of ZAR 28.4 million. We've had some net share repurchases with the issue of shares of ZAR 3.2 million and ZAR 36 million respectively. We've also had a significant increase in our lease liabilities. As alluded to earlier, we paid ZAR 62.2 million for the year towards our lease liabilities, which includes about a ZAR 27 million settlement of our lease liability in Melville, and therefore you've seen a significant increase in that lease liability payments in the current period. We've paid ZAR 93 million worth of dividends to our shareholders, and we've also acquired the non-controlling interest of ZAR 50 million in December, taking our cash position to a very pleasing ZAR 130 million for the period.
What can you look forward to in 2024? Continued curriculum and intangibles development. We continue to spend a significant amount in this area that underpins our growth strategy. We'll have some solar projects that we're going to be spending some money on in 2024. Very excitingly, our Durbanville property of ZAR 220 million that will be funded 50% debt and 50% from existing cash resources without hampering our ability to pay dividends at the current levels. We have also acquired the Milpark non-controlling interest in January 2024 of ZAR 6 million. That was also funded out of existing cash resources. Ladies and gentlemen, dividend declaration. We continue to generate good cash flows.
As alluded to previously, we aim to return 85% of free cash flows over time, of course, having regard to capital projects, and our strategic growth plans that we've got in place, particularly in Durbanville, in 2024, leading into 2025. We are pleased to announce a final dividend of ZAR 0.10 per share, up 12% from the ZAR 0.089 per share in the prior year. You can see the dividend declaration, that the last day to trade cum dividend is Tuesday, the 16th of April. Trading ex-dividend commences on Wednesday, 17th of April. Record date of Friday, the 19th of April, with payment being done on the 22nd of April. Ladies and gentlemen, this brings me close to the end of my presentation. I just want to highlight a very encouraging slide to you. As we continue to see our student numbers grow and our revenue numbers grow.
We are very delighted and believe that we're sitting on the right trajectory and that our growth path is clear, and very encouraging results overall, trickling down all the way from EBITDA to our core headline earnings, headline earnings per share, dividends per share. Pleasing to see our return on equity being double digits at 12%. I will now hand over to Chris Vorster to talk about the growth strategy.
Thank you, Ishak. Ladies and gentlemen, if we look back at our pre-listing statement, we're still well on track in reaching our 56,000 student target before or by 2026. To get there after our student growth in 2023, where we finished at 46,508 students, we actually need to grow by 6% per annum, which we feel is really achievable, and we should get to that 56,000 student target before the end of 2026. Our growth strategy build on these five pillars. Firstly, accrediting of new in-demand programs. We are tracking very well in this regard. We now have 87 accredited programs in the group, and there are still quite a pipeline of new in-demand programs in the accreditation and registration process. Taking programs to new sites of delivery. Typically, in the past, we had single schools and single faculty buildings and campuses.
We are now bringing more product to those different campuses. The opening of new faculties or, as we call it, academic schools. In 2023, we saw the opening of our schools of humanities as well as architecture. The fourth pillar there, comprehensive campus as well as optimization of our existing campuses. A very big focus also for the 2024 year, ensuring that we use our campuses optimally and that we are really also profit-orientated and focused on those different campuses. The last leg there is that of exploring new geographical regions. That is not high on the priority list at this stage. We believe, as management, that we should be 100% happy with our processes and new systems, that all the integration glitches are sorted out before we will aggressively then look at external markets.
We will always be open to explore other growth opportunities through exciting international as well as local partnership opportunities. Higher education requires patience. We always remember or refer to it here at Stadio that the wheels of higher education are turning slowly. We believe that we have nice momentum at this stage. To date, ladies and gentlemen, we've really invested in our processes and systems. A lot of investment went into new technology that drive both academic and operational excellence. Just to recap, we've invested in the Canvas learning system, which I can report back is very well-received by our students. As one introduce new technologies in your business, obviously, that also comes with challenges, as I already referred to.
We are confident that we are close to getting to the point where we've sorted out all these integration issues in our business, and that really is very exciting. Just to illustrate the point that one needs patience in higher education, I took there at the bottom, an illustration of what happens to get a typical new program to become profitable. One starts off with the program, doing your new program research. With that comes research costs. After that, there is the quality assurance cost that one occur. Appointment of new staff, which is a requirement by the regulator. Before you can start offering a new program, you must already indicate or prove that you have staff in place. There, the lengthy accreditation processes, as you are all now aware, can take up to 36 months.
