A sound strategy is key to increased growth. (Image: iStock) No matter how good you are or how hard you work, the wrong strategy will lead to poor outcomes. The strategy is set by the most senior executives in corporations, so just a handful of people make the decisions that will determine the wealth outcomes for thousands more. Naturally, this is how corporate execs try to justify their enormous earnings.
In the past week, we saw a few examples on the JSE of companies that are reaping the rewards of sound strategies. Whether in the form of a full earnings release, a trading statement or a capital markets day, there are opportunities to learn about how great companies keep driving growth.
Advtech: premium education works
Education is a difficult business. If you’re trying to be affordable for a broad audience, it starts to look more like a social enterprise and less like a traditional business.
Curro learnt this the hard way, although their original intention wasn’t to go the social enterprise route. If the schools had been filled as expected, they would probably have been able to achieve their dream. Alas, thanks to a combination of emigration and pressure on middle-class South Africans, things didn’t work out.
At Advtech, they focus on premium schooling. This lifts it out of the competitive bloodbath of more affordable schools, as the wealthiest consumers in South Africa aren’t particularly price-sensitive when it comes to their kids.
If an operating margin of 20.9% in the Schools South Africa segment impresses you (and it should), then brace yourself for the Schools Rest of Africa performance.
By focusing on international schools in Africa that target the expat market and the richest local families, Advtech is generating an operating margin of 33.7% in that market. This is a perfect example of how lucrative the right strategy can be.
The tertiary division is also a strong performer, with an operating margin of 26.8% in the year ended December 2025. The job market seems to get tougher each year, creating a natural underpin of demand for further education.
The resourcing division is the blemish in the group. Instead of enjoying the competitive advantages of premium education, this business is on the wrong side of trends like employers and employees finding each other with ease, thanks to LinkedIn. When looking at Advtech, it’s clear that one division is not like the others — both in terms of the business model and the underlying economics. Resourcing’s operating margin has been between 6.3% and 6.6% over the past four years.
Thankfully, the resourcing division is only a small part of Advtech’s story. The rest of the group is excellent from a strategic perspective.
PSG Financial Services: distribution works
When we talk about “distribution” in the context of PSG Financial Services, we are referring to how the business gets out there and sells its products. Instead of sitting back with a few airport ads and hoping that assets will come to them, the PSG model is to have an army of advisers who sit with clients and attract assets through providing advice.
It’s an effective model, as net inflows are a critical source of long-term growth. Instead of being reliant purely on markets going up, PSG Financial Services is growing the asset base every year through inflows.
In the year ended February 2026, headline earnings per share will be up by between 32% and 35%. This is clearly an excellent result.
But here’s the real kicker: if you strip out their performance fees, the growth is between 24% and 27%. Put differently, more than two-thirds of growth is attributed to an increase in overall assets, rather than the outperformance of those assets vs benchmarks. This speaks directly to the benefit of having strong distribution.
Standard Bank: Africa works (at the moment)
Even a sound strategy still needs the macroeconomics to be favourable. Standard Bank laid out its plans for the entire group at a capital markets day last week. There’s one theme that comes through across the divisions: the importance of Africa.
One of the best ways to see the strategic focus areas is to look at the Corporate and Investment Banking (CIB) presentation. This demonstrates the core drivers of growth in Africa, as the CIB bankers need to position themselves at the centre of the action.
Energy and infrastructure investment comes through strongly, creating multiple opportunities for Standard Bank to get involved in funding and structuring these deals.
Another important theme is trade corridors, with the presentation highlighting opportunities with trading partners like the EU, China and the Gulf Cooperation Council (GCC). It may surprise you to learn that the expected medium-term growth rate for trade with the GCC is similar to expectations for Africa’s activity with China. Effective trade requires access to capital and foreign exchange, so there’s plenty of meat on the bone for Standard Bank.
The third theme is the critical minerals value chain, specifically in copper and cobalt. This requires specialist funding solutions, as well as commodity hedging and other services.
Standard Bank takes it a step further by differentiating between its “core” markets and its “scale and grow” markets. The former can grow revenue by high single digits per year, while the latter can achieve low double-digit growth.
Here’s perhaps the biggest surprise of all: South Africa is described as a scale and growth market. It’s not the worst time to be sitting at the tip of Africa, that’s for sure.
Let’s hope that the macroeconomic story remains favourable for the continent. By avoiding being drawn into an East vs West geopolitical story, Africa has the opportunity to unlock growth with trading partners across the world. DM