Stadio Holdings Limited (SDO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. It is my pleasure to welcome each and every one of you to Stadio's Annual General Meeting. My name is Vincent Maphai and I sit on the board of Stadio as Chair. I would also like to extend a special welcome to all executives and employees at large, to all members of the Board and to shareholders. South Africa is indeed a wonderful place, a country that knows how to keep all our heart rates going, ensuring that we stay on our toes. Pertinently, it is a country where huge -- where there is huge need and demand for education, a country where our future depends on the provision of quality education. I therefore stand before you today, the prime Chair of Stadio Holdings Group, a group that currently has over 46,000 students, a group that is making a direct impact on the lives of these 46,000 individuals with the residual impact being felt as far and wide by society as a whole. I don't need to remind you that 2023 was not without its challenges. And yet, the Stadio Group produced a solid set of results and continue to execute its strategy of widening access to quality higher education and becoming a higher education institute of choice. The Board saw the Group's contract lending strategy bearing fruit. As a result, the Board approved the construction of a new comprehensive campus in Durbanville, which will commence later in the year. We are creating a holistic offering for our students through the provision of wide breadth of affordable qualifications that range from higher certificates to doctorates with a huge focus on quality and reverence. Education has this transformative power to shape an individual's life and impact on future of our society. It is far more than just about knowledge. It provides hope. Thank you for making time to attend the AGM today. Today's AGM is conducted entirely by electronic means. We have found over time that electronic meetings have increased attendance, reduced costs, and provided a more convenient way for shareholders to participate in our AGM. Some housekeeping matters to familiarize you with how our meeting will be conducted this morning. All microphones have been muted, and you will only be able to hear from myself and other speakers. I will shortly proceed with the constitution of the meeting and presentation of the annual financial statements of the company, as well as the resolutions in the same order as set out in the notice of this Annual General Meeting. Upon registration, shareholders would have received the instructions of how to vote, how voting will be conducted on the electronic platform. The voting at this meeting will be conducted by poll. I will then hand over to Mr. Chris Vorster, CEO of Stadio Holdings, to take you through a short presentation. Following Chris' presentation, Dr. Vilakazi, the Chair of the Transformation, Social and Ethics Committee, will present feedback from the committee. Thereafter, we will then answer any questions which can only be submitted through the platform. Questions can be asked by selecting the Q&A icon in the platform and typing questions in the text box at the bottom of the screen. I will then direct the responses as appropriate. Please feel free to begin submitting your questions as we proceed through the meeting. Voting will then be closed, and Computershare, our shareholders, who have been appointed as scrutineers, will tally the votes. Finally, I will make the results of the vote available to you once the poll has been closed. These results will be posted on screen. Computershare, as scrutineers, have confirmed that we have a quorum present in meeting in the attendance or by proxy. And I therefore declare this to be a properly constituted Annual General Meeting of the shareholders of the company. On 30th April 2024, the Stadio Holdings Notice of Annual General Meeting was distributed to shareholders. This notice of AGM contained the audited financial -- summary financial statements for the year ended 31st December 2023, and as well as the reports of Directors, the Audit and Risk Committee and the Remuneration Report. Accordingly, the financial statements have been presented as required in terms of Company Act and Stadio Holdings Memorandum of Incorporation. The annual integrated report for the year ended in 31st December 2023 and audited financial statements of the group are available on the group's website or can be obtained from the company at its registered office, if required. The notice convening this Annual General Meeting was posted to shareholders on 30th April 2024, allowing sufficient time for members to produce the contents thereof. I therefore propose that the notice be taken as read. As previously mentioned, on registering for this Annual General Meeting, shareholders would have received instructions on how the voting will occur on the electronic platform. The voting will now be opened for all voting. We require your approval for the following ordinary decisions. To confirm Mr. Ishak Kula as an Executive Director, please record your voting -- your vote. [Voting]

Number two, to re-elect Dr. Chris Van Der Merwe, as a Non-Executive Director. Please record your vote. [Voting]

