Evolve lifts 1H profit 11%, wants to add up to 20 centres in 2017

Monday 21st November 2016

Evolve Education Group, the childcare centre operator, lifted first-half profit by 11 percent as it looks to increase its centre numbers over the next two years.

Net profit rose to $12.5 million in the six months ended Sept. 30, from $11.3 million a year earlier, as revenue increased 9 percent to $76.4 million, the Auckland-based company said in a statement.

Evolve contracted five new early childhood education (ECE) centres in the first half has contracted a further eight since that date, the company said. While the first-half results include an element of these acquisitions, the majority of the increase in earnings will be reported over the coming 12 months, it said.

The company is on track to add between 15 and 20 centres in 2017. Its has 119 centres as of today, up from 84 at the time of its 2014 initial public offering. It has $14.5 million of acquisition funding it hasn't used yet, in place for growth in the 2018 financial year, and two developments contracted and expected to start trading in that year, while further new centre opportunities are "being evaluated."

Evolve's revenue from ECE centres rose 12 percent to $63.1 million in the first half, while earnings from home-based ECE dropped 3 percent to $12.7 million. Occupancy of the original 84 centres rose 1 percentage point to 85 percent in the first half.

The company will pay a final dividend of 2.5 cents a share, up from 2.38 cents per share for the previous equivalent first-half fully imputed.The record date is Dec. 6 and the payment date Dec. 21.

Evolve shares rose 5 percent to $1.05 and have dropped 2 percent this year. They sold in the IPO at $1 apiece.

BusinessDesk.co.nz

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