AdvTech boss quits firm after dispute with board
ADVTECH chief executive Leslie Maasdorp had left the local private-schools company seven months after his appointment, he said yesterday, due to undisclosed differences with the board.
“I’m hugely disappointed that I’m not able to continue to see it through and build the business,” Maasdorp said. “The board and I have had to part ways. I’m unable to provide any detail of the nature of the differences.”
Maasdorp was made AdvTech chief executive in August after four years as chairman and oversaw the R450 million acquisition of confidential, AdvTech said.
Maasdorp will be replaced on an interim basis by Frank Thompson, his predecessor.
South Africa’s education system was ranked the fifthworst among 144 countries in a survey by the World Economic Forum last year, increasing the attraction of private schooling for those who can afford it. The school pass rate for final-year students fell for the first time in five years in 2014 after changes to the curriculum.
AdvTech was considering funding options for further growth, including a rights issue, Thompson said. Curro Holdings, a rival developer of private schools, said last month it would raise R1.44 billion to build new institutions and explore potential acquisitions.
“Clearly, and I wasn’t there, there’s differences of opinion about the detail of implementation of his role as chief executive and he made a decision to move on – he was not pushed,” Thompson said about Maasdorp’s departure. The board and the ex-chief executive were in broad agreement about strategy, he said.
AdvTech net income gained 7.3 percent to R167.1m in 2014, the company said. Sales increased 9 percent to R1.9bn, while the company raised the full-year dividend 2 percent to 2 cents a share. The stock gained 0.3 percent to R9.05 as of 11.40am in Johannesburg, valuing the company at R3.8 bn. It closed 1.11 percent lower at R8.92.
Thompson, who led AdvTech for 12 years before his 2014 retirement, said the company had delayed the publication of its full-year earnings while the board and Maasdorp agreed to a settlement.
He was asked on Friday to return and would probably remain for a period of months while he helped hire a replacement, he said. He declined to comment on how long the differences between Maasdorp and the board had existed.
AdvTech might be an acquisition target for Laureate International Universities, the Sunday Times newspaper reported, without saying where it had gotten the information.
AdvTech had not been approached about a takeover, Thompson said. – Bloomberg Bishop said South Africa’s inflation outlook would probably have deteriorated this year from the Reserve Bank’s perspective – it forecast 3.8 percent year on year for 2015 at its January MPC meeting.
The Reserve Bank was likely to revise its consumer price index inflation forecast to above 4 percent year on year as the rand oil price had risen and petrol prices were set to climb by around R2.50 a litre by end April, she added.
Peter Attard Montalto, an analyst at London-based Nomura International, said the conditions looked right for a pause in interest rates as headline inflation was low and so real rates were temporarily higher; the Reserve Bank was happy with an orderly weakening of the rand; and the second round effects or more severe core pressures were emerging, but not particularly strongly yet.
“The MPC will also look at the fact that the rand has remained stable against the euro, even as it weakened against the dollar. Therefore, we see no rush and there have been no shock outflows by foreigners from the local market.”
Bidvest Bank said yesterday that it continued to see the rand as highly fragile and susceptible to correction from weak levels previously.
“Overall, we continue to view the rand as highly fragile and susceptible to greater depreciation in months ahead as the prospect of Fed rate hikes remains on the table.”
Bidvest said it had readily expressed its view that part of the rand’s fundamental vulnerability had been brought about by the Reserve Bank’s interest rates, which were too low.
“The bank will likely feel comfortable in leaving rates on hold this week, but is expected to be forced into additional hikes further into the year.”
The rand firmed yesterday, and was bid at R11.9221 against the dollar at 5pm, having opened at R12.07.