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ADvTECH YEAR END RESULTS SHOW STRONG GROWTH Monday 14 March 2005 PRESS RELEASE ADvTECH LIMITED (Incorporated in the Republic of South Africa) Registration number: 1990/001119/06 Share code: ADH ISIN: ZAE 000031035 ADvTECH YEAR END RESULTS SHOW STRONG GROWTH ADvTECH Limited, the education, recruitment and human resources group, today announced strong results for the year ended 31 December 2004. * Solid academic achievements * Headline earnings per share increased by 37% * Free operating cash flow per share increased by 28% * Compound annual growth rate of 48% since 2001 in fully diluted HEPS * Net gearing down to 14% Commenting on the results, ADvTECH CEO, Frank Thompson, said: `We are extremely pleased with an excellent result that entrenches our performance record and lays the base for continued progress. The strength of these results is a reflection of good strategic progress in all areas of the Group. Our growth strategy continues to deliver, resulting in a new wave of investment in educational infrastructure which creates a secure, quality platform for continued growth in learner enrolment, academic achievement and a sustainable financial performance.` The Group reported a 27% increase in operating profit to R56 million (2003: R44 million), an increase of 37% in headline earnings per share to 12.0 cents (2003: 8.8 cents) and a 28% increase in operational cash flow before capex per share to 24 cents (2003: 19 cents). The debt to equity ratio was reduced to 14% (2003: 37%) and compound annual growth (CAGR) in fully diluted headline earnings per share since 2001 is 48%. Notwithstanding the increasing cash outlay of R21.4 million on new infrastructure (2003: R10.9 million), average borrowings during the year were R15 million compared to R35 million at year end. As a result of lower borrowings, reduced interest rates and a reimbursement of interest from SARS, the interest expense decreased to R0.4 million (2003: R10.9 million). The effective tax rate for the year was 20%. The Education division continues to generate a compelling record of sustained growth. Revenue for continuing operations increased by 19% to R487 million (2003: R408 million), operating profit increased by 17% to R97 million (2003: R83 million) and enrolments increased by 19% to 38 000. `Our investment of R42 million in new investment projects has been vindicated with capacity in the Tertiary division increasing by approximately 3 000 learners and additional teaching accommodation for a total of 400 learners in the Schools division,` said Thompson. The Resourcing division increased revenue by 15% to R68 million (2003: R59 million), operating profit grew by 70% to R10 million (2003: R6 million) and there was a 36% increase in placements. Commenting on the operational success of the Resourcing division, Thompson said: `Our Resourcing division had particularly strong results thanks to the solid performance from the Recruitment business. The combined effects of a new, successful management team, consolidation of certain business units and enhanced focus on the various target markets has solidified our position as a leading recruitment business and has driven divisional performance.` Looking ahead, the Group indicated improved headline earnings and operating cash flows for the next reporting period. Thompson said: `Both the Education and Resourcing divisions are now in a promising growth phase. The positive performance of the South African economy has increased demand for well-qualified, and motivated people. This in turn increases new job opportunities and demand for the quality education offered by the Group.` In line with declared strategy of distributing 30-40% of available earnings each year, the Board has proposed a capital distribution out of share premium of 4.5 cents a share - well up on the I cent dividend of last year. -ENDS- For further information contact: ADvTECH Frank Thompson 011 886 5100/ 011 348 0179 Brunswick 011 268 5750 Taryn Proksch 083 273 1301 Rob Pinker 083 326 7794
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