It's also very important on when we receive the accreditation of a new program. If it happens, for example, at the end of the year, let's say November, December, it leaves the institution with very little time then to market for the January intake. It then often happens that that program will only be offered in the next academic year. When one open a new program, you start off with only first years, although you basically occur the most of the operational cost in that first year. It's only after three years where you have a full cohort of first, second and third year students on that new program, where you really start to see the efficiencies coming through. Program growth. If we look at it, as already indicated, 87 qualifications accredited in the group.
With all these new programs coming in, I also just want to make it very clear that we continuously analyze our current offerings to ensure that they are viable. We always look at programs that are not performing well, that are substandard or outdated, and we will then teach out and rationalize those programs and replace them with new in-demand programs. In 2023, we introduced exciting new programs on all three of the different brands, 15 offerings in total, that will also come in in 2024, spread between the three brands, Stadio Higher Education, Milpark, as well as AFDA. Exciting to also note is we will soon be introducing our new School of Engineering. I'm glad then also today to say that our patience is now starting to be rewarded. I've included two examples there.
When we look at the distance learning, there is a typical example of a new distance learning program that we've introduced in 2023. New students increased by 73% year to date. Total students for that program year to date is up 225%. It shows you as the program matured, you get first, second and third year students coming in. Those efficiencies and growth really starts to show. In our contact learning space, which is very exciting for us, we see our comprehensive Centurion campus showing very good growth in new student numbers. Our new student numbers year to date up 83% on that campus. Total student number growth on that campus, 66%. When we compare it with where we finished the first semester last year, we're already up 47% on that campus.
Registration is still ongoing, these numbers are still subject to change up to the end of March. I think you will all agree these new student numbers really look very exciting. With that being said, and us now having concrete proof that our contact learning strategy is also working and really showing good growth, we believe it is now time to build our Bellville comprehensive campus. Previously, we believed in our contact learning strategy, and we knew that it will show growth over time, but we didn't have any concrete evidence of that to our investors as well as to our board. What is now currently happening at our bigger campuses, for example, the Centurion comprehensive campus, we're very excited and we really believe it is now the right time to go ahead with the construction of that Bellville campus.
The Bellville campus, as it is currently, is also reaching its capacity, and it actually cannot accommodate the strategy of a comprehensive campus due to the size of that specific campus. We also believe that the current Bellville campus is not really supporting the Stadio brand and what we want to portray. We really need a comprehensive showcase campus here in the Western Cape. The campus will not just be used for contact learning. It will also serve a double purpose where we will also serve our distance learning support center from that campus. How will we build this new campus? We will build it in phases. We want to start with the construction this year in 2024. As Ishak already indicated, phase 1 will come at a cost of ZAR 220 million, and for that, we would be able to accommodate around 2,700 students in phase 1 on the Durbanville campus.
The construction of phase one will be funded by way of 50% of our cash resources and then 50% long-term debt. As Ishak also indicated already that we will continue with our current dividend payouts and although we will go ahead with this construction during 2024. The Bellville campus students currently on that campus, we expect to relocate those students to the new campus around about June 2025, when we will then have our occupational certificates. For a first new intake, would be then 2026 on that campus. How does the Durbanville campus differ from what we've done at Centurion? We've learned a lot of lessons, when we opened that first comprehensive campus. If I can just rewind a few years, we started our first comprehensive campus with only a handful of programs and with only to around about 380 students.
This time around, we will have multi schools, multi programs available to offer when opening this new Durbanville campus. We will also open the campus with approximately 1,000 students. That makes the whole business case of this campus a total different scenario altogether. We're very excited about it, ladies and gentlemen, and we really believe that we can make a great success of this new comprehensive campus, in the Western Cape. In summary, I then want to say that the pieces are coming together for growth acceleration. We're very happy where we stand currently with our program mix. We have a whole range of exciting in-demand programs. Our processes and systems, we've done a lot of investment in that regard. I've indicated that we're in the process of refining all these new technology that we've brought into the business and that we are getting the hold of the integration.