Thank you. Number three, to re-elect Mr. Nico De Waal as a Non-Executive Director. Please record your vote. [Voting]

Thank you. Number four, to reappoint Ms. Mathukana Mokoka as a member and Chairperson of the Audit and Risk Committee of the company. Please record your vote. [Voting]

Thank you. Number five, to reappoint Dr. Busisiwe Vilakazi as a member of the Audit and Risk Committee of the company. Please record your vote. [Voting]

Thank you. Number six, to reappoint Dr. Tom Brown as a member of the Audit and Risk Committee of the company. Please record your vote. [Voting]

Thank you. To reappoint PricewaterhouseCoopers Incorporated as the auditor. Please record your vote. [Voting]

Thank you. Following discussions with shareholders since issuing the notice of AGM, the Board has decided to withdraw Resolution #8, noting it is not the company's intention to issue shares for cash. Number 9, non-binding endorsement of Stadio Holdings' remuneration policy. Please record your vote. [Voting]

Thank you. Number 10. Yes, we have done that. Non-binding endorsement of Stadio Holdings' implementation report on the remuneration policy. Sorry about that. Please record your vote. [Voting]

Thank you. This brings us to the end of ordinary resolution. We will now proceed with special resolutions. Number one, remuneration of the Chairperson of the Board. Please record your vote. [Voting]

Number two, remuneration of members of the Board. Please record your vote. [Voting]

Thank you. Remuneration of Chairperson of the Audit and Risk Committee. Please record your vote. [Voting]

Thank you. Remuneration of members of the Audit and Risk Committee. Please record your vote. [Voting]

Thank you. Remuneration of Chairpersons of remuneration and nominations committee. Please record your vote. [Voting]

Remuneration of members of the remuneration and nominations committee. Please record your vote. [Voting]

Thank you. Remuneration of Chairperson of Transformation, Social and Ethics Committee. Please record your vote. [Voting]

Thank you. Remuneration of members of the Transformation, Social and Ethics Committee. Please record your vote. [Voting]

Thank you. General authority to provide intercompany financial assistance. Please record your vote. [Voting]

Thank you. General authority to provide financial assistance for the subscription for and/or the acquisition of shares in the company or related or interrelated company. Please record your vote. [Voting]

Thank you. General authority to repurchase shares by the company or its subsidiaries. Please record your vote. [Voting]

Thank you. This brings us to the end of special resolutions. I will now hand you over to the CEO, Mr. Chris Vorster, for his presentation. Over to you, Chris.

