This article is from the Australian Property Journal archive
TAKEOVER target Think Childcare has outperformed its full year earnings guidance, as occupancy across its centres early in the year is ahead of the same period prior to the COVID outbreak.
Underlying group EBITDA for 2020 grew 89% on 2019 to $26.8 million, and came in 7% above the guidance range of $24 million to $25 million.
The group, which operates Nido Early School, is currently at the centre of a bidding war between international childcare centre operator Busy Bees Early Learning and Alceon. Busy Bees upped its bid by 20% to $2.10 per security last month, after Alceon matched the initial Busy Bees bid on Christmas eve and upped its share in Think Childcare to 19.23%.
Think’s share closed 7% higher at $2.14.
Its full year underlying EBITDA lifted 104% to $30.1 million, and it is expecting a similar result in CY21 despite allocating $4 million in increased corporate costs this year to support future growth.
“This result demonstrates significant momentum as we continue to execute on our strategy as Australia’s leading provider of premium childcare services to suburban families,” managing director and CEO Mathew Edwards said.
“The critical nature of the sector was highlighted further through COVID-19, re-affirming it is critical to drive workforce participation.”
Occupancy in the early stages of the year is 2% ahead of the same time during 2020, which the group said was driven by its incubation strategy.
A solid rebound in occupancy driven by recovery in existing enrolments and new enrolments. Enrolled peaked at 79% and attended at 73%. Think said it had seen a significant return from marketing investment during the COVID-19 period, with 43% of total enrolments being new at the end of 2020.
It has a fully funded pipeline of 36 services in its development company, Think Developments, including 10 in trade-up as of December. Its total pipeline of 50 new services, including third-party incubators, will generate $25 million in service-based EBITDA within 36 months.
Think has $22.9 million in cash and $24.2 million of facility headroom.
Its workforce increased by 25% between in the 12 months, helped by investment in data and collaborative technologies providing operational and wage management efficiencies.
A fully franked dividend of 12 cents was determined for 2020, a 30% reduction on all dividends paid in 2019.