We are very excited that soon we will really see a much improved student experience as well as efficiencies starting to come through. Quality at Stadio is non-negotiable. We strive to have academic excellence at all our institutions. A quality is what guarantees sustainability in this industry. It's very important for us to always make sure that the main thing remains the main thing, and that is to offer a quality higher education product at all our campuses. Lastly, there, comprehensiveness. We still do not want to open campuses at every town. We really believe in the strategy of comprehensive campuses for the Stadio Higher Education brand specifically, where we can have large numbers of students. It is scalable and then also over time would be really profitable as well.
2024 will be a year full of challenges, we're sure, especially in a year or in a election year. For us, with big numbers of students coming from the South African Police Service as well as other government departments, that will come with its own set of challenges. Our team is ready, we're excited, and we are ready for these challenges coming our way in 2024. We believe that we are building a very solid institution, a very solid business, well-positioned, and we really believe that we can grow this business in the future. In future get to that 100,000 students that we think is really achievable. With that, ladies and gentlemen, thank you very much for the opportunity to do this presentation. We will now gladly open for questions.
Thank you, Chris. Our first question is from Zuks. Morning, Zuks. He said, "Provision coverage on debtors relating to the current year is down year-on-year from 44% to 42%. Could you please help us understand this decline given that students are taking longer to pay and upfront deposits are reduced?
Thank you, Kate. I'll answer that. Zuks, what we've seen specifically is, and I've alluded to it in my slides, we've essentially broken down our debtors book in semester 1, semester 2, and prior academic years. What we're definitely seeing is as debt ages, you have a higher propensity of default and therefore, higher levels of provision. What you will see is our semester 1 debt, we've also increased that loss allowance provision coverage from about 55% to 57%, and I have unpacked the prior academic year, which we've increased from 94% to 95%.
However, on the semester 2 debt, which we term as fresher debt, what we've seen is that aging of that debt is slightly more fresher or younger when compared to the prior year, and we've seen some good subsequent receipts on that book in particular, and therefore the slightly lower loss allowance provision against that portion of the book.
Thanks, Ishak. Another one from Zuks. How does the acquisition in Brimstone's stake in Milpark impact the BEE credentials of Milpark and the group overall, and its ability to do B2B business?
I think I'll take that one. I think, it would not really impact our overall groups, B-BBEE ownership. However, Milpark, which is currently at level 2, they will move down a level. In that regard, we really know that Milpark is committed to transformation, and they have quite a range of things that they are going to focus on to ensure that they keep those levels. We will also, in future, again, look at possible other BEE deals going forward.
Thank you, Chris. A question from David. Apologies if you've already mentioned this, can you please talk to the 2024 enrollment growth?
David, at this stage, the enrollments are still in full swing. Our registrations for the 2024 academic year only closes at the end of March. At this stage, I can just say with confidence we are tracking ahead on a year-to-year or a year-on-year comparison. If we look back at where we were this time last year, we're showing growth in both distance and contact learning. The final numbers are still not available, and numbers can still change up to the end of the registration period.
Just tagging on to that, can you talk to what sort of increase we are planning for this year in terms of fees?
Our fees, we had inflation-related increases. It varies across programs. Some of the programs had very little, 1%-2% increases, but in other programs we had up to a 6% and a 6.5% increase. It varies among different programs. I think on average it should be between 5%-6% increase for the 2024 year.
Thank you, Chris. Some questions from Anthony Clark. I think a few were covered already in the presentation.
Employee costs have gone up +14% to ZAR 586 million, and expenses are 18% higher to ZAR 390 million. Can you unpack these? What is your guidance for 2024?
Thank you, Kate. Thank you for the question, Anthony. I think in particular, based on that one slide we had also presented, we believe that the current levels are where we want to continue to see our employment cost as a percentage of revenue. Around about the 41%-42% is our benchmark, Anthony.
Thanks, Ishak. In terms of your program mix, I'm fully aware that the Department of Higher Education is in a bit of struggling at the moment. Can you update us as to how the ongoing accreditation of your qualifications are going? As this has been a thorn in your side for years due to the slowness of the department.
Yes. Thank you, Anthony. I would say at this point, we are actually happy with the accreditations that's really coming through very well over the last few months. For 2024, as I've indicated in the presentation already, 15 new accreditations that came through. These programs would now be offered in 2025. Yes, generally, I would say that we are quite happy and that we see our accreditations really coming through well now.
