Wednesday 18th September 2019
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New directors at Evolve Education were forced to their feet as shareholders demanded information from the childcare firm’s new management.
But there was little forthcoming at today’s annual meeting from the new executives of the beleaguered NZX-listed childcare company, which recently traded at 11.2 cents a share after listing at $1 in 2014.
In May, Evolve reported underlying earnings before interest, tax, depreciation and amortisation of $13.3 million in the year ended March 31, down from $21.6 million in the prior year, a 38 percent plunge.
Today, departing chair Norah Barlow gave a brief presentation during which she labelled the latest results - despite a turnaround plan - “disappointing.”
When it became evident no presentation had been prepared by the new management, shareholder Jenny Miller dubbed the event a “pseudo-ASM.”
“I am shocked - we were expecting some direction on where we were going,” she said.
Barlow explained that shareholders must wait until new management had completed a review of the New Zealand business, which would be presented at the end of November.
“I know it is not quite right for now, but in some ways this is more appropriate for the new team,” Barlow added.
From tomorrow, the NZX-listed childcare group’s board will be completely refreshed from its December 2018 slate. The most notable appointments are G8 Education founder Chris Scott, who was also appointed managing director, and Chris Sacre, who is also Australian country manager.
The pair’s directorships were voted on at today’s annual meeting along with that of Hamish Stevens, who joins as chair. Former EMA chief executive Kim Campbell has also been made a director. But in a move raising eyebrows, his appointment starts tomorrow, meaning his appointment won't be voted on until the next annual meeting.
When it came time to elect Scott, the Australian was urged to explain who he was by shareholders, one of whom complained about having only seen the back of his head.
Scott got to his feet and told shareholders he was a businessman and a father of six. He told the audience he would make Evolve work, adding that he had a lot of skin in the game, referencing the 33 percent stake he owns in the company.
“This company has to be fixed - it can’t go on like this. We have to put profit first without losing sight of the fact that the only way we can be profitable is to look after our customers. And who are the customers? The parents.”
Scott told shareholders that there were two key elements to childcare - wages and rent.
“You have to look after your people because the rent you are stuck with. And the government you can’t do anything about.” He refused to be drawn further on what the scope of the review included or what his plans were.
Sacre, a new director and Scott's former offsider at G8, also spoke after being prompted by shareholders. He said he had a strong operational team at G8, which will be bringing across with him in Australia.
The meeting was attended by BestStart Educare founder Wayne Wright, who later told BusinessDesk he bought 500 shares so he could come to meetings and ask questions. The charity daycare operator asked if Evolve was opening up any more centres in New Zealand this year.
“No, because Wayne’s gobbled them all up,” was the response.
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