Thank you, Chair. Good morning, ladies and gentlemen, from my side, on this historic day as it is also the inauguration or should I say, the second inauguration of President, Cyril Ramaphosa, as President of our country, but this time as the leader of a new government of National Unity. A lot of excitement in our country currently in this regard. Ladies and gentlemen, may I also use this opportunity to welcome our 499 new Khulisa student shareholders to this their first AGM of Stadio Holdings. I trust Khulisa shareholders, that you will enjoy this experience with us this morning. And once again, welcome to you all. So the Stadio Holdings' purpose, ladies and gentlemen, is to empower the nation by widening access to quality higher education. We do this through our three distinct private higher education institutions or brands. These brands, including the Milpark Education, Stadio Higher Education and AFDA. Milpark, an institution that is establishing itself as a leader in online learning with the program focusing on accounting, banking, insurance, and financial industry. Our AFDA brand is our well renowned and an award-winning film school, which focus on the creative economies and offer their qualifications by way of contact learning. And then our third brand is our Stadio Higher Education brand, which is our comprehensive brand offering multi-schools, multi-faculties as well as multi-modes of delivery. Everything that we do at Stadio, ladies and gentlemen, is underpinned by our WWS, that's standing for the first W, for widening access, meaning giving more people access to quality higher education. The second W stands for alignment to the world of work, ensuring that our qualifications are relevant and that our graduates are sought after in the workplace. And then the S, standing for student centeredness, supporting our students to be successful with their studies. Looking back at the 2023 financial results, I think that we produced another solid set of results during 2023 and that we continue to create value for all our stakeholders. These results were presented during the end year results presentations in March, and we unpacked it in detail. So for this meeting, I will just give a high-level overview of the year-end results for 2023. Looking at student numbers, we saw an increase of 10% in student numbers, revenue increased by 16%. Adjusted EBITDA actually went down last year, minus 2% from 29% EBITDA margin in 2022 to 27% in 2023. Just to reiterate the reasons for that was mainly due to our growth in the loss allowance, increased from 7% to 9% of revenue. Profit after tax showing very good growth of 27% in 2023. Earnings per share, up by 26%. Core headline earnings, up by 19% from ZAR 0.207 to ZAR 0.246 in 2023. Core headline earnings, up 19% to ZAR 209 million. And then dividends per share moving in the right direction, up from ZAR 0.089 to ZAR 0.10 in 2023. Return on equity, also growing to -- from 10% to 12%. And then we continue to generate cash in the STADIO business. Cash from our operations, up from ZAR 341 million to ZAR 360 million being a 6% increase in net cash generated. If we look at our expense analysis, we will see that employee costs increased by 14%. This is in -- on the back of a 16% growth in revenue. We are happy with that. You can even see there a slight reduction in employee cost as a percentage of revenue. It went down from 42% in 2022 to 41% in 2023. And we still believe it's realistic to get this number to 40% of revenue going forward. Other operating expenses increased by 19%, but it is still -- it's 23% of our revenue cost -- revenue percentage. The main reason as already indicated, the biggest reason for this increase in operating expenses was mainly the increase in our loss allowance. Other notable indicators there was an increase in our software licensing fees, mainly due to exchange rate changes during the year as well as some increases in our marketing expenditure. We have a strong balance sheet, ladies and gentlemen. We have a very good cash position at -- during 2023. We had low gearing. Actually, at the end of the year, we had no gearing. So a very strong cash position. We have a debt facility of ZAR 100 million in place. We had to utilize that facility during January of this year to settle the acquisition of further shares in the Milpark business. I can report back that we've already settled the bulk of that facility, the outstanding ZAR 100 million, and we should settle that amount in full by the end of June this year. This puts us in a very strong position as a young business with a growth strategy, and it puts us in a position to really act on any opportunity that comes our way. Just very briefly looking back at our short history of 7 years. Stadio was established in 2017 when we unbundled from the Curro Group. We listed also in that year. During 2018 and '19, we acquired further brands as well as we've purchased land in both Centurion and Durbanville with the purpose of building campuses on those two sites. The two COVID years, 2020 to 2021 was all about consolidation in Stadio's history. We've really migrated four of the brands into one brand, and that then also saw the creation of the new Stadio Higher Education brand. During this period, we've made a lot of investment in our distance learning infrastructure as well as in our systems, processes and policies. We've applied for accreditation on quite a number of new programs. And we've also saw the accreditation of those applications starting to come through during 2021 and going forward. We've also launched in 2021, the Stadio Khulisa student share scheme. We're now in the '22/'26 period that we identify as our growth period. During this period, our focus is pretty much on optimizing our current campuses and staff. This is a big focus for us this year, as well as for next year, ensuring that we use our campuses optimally. We also saw in this period in 2022, our launching of our first comprehensive campus at Centurion in the Stadio Higher Education brand. We also