Thank you, Chris. A question from Taylor: Which fields of studies and faculties are the most popular and fast-growing? What type of educational fields accounts for the bulk of your income?
We're doing very well with our biggest schools, which include business and commerce. We're seeing very nice growth, especially in the BCom fields, even at Milpark with their new BCom that they've introduced, as well as Stadio Higher Education. Education is doing very well, one of our biggest schools. We see good growth in law as well as in our BA in Creative Arts at AFDA. It is actually the big growth is spread over all three institutions, more so commerce, law, education, and the creative economies.
Thank you, Chris. Going back to the 2024 student numbers. A question from Maureen saying, "Although final numbers are not available, what sort of growth numbers and % at Stadio you have disclosed as previous?
It's very difficult to say exactly where we are currently, as it is changing overnight as I speak. I can just say with confidence that we are tracking ahead on where we were last year this time. With contact learning, I can say that we are already above 10% growth in Stadio Higher Education in comparing with where we finished last year. The final numbers of our other contact learning institution, for example, AFDA, that is not in yet. It is very difficult for me to give you solid, concrete answers at this stage.
Thanks, Chris. The next question is from Shelton. He's got three. I'm going to read them all out first. What is the composition of your DL students split between short learning programs and full degree, diploma, higher certificate students? Second one is, can you comment on the relative performance between the different brands and their outlook? Thirdly, what is the capacity utilization at the Centurion campus, and is it breakeven yet?
Firstly, on the distance learning composition. Just to be very clear, we do not include any of our short learning programs in our numbers. Our numbers only reflect our accredited and registered programs. The shorter learning programs is also a very small part of our business. We just record the numbers of our registered and accredited programs. The bulk of students are in the undergraduate fields of study, more so in your B degrees. Exciting for us, we see very nice uptake also in our post-graduate enrollments, especially on our master's programs, which is very exciting. Also exciting is the fact that our doctorate programs are really attracting a lot of interest, and we see a lot of students coming over from traditional public universities to complete their doctorate at Stadio. That's all very exciting. On the performance of the brands.
In the past, we haven't reflected on specific, in this regard. I can say that, as a holdings group, we are actually very satisfied with the performance of all the brands. As indicated, Milpark is really establishing themselves very well in the accounting and financial industry with their online offerings. We see nice growth in that regard. We've actually phased out all the contact learning at Milpark, so the numbers are showing slower growth due to the fact that we don't have any contact learning new students at Milpark. But we are substituting that with nice growth on the online space. AFDA is a real solid performer for Stadio over the years, showing good margins. Obviously, with such a high price product, and being a mature institution, we see lower growth in AFDA. But exciting for this year, it still shows growth, which is encouraging.
The big growth will definitely come from the Stadio Higher Education brand, where we have this whole focus on comprehensiveness, and we've really invested in the distance learning platform and giving a comprehensive offering for students to register for a variety of programs.
Thanks, Chris. The last question was, what's the capacity utilization at Centurion? Just give me a second. When do you expect to break even?
Yeah, Kate, Happy to answer that. Pleasing to see that we expect Centurion to be at break-even levels for EBITDA in 2024, which was also a firm basis of what Chris had mentioned earlier, that we believe the time is now to build. We've got a good base case to work from, and we therefore believe that this will be a good decision for the Stadio Group. I'll answer that, Kate.
Thanks, Ishak. The question from Unati. Given the under-pressure consumer, probably well into 2025, how do you see bad debts and the quantum of receivables going forward? What has the post-results experience been like?
Thank you, Kate. I'll answer that. We definitely expect that the current levels of provisioning is where it's going to be at. I think the consumer remains under pressure.
A big sticky point is the interest rate, which we know government or there's indications that the interest rates, we should start seeing rate cuts towards the latter part of 2024. Given this big unknown, we've taken a very prudent approach and believe that the current levels are what is most sustainable given the growth in the underlying business. As alluded to earlier, we've also seen slightly better collections on our more recent debt post year-end, which is what we also used to help us inform our provision at the end of 2023.
Thanks, Ishak. A question from Talia: Will you be able to create a medical school, not necessarily for doctors, but medical-related fields?
