Friday 16th August 2019
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Evolve Education's biggest shareholder will take over the day-to-day running of the early childcare education operator in 10 days after chief executive Roseanne Graham handed in her notice.
Chris Scott, who founded the Australian early childhood education firm G8 Education, acquired a 19 percent stake in Evolve last year and joined the Kiwi firm's board in November alongside former G8 offsider Chris Sacre. They've been leading a $25 million expansion into Australia and today the board appointed Scott as managing director and Sacre as Australian country manager after accepting Graham's resignation.
Graham had been with the company for 13 months and will hand over the reins on Aug. 26. Through that period she developed a three-year turnaround plan, which involved raising $63.5 million of new capital to repay ASB Bank and fund the Australian foray. The board has started looking for a New Zealand country manager.
Acting chair Norah Barlow said the board and new leadership will update shareholders on the plan's progress at next month's annual meeting. She has previously indicated she won't stand for re-election.
Separately, independent director Grainne Troute will retire from the board, and the search for a new chair will be expanded to add another independent director.
Evolve is rebuilding the business after it struggled with declining enrolments, high staff turnover and flat Ministry of Education Funding. That prompted it to stop buying properties last year and sell its Porse In-Home Childcare and Au Pair Link businesses.
It listed in late 2014, raising $132.3 million in an initial public offering, and was a roll-up of several childcare businesses by Greg Kern and Russell Daly of Queensland-based Kern Group.
The shares rose 4.7 percent to 11.2 cents in early afternoon trading, but are still down 20 percent so far this year. Scott owns about 19 percent of the company, which is worth $104 million.
Scott helped found G8 Education in 2010, which was valued at one stage at A$2 billion. However, the Australian childcare was among those that grew too quickly and contributed to an oversupply of centres in 2017, from which it's still recovering.
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