introduced a few new schools to that institution, including the school of IT, the school of Architecture, then a new school in AFDA, the school of Creative Writing and soon then to come our new school of Engineering. Milpark moved away in this period from contact learning in becoming and repositioning itself as a leader in online learning. Construction also in this period will take place of our second comprehensive campus, that is the campus here in the Western Cape in Durbanville. We are planning for that construction to start around about September this year. And we are chasing that pre-listing target of 56,000 students by the end of 2026. I must say we're well on our way in achieving that pre-listing target that we've set ourselves. Looking beyond 2026, the focus will then move towards exploring new markets. It will also look at refining, continuing to refine our processes and technology. We will then move our intention in reaching the 100,000 student mark. And we also want to see growth in our return on equity of more than 20% and EBITDA margins of more than 30%. Looking at the future, we say that the demand for higher education continues to outweigh the supply, and private higher education institutions have a large role to play. If we look at private higher education in South Africa, ladies and gentlemen, we see that we contribute only 18% of the total higher education population. When we compare that with international standards, we see the international norm is more in the range of 33%. So still a lot of scope for private higher education institutions in South Africa. The Stadio Group is already 1 of the 10 largest higher education providers in the country with over 46,000 students coming primarily from South Africa. We are on track, as I already said, in achieving our 56,000 student target by 2026. Our strategy is clear. We want to accommodate 80% of our students by way of distance learning, and we will only create infrastructure to accommodate 20% of our students in the contact learning space. That means minimal capital investment required for sustainable growth going forward. Our growth strategy is built on these five pillars. The first pillar is accrediting of new in-demand programs. Currently, we have 87 accredited programs, with 37 programs in the pipeline of accreditation. I can also report that we see a much faster conversion rate of our applications. So we see accreditations coming through faster the last few months. Our second pillar of our growth strategy is built on taking programs to new sites of delivery as well as mode of delivery. It is not as easy as just to take it to a new site. It's a whole accreditation process for each of these programs. But what we mean by this is to take a program that's been accredited for campus A to take that program also to campus B and C, making all our campuses a comprehensive offering. And similar taking programs that's been accredited for distance learning, also to the contact learning space. Our third pillar is opening of new faculties and schools, as I already indicated. Architecture, IT, Creative Writing as well as Engineering are all new schools introduced over the last 2 years. And then the opening of new comprehensive campuses and optimization of current campuses. The big item here would be the opening of our new planned comprehensive campus in Durbanville here in the Western Cape. And the plan is to take new first years in on that campus in January 2026. Our fifth pillar for growth is that of exploring new geographical regions or new markets. I must say that is not really a focus at this stage, although we have our toes in the water. It is not a focus. However, we will always consider any opportunity that come our way in this regard. But there are also other exciting growth opportunities that comes through international as well as local partnerships that we are currently considering and spending a lot of time on. Looking at our new program growth, exciting just in this year, 2024, we've received 14 new program accreditations, which these programs, hopefully will all be offered during our 2025 academic year. Just a reminder, we go through exactly the same accreditation process as any of our public universities, meaning all our institutions as well as programs needs to be accredited by the Council Of Higher Education as well as SAICA. And then programs and institutions must also be registered by the Department of Higher Education and Training. In this slide, I think it is clear that Stadio is becoming the comprehensive institution we are aiming to be. If we look at all those academic schools, we can see that we are basically covering 90% of all the possible study options available in the higher education space. Our qualifications range, although from higher certificates on NQF Level 5, to diplomas, degrees, postgraduate degree, all the way up to doctorates at NQF Level 10. So we cover the full spectrum of higher education from Level 5 all the way up to Level 10. Academic quality and integrity remains our priority at Stadio. 8,103 students graduated across the group during our Autumn 2024 graduation ceremonies. Always a big highlight for the institution. Our Milpark Education's PGDA program once more achieved the highest pass rate of all distance learning institutions for the SAICA ITC board exams. AFDA celebrates its 30th year of operation with another year of multi-award-winning achievements, not just the institution, but also our alumni. And then also exciting news to share with our shareholders is that the STADIO Higher Education Graduation Employability Survey indicate 84% of our students were employed within 2 months after completing their qualifications, and that moves up to 90% within 9 months after completing their studies. So showing the relevance of our programs, and that our graduates are sought after in the world of work. We continue to roll out STADIO Khulisa Student Share Scheme, and I must report back that this is very well received by our students. And we believe that over