At this stage, that is not priority for us. However, we haven't closed the book on a medical school. We just feel at this stage we have other priorities, to really see significant growth at our different campuses. Definitely there is still work going on behind the scenes in this regard, but it is not a main priority at this point.
Thanks. Chris, a question from Nick. Firstly, can you talk about the competitive environment and your ability to take market share? Secondly, the 6% increase in fees seems very low to me. Can you comment on this?
Let's start with the thinking behind the fees. As our whole purpose is to widen access, to give more people the opportunity to access higher education, and by keeping fees affordable, that is living up to what we want to achieve and what we stand for. We are happy with that increase. We do believe that our ability to attract more students to a specific campus and to a specific program will give us the efficiencies and the profitability that we seek in offering those programs. The second half of the question.
Can you talk about the competitive environment and our ability to take market share?
Yes, it is a competitive environment. I think Stadio's whole strategy is to establish ourselves in the market as a first-choice institution. How do we do that? We must make sure, firstly, that we offer quality education. If I talk about quality here, I include that your program should be relevant and should be aligned with the world of work. By ensuring that, your graduates would be highly in demand and that would support your potential growth going forward. It is a competitive environment that we are operating in. Looking at our fellow private institutions, competitors first, we think that we are well-positioned, especially on our quality offerings, our student experience, what we have to offer, as well as at price point. We've positioned ourselves to really also compete with your well-known and bigger public institutions.
We think that we are well-positioned and that we are really in a position to really compete with both public as well as private competitors and international competitors.
Thanks, Chris. A follow-on question to that all around fees is, can you please let us know where the business you are passing the lower fee increases and where you're able to pass the certain 6.5% fee increases?
For the 2024 year, the lower increases were predominantly on our School of Policing & Law Enforcement. Where, in that school, we saw only, I think, if I'm not mistaken, 2%-3% increases between the various programs. The bigger increases was more at our programs such as law and commerce.
Thanks, Chris. There's a question from Unati and Nick, both around similar topics. What is the expected further phases at Durbanville, in terms of CapEx, student numbers, and years of completion, when effectively do you expect to break even? How does this compare to Centurion?
Yes, in phase 2 of the Durbanville campus, we look at, over time, an additional approximately ZAR 19 million spend, required. That will push up our capacity at that campus over 4,000 students, and it will also put us in the position to move our head office onto the campus, which would bring additional efficiencies. Comparing with Centurion campus, as I already indicated, when we opened that campus, we opened only with a handful of programs and with a small number of students. This time around, it's a different scenario. Both these campuses would be similar, accommodating more than 4,000 students going forward. This will also then put us in a position together with all our contact learning campuses in our AFDA brand to have capacity for approximately 20,000 students. That is in our strategy.
If we want to get to 100,000 students, it would also always be, we will accommodate 80% of that 100,000 students in the distance mode of delivery. By building these or this extra comprehensive campus, we would now be at a point where we will accommodate the 20,000 students. For the contact learning, meaning that we will then meet the 100,000 student number.
Thank you, Chris. To Ishak. How much will be invested in the Durbanville campus? What EBITDA is budgeted for?
Thank you, Kate. We've obviously already acquired the land, about ZAR 50 million. That money was already spent historically, and it's in our balance sheet. As alluded to earlier, we expect to see breakeven EBITDA after year three, depending on student growth. As Chris alluded to earlier, I think the big difference between Durbanville and Centurion is if we can get 1,000 students at the time of opening, it will make a significant difference in terms of the profitability of that project. Again, payback period, it's way into the future, but we're quite optimistic and believe between six or seven years is likely given the current growth trajectory.
Thanks, Ishak. Another question from Richard: How will Stadio manage BEE once the lock-in expires at the end of 2024?
Yes, management is currently investigating various options. As I've already also indicated, we look at other possible BEE arrangements. It's a fact that we would not like to go backwards in this regard, we would look at other possibilities going forward.
Thank you, Chris. I do not see any further questions. If anyone does have further questions, you're welcome to email investorelations@stadio.co.za and we will get back to you. Thanks, Chris. Back to you.
Thank you, everybody. That is our presentation then. We'll catch up soon again. Thank you very much.
Thank you, everybody.