Johnnic bets on the value of an education

Johannesburg, 29 Aug 2001

Johnnic Communications yesterday took a formal step into the education market with the launch of

Johnnic Learning

, a R100 million business aimed at providing learning services that span the entire education market.

Neil Jacobsohn, Johnnic e-Ventures CEO, said the learning business will draw on the strengths of the company in the content, technology and distribution fields. Johnnic Learning will be a division of Johnnic e-Ventures.

Johnnic Learning brings together four separate educational companies under one umbrella including two new acquisitions. The four firms are the Learning Channel Campus, in which Johnnic e-Ventures has acquired a 56.4% stake; eDegree, already 51% owned by Johnnic; Lead Train, a start-up within the Johnnic stable; and a 51% acquisition into Effect, an educational television production company.

"Johnnic Learning will concentrate on providing cost-effective multimedia educational content, teaching materials and interactive learning to the entire SA marketplace," said Jacobsohn. "Johnnic Learning will not, however, move into the ownership of bricks-and-mortar learning institutions. We will not stray into an area where we cannot add value."

Fathima Dada, who has been appointed executive chairman of Johnnic Learning, said that while "education is a key factor in development and growth ... there is a need to be flexible in the delivery of education". This ability to be flexible, she said, "will be the key to the business success of Johnnic Learning. Johnnic can deliver solutions from low-tech, such as print, to hi-tech, such as the Internet and broadcast."

Jacobsohn said Johnnic is already a significant player in the education market through its print and broadcast publications. He added that Johnnic e-Ventures had investigated more than 100 Internet-related opportunities and identified two workable markets in business and education.

Jacobsohn said the educational offerings from Johnnic Learning span the entire range of the market from early childhood development services, through to adult basic education and training and tertiary education through eDegree.

Operations director Anthony Ward said revenues for Johnnic Learning are expected to exceed R100 million within 18 months and is budgeted to deliver attributable net profit after tax to Johnnic e-Ventures within 18 months. Cash return on investment in excess of 20% is expected within two years.

Jacobsohn said Johnnic Learning will play a major role in "pushing shine-through value to other sections of the company". Other divisions set to benefit from Johnnic Learning include Exclusive Books, Career Junction and the Sunday Times` Read Right project.

According to Jacobsohn, Johnnic e-Ventures worked closely with government and will ensure the courses offered by Johnnic Learning are accredited by the relevant educational authorities.

Ward noted that the biggest revenue source for Johnnic Learning would be the government, with the SABC, universities and technikons, and corporates providing the bulk of the remaining revenue.

Revenue flows, said Ward, would be derived from training contracts and fees, tender revenues, commissions and consultancy fees, among others.

In a related announcement, MTN has unveiled the MTN Connectivity Project. The project, which includes a R21 million investment in education, will see a number of schools equipped with computers as well as network and Internet facilities. Irene Charnley, M-Cell commercial director, said the project will focus on the government`s national strategy for maths, science and technology education, and will connect clusters of schools in KwaZulu-Natal, Mpumalanga and the Northern Province.