time, this will create a very active and supportive alumni to the STADIO brand. We are continuing investing in university status. A lot of work and effort is going into this in positioning ourselves to apply for university status when this is becoming available for us, and the regulations allowing us to do so. We believe that we are making good progress, especially on the one item that is creating a bit of concern for us and that is in research. A lot of initiatives and a lot of progress is being made in this regard. Sports is being rolled out in STADIO, especially in the STADIO Higher Education brand. Our sports strategy focus on three levels. The first level is all about recreational sport for mass participation on our different campuses. The second level will focus on organized and more competitive support at club level, and then having a more professional approach to our third level of varsity cup participation. The STADIO Higher Education brand competed in the USSA's netball as well as Sevens Rugby last year, and we will continue to do so this year. The STADIO Seven scheme, this, Sabres, actually performed very well last year at the USSA's tournament. They won their division, and move -- and will move up to the first division this year for the 2024 tournament. And then also nice to report back, we had our first intercampus debate with the topic of Africanization last year between the different campuses, and that really created a lot of excitement at our different campuses. Ladies and gentlemen, we really believe the time is now right to build our Durbanville campus. We know that we delayed the construction of this campus for quite a period of time. But we really wanted to prove to ourselves that our strategy is sound and that our distance -- or that our contact learning student numbers are growing. And we have now reached a point where we have that comfort that the strategy is working, and we believe the time is right to go ahead with the construction of our new Durbanville campus. This campus will be our showroom here in the Western Cape, something that we desperately need. And it's also important to note that we've actually reached full capacity at our Bellville campus, and that we need to actually look for better and bigger facilities to accommodate our students here in the Western Cape. Phase 1 of the construction will start, as I've already said, around about September this year. It will cost -- the Phase 1 will come at a cost of approximately ZAR 220 million. This cost will be funded 50% by cash resources and then also 50% from a long-term debt that we will acquire. The Bellville campus is already a multi-school campus. What does that mean? We've already positioned the Bellville campus in such a way that it has a comprehensive offering. So when we open that campus or the Durbanville campus in 2026, we will open it with a whole variety of programs that we will transfer from the Bellville campus onto this new Durbanville campus. So a total different scenario to what happened in Centurion in 2022, when we opened that campus, we started there with only 4 to 5 programs. This time around, with the Durbanville campus, we will start with a whole range of qualifications with basically all our academic schools being represented on that campus. We really believe that we will open that campus with up to 1,000 students when we open in January 2026. Important to note that the construction of the Durbanville campus will not hinder our ability to continue paying out dividends to our shareholders. We are still well on track in achieving our pre-listing goal of 56,000 students by the end of 2026. We've reached the 46,508 student mark at the end of December 2023. To get to the 56,000 students, we need to grow the business at a 6% per annum to get to that number. So we are really well on track in getting to that number. Looking at our preliminary 2024 semester 1 student numbers, we see another solid set of growth there in the distance learning student numbers up from last year, 37,067 students to 40,017 students. That's an 8% growth. Our contact learning also showing 8% growth, up now to 6,283 students, bringing our total student growth for the first semester to 8%, very similar to last year this time. So we are confident that we will produce another solid set of financials for the 2024 academic year. Normally, we just give you a glimpse of the situation if we exclude the B2B business from our Milpark brand. If we exclude the B2B business in Milpark, we then see growth of 16% in our distance learning business and then overall growth of 15% in our total student numbers. So again, good growth so far for this first half of the year. Just important to note that we only report here on full time accredited or only accredited programs, and we exclude any short learning programs from our student number base. Something important or what I would like to highlight is the nice growth that we are starting to see in our contact learning space, that comprehensive campus in Centurion, where we now have comprehensive offering. We saw very good new student growth of more than 50% -- 52% student growth in new students on the Centurion campus. So that's very exciting. Looking forward to what is to come in the years ahead. In summary, ladies and gentlemen, I think we've continued to deliver over the last 7 years. We've met basically all of it. Let me say, most of the targets that we've set ourselves, if you look at those numbers. And we are very confident that we are building a first choice higher education institution and an institution with great business potential. 2024 is in full swing with a lot of opportunities, and we are already creating the infrastructure to accommodate 100,000 students for the future. We believe that is achievable, and we are working towards EBITDA margins of more than 30% and equity -- return on equity of more than 20% in the near future. So overall, very exciting and well positioned at this stage. Thank you, Chair. That is my presentation for this morning.

Thanks very much, Chris. Indeed a great story to share with our shareholders and our staff, and everyone. So we will now hand over to Dr. Vilakazi for the ESG feedback. Busi?

Thank you, Chair. Good morning, ladies and gentlemen. As Chair has indicated, my name is Busisiwe Vilakazi. My role this morning is to provide you with a brief overview of the work undertaken by the Transformation, Social and Ethics Committee of the Stadio Board. I will start just by -- happy to announce that at STADIO, we have actually approved and rolled out our ESG framework, which is what will be used to guide the work that we do in this space. And looking at the E of the ESG in terms of environmental elements, and starting with the energy, Stadio invested about ZAR 5 million last in 2023, with an additional ZAR 5 million to be spent in 2024 to install solar energy solution system. This is for two main reasons really: To minimize the impact of load shedding on the business operation as well as in an effort to try and green some of our campuses. And we've already seen that the energy use is down by 28%, and the expenditure is -- electricity expenditure is down by ZAR 3 million in 2023. On the water side, we are starting to look at alternative water solution at all campuses. This is through, one, to ensure that we start using water efficiently as a group and also to start, also minimizing the risk on business operation on already the water challenges we are seeing across the different municipalities where our campuses are allocated. And the business continue its focus on looking at how it can reduce its carbon footprint in its daily operation from ensuring that wherever possible meetings are held virtually as well as also to move some of the classes online, where possible and ensure we are not compromising the quality of education we provide to our students and as well as minimizing printing and some of the recycling activities that the group does. At Stadio, we are in a business of providing education and we understand the role that we can play in equipping our graduate with the necessary skills and knowledge to be able to tackle some of the challenges -- sustainable development challenges faced by our country as well as the world and also just equipping them with how to deal with the climate-related risk. And as I said, we are in the business of providing education. We do this by integrating in the curriculum, in the modules our student take as part of their courses, courses that deal with these issues as well as in terms of the community engagement projects undertaken by student as part of their courses. Next slide. And this is an example in terms of how the school -- the STADIO School of Fashion does it, how it integrates sustainability in the way, in part of the curriculum and how it educate students to think about fashion in a sustainable way in the entire value chain from the design all the way to manufacturing. As Chris has highlighted in his presentation, STADIO's main aim is to empower the nation by widening access to quality education and this speaks directly to the sustainable development goals of providing quality education. And I mean, for me our South African context, we know we see a chronic high unemployment rate of around -- hovering between 32% to 34%. And -- but we also tell us that when it comes to graduates, that unemployment rate sits just below 10%. This actually, it further proves the important role that STADIO plays -- can play in actually addressing some of the social economic challenges faced by the country by providing the young people of this country with the skill and the knowledge and the expertise to be able to go and succeed in the workforce. And we are also not blind to the challenging economic environment that our student and everybody in this kind of find themselves in and in trying to alleviate and minimize that impact. In 2023, STADIO spent about ZAR 44 million on bursaries, discounts and scholarships to actually assist our students. As in Chris' introduction when he welcomed the STADIO Khulisa Student shareholders, we are happy to announce that in 2023, 3,433 graduates were given access to their shares. And importantly, again, as I said, STADIO is in the business of providing education. The shares actually also come with three courses that enable our incoming shareholders to understand just the basics and fundamental of investing in for them to secure their financial futures. And we are also happy to announce that for the first time in 2023, STADIO, this report on the agenda pay gap, which sits at around 13%. And according to the research published, this is actually below the international average of 20%. And we remain committed as a group to ensure that we live to the equal work for equal pay principle. As a Board in the STADIO overall, we really understand, as Chris has indicated to that, we have such a critical role we play in providing quality and affordable higher education for individual, but we also need to do that while ensuring that we actually create value for all our stakeholders. And in one of the ways, and as mandated to the [indiscernible] we do is ensuring that we promote an ethical culture within the group. In doing this, in 2023, the group launched the Whistleblowing Hotline, and that was rolled out across the different businesses in 2023. And we're happy to report that there were no activities identified that were in breach of the ethics pledge or the group's code of conduct. And in closing, we really as a group, as I indicate, we understand the importance and that purpose led purpose that we have as a business of widening access, but we also understand that we need to create value for all our stakeholders in a sustainable way. And in doing that, we are committed to working and engaging with all the various stakeholders that including government to ensure that we continue to lead our people as a group. And with those words, I would like to thank everybody for your attention, and I will hand over back to Chair.

Thank you very much, Busi. Thank you. Well done. We will now respond to questions that have been sent through by shareholders. Just another reminder, questions can be asked by selecting a Q&A icon in the platform. Please submit any questions you may have, and we will address these. Following the questions, we will close the voting. Thank you.

Thank you, Chair. And I'll ask the first four questions together as they all relate to remuneration matters. And then I will ask our Chairperson, Ms. Mathukana Mokoka, if she can respond. So the first question is on the remuneration policy. Can the Chair of the Remco comment on the following shortcoming, the rem policy and rem implementation. There are no ESG metrics incorporated in the variable remuneration schemes and insufficient detail is provided on the individual performance measures for the STIs. The vesting of the LTI shares scheme awards began from 2 years onwards, which seems is too short-termed focus. Then the next one is there seems to be a lack of independence of the Board and diversity. The target of a minimum 60% black representation on the Board, thereby the company itself was not met. Can the Chair of the Nominations Committee by how and when this will be rectified? And then the next two also rem related, so I'll carry on asking those and then hand over to you Mathukana. Can you further disclose metrics used in the LTIs going forward? In addition, the remuneration makes no mention of a minimum shareholding requirements for the Executive Directors. May the Remco kindly clarify if there is a policy at STADIO at what percentages are? And then finally, while we greatly value the wealth of experience that more mature Non-Executive Directors bring to our company, we'd like to inquire if there is a designated retirement age for non-executives. Our understanding is industry standard is typically around 70 years of age. Thank you, Chair. Over to you, Mathukana.

Good morning, everyone. Apologies, Chair. Good morning, everyone, on the call. Thank you Kate and thank you, Chairperson. My name is Mathukana Mokoka. I'm the Chairperson of the Remuneration Committee, and will respond to the questions relating to this committee. Firstly, I just want to say that we do know to the questions relating to the disclosure, and I would like to assure you that we are committed to improving our disclosure for transparency and clarity, and we will take those comments into account going forward. I would the second -- the first question relating to the ESG metrics. Each of the Executive Directors have specific individual KPIs, which are aligned to their specific functions. For example, the COO has specific ESG targets linking to implementation of the solar projects across the campuses. Now going forward, we will definitely look to disclose further information on individual performances going forward so that it is clear. In terms of the question relating to the long-term share incentive scheme, this is a 5-year scheme. The first vesting is only after 2 years, and therefore, we believe the 5 years is long enough. There's also a question around the lack of independence on the Board. We do know the comment and the fact that we did not meet the targets, as we have set ourselves in terms of there is a diversity on the Board as well. This is a matter that the Nominations Committee is looking at to correct with immediate effect. And around the question of the retirement age, we have set eight categories in our Board diversity policy. However, we do not have a designated retirement age. We will definitely consider this going forward. But currently, we do not see this as an issue, but it's definitely something to take forward and discuss. In terms of the metrics on LTI, we currently see the share price as initial headroom for the LTI scheme and do not have further metrics, and the Remuneration Committee can discuss this again going forward. There is no minimum percentage holding required for executives. Thank you, Chair.

Thank you.

We then got questions before the AGM from [ Anthony Chad ], which I'm just going to read out. Some of them were addressed through Chris' presentation. The one that has, was not specifically addressed, how are the student receivables behaving given the distressed consumer? How is the book faring? And then the second question was any comment on immigration and semigration patterns to your student members? And the final one that I think wasn't covered is how is the current inflationary environment within tertiary education? Thank you, Chris.

Thank you, Kate. I think the first question you said was about collections. Am I correct? Yes?

Yes, about the student receivables.

Yes. So Anthony, looking at our receivables currently, our collections are, I think, fairly on track. We are comfortable with where we are currently, especially looking at our current student base. Obviously, the June and July months are our biggest collection months as this is the period where students write their exams, the midyear exam and they're then paying their fees to actually have access to their results. So June, July, big collection months for us at all the different institutions. Looking back at the prior year debt, I can report back that a lot of effort and initiatives is going in this regard. It's a bit early to report on the successes of that. But I think after the July, at our midyear presentations, we should have more clarity on how we are performing with that prior year debt. But really leaving no stones unturned to see improvements in that regard. The second question, Kate, actually if you can...

Can you comment on immigration and semigration pattern of our students?

Yes, semigration, not really, although we've seen a move in our AFDA brand, where we see lower growth in the Johannesburg -- on the Johannesburg campus with a nice increase in student growth at the Cape Town campus. But if we look at the group as a whole, it's really not having an impact on our numbers as such. And then I think the third question was regarding inflation and how that is affecting higher education in Stadio. I think our cost -- operational cost is well maintained. Our costs for -- employee cost is actually directly linked to inflation. We do see more of our operational costs. For example, municipal rates are growing faster than inflation. But with all our initiatives there in looking at alternative water supply as well as solar installations, we think we have the rising cost also under control. So overall, I think at this stage, not having a huge impact on our performance at this moment.

Thank you, Chris. Then Chair, we've got a question for Dr. Vilakazi. Can you kindly elaborate on how the group will be addressing 13% for the group to arrive at the equal work, equal pay target? And may if you can also expand on the reasons around the 13% gap. I think that is also then linked to the next question, which says may you also confirm the methodology used to determine the gender pay gaps. Thank you, Chair. Over to you, Busi.

Thank you, Kate. I mean, we -- on the first question around that the 13%, we are currently faring, as I indicated, better than industry, which is as where we are standing. And given that this is the first time we are measuring this, we are quite happy. And overall, obviously, as I said, it's the first time we're measuring it, we will be finding opportunities on how we can improve. And in measuring this, this is obviously based on the fact that our CEO being male, and he's at salary being higher, so the overall 13% that's the difference in that 13%, that's where it comes from. And then going into -- in terms of how we measure that, we should also explain -- clarify that 13% we take the total pay for males in the company and the total number of males and then we divide that by actually looking to the female doing the same for the female side. And we know with every methodology, and how you measure the shortcomings, and we will go forward as we find better ways of measuring, it will be improving and how we report and measure this current metric. Thank you, Chair.

I don't see any further questions coming through in the Q&A at this stage, Chair. So I think we will now close the Q&A. If anyone does have further questions, they are welcome to e-mail Investor Relations at stadio.co.za, but we will now close the Q&A and we will now hand over to Computershare to now do tally up the voting. Thank you, Chair. [Presentation]

Thank you. As you can see on the screen, Resolutions 1 upto 7 have been passed by requisite majority, and the same applies to 8 and 9 and 10, all have been passed by requisite majority. And you will notice that the special resolutions, all the way until 7, 8, 9 and 10, 11, in fact, all of them have been passed by requisite majority. Thank you very much. To conclude, I want to thank shareholders for your continued support and for attending our Annual General Meeting. We look forward to another exciting year ahead for the STADIO Group, and to see the continued impact our institution is having on South Africa as a whole. Just to add my -- some personal sentiments to what the CEO has said, we are delighted that the country is celebration, the installation of the second time President. The timing was unfortunate for us, and it was no doubt of insensitivity, that the meeting coincide with the installation. It was just at the time of training this meeting, we were not aware. We remain very loyal to the country and the leadership that they've been democratically elected. And if that has caused any inconvenience to our shareholders, in particular, we are apologize profusely for that and we hope you will be indulgent with you understanding. I now declare the meeting closed. And once again, thank you and enjoy the rest of the day.