No doubt..But no new shareholding notices?
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I wonder why the market has decided to only allow a PE of 8-11 for Evolve, small cap growth stock and a great yield.
Can anyone shed some light on why this stock is so cheap?
IMO because their growth is only at approx their cost of capital. So they aren't really growing. they need to prove they can re invest and earn returns at a rate significantly higher than their cost of capital.
Having said that I still think they are below fair value atm.
It is priced for flat growth, dividend yield is looking close to 7% for 2017... I am trying to look for a downside here!
ROCE of 10% not bad, even if they stopped expanding... the distributable cash flow will continue to grow and will come right back to shareholders... again, where is the downside?
Discl not held, possibly soon though.
Even Regal now disclose they've reduced their interest in EVO
I remember thinking at the time of reading that article it sounded like soppy bollocks to me, yes, running a business is difficult, no more difficult than anyone else has it...
" having to balance shareholders, staff and the parents was hard! " - yea no sh!t
Good for the very wealthy Wright family who were not after profits, back in the real world of the free market, there is money to be made in this sector for a long time to come...
Lets look at EVO's current metrics and the likelihood of continued earnings performance, high chance of shareholders being rewarded here.
Balancing multiple interests is part of any business. The listed retirement sector does well enough, you could use the same quote and just replace parents of the kids with kids of the parents....
With growing demand for child care I think the sector will cope OK.
Will not slow down the sector's growth.
Something I have noticed is the demise of Bowling clubs,Golf clubs, Rose Societies, and the likes.
Wonder if the grand parents are spending more time minding the grand children,or are oldies to busy touring,[or still working]..?
In very recent years, sadly there has been a massive increase in the number of grandparents needing to parent grandchildren full time due to the enormous growth in the numbers of young people using methamphetamine and becoming so addicted they cannot raise their own children.
Yes unfortunately.
A friend of mine in the police force, told me if an addict's house was on fire,and his wife and children were in the house,the P addict would try and save his stash first.
I try on ST to save posters losing capital,when I can,but seeing young people losing their way with drugs deeply saddens me.
Visiting schools and seeing so many happy,bright, young kids with so much energy, does give me hope for the future.
[ps also knowing they will enjoy the fantastic books I have sold into their library]
If they reduce someone else is buying aren't they? QUOTE=Roger;666124]Exactly. Increasing labor costs will hit this sector too in my opinion.[/QUOTE]
https://nzx.com/files/attachments/258548.pdf
I thought Evolve was a growth company?
You know its not great when they talk about how revenue increased 10% but very little mention of how last years profit compares to this years... which was only up 1.5%
(EPS has "jumped" from 8.8 cps to 8.9 cps)
Surely I'm not reading this right?
Adjusted NPAT up 12.7% on pcp in line with revenue growth
So t_j its all honky dory .....no worries
T_j me old mate - methinks we need to read the financials in the presentation pack
They are much better reading when you adjust for this and adjust for that and get a different result.
Evolve announces strong growth and all the rest of their public relations corporate speak. My bean counting radar is always switched on high alert when there's not a single mention of net profit after tax in the headline news release. Creative accounting 101, ignore the most fundamental measuring stick of corporate performance and accentuate any other possible financial measuring sticks you can find !
Why am I not surprised that they are using the old smoke and mirrors to paint a glossy picture ? I call if the Norah factor.
8.9 cps v 8.8 cps last year. Strong growth LOL. Thanks Evolve, its always great to start the business week with a good laugh.
No doubt they'll have their bean counters working overtime to highlight how on a "normalised basis" there was strong growth but on a really quick review of the financials I did pick up one area of very strong growth, they moved from a NTA of -17 cps to an NTA of -25 cps a whopping 47% increase in their net negative NTA, extremely impressive !
Yea... I knew when they had that headline something was wrong, but didn't know how bad it was till I opened up the attachment... Late Jan old Forsyth increased their rating from $1.40 something to $1.53 with a FY17 estimate of 10 cps... then on 16 May they promptly removed it from their "Conviction list"... hmm... they have a tea cup meeting last week you think? (got the old wink wink nudge nudge...)
hmm share price hasn't crashed... defying gravity really
There was a favourable $1.3m 'earn out' adjustment that boosted F16 profit (not normalised by them but noted)
So of course it's OK to 'adjust' F16 profit by this amount to compare F17 against a lower prior period.
But at the end of the day F17 profit of 8.9 cents a share is what matters and the market wil see top line growth and assume eps growth and send the share price towards 120 in no time.
Also the repayment of the $20m senior revolving facility in the F17 year is a good sign.
Pretty poor result overall whichever way you slice and dice it. No wonder Milford been reducing their holding leading upto results date in past few weeks.
Glad I've sold mine last month at 1.09 after basically watching it go no where for about 2 months or so....costed me brokerage both ways, that's it!!!
That a bit of dry humor there mate ? Can't see it, even scraping the bottom of the barrel and normalizing this its an underwhelming result from a financial perspective but of course they paint it as strong growth...they couldn't possibly be trying to be creative for more bonus's and directors and management salary increases... surely not !
A very average share with below par growth, lest just call a lemon a lemon and be done with it !
'Normalising' the F16 tax expense to make F17 growth better is quite a good trick.
Cash Flow is harder to 'normalise'. That showed Operating Cash Flow of $22.3m with Investing Cash Flows of $21.8m.
Good they investing profits for growth but free cash flow didn't cover the dividends - why pay divies?
Agreed. Other insto's been reducing lately too. Nothing in this result that would make them want to increase again. Most likely result is there's a massive undisclosed overhang of stock ready to come onto the market by disenfranchised institutional holders at the slightest hint of a SP increase. Very hard to see how the stock gains momentum upwards from here and the dividend yield case really isn't all that compelling either.
Children can be a very rewarding experience and running a day care by a caring family for others in the community can be an enriching experience all round for the kids / parents / caregivers but how much money is really in it and does this suit the corporate model ?...
Not the result I was expecting.
Sold 75% of our holding.
Has brought the average cost of the balance to 68 cents per share.
Key advantage of being a retail investor over an institution is liquidity. I wouldn't mind having a few bob, (I like backing things that are 100% certain), there would be several institutions that would love to be able to extricate themselves from a tight spot as quickly as you have but the liquidity simply isn't there. If you'd sold a few more your remaining holding could have been free, (I would have if I were you) :D
Totally agree,being a small retail investor means buying and selling can be easy.
Even then you often have be quick on the button .
Yes working on having "free ones".
Money was recycled very quickly into buying more LOV [asx].
Anyone notice a big cross trade of more than 2mln shares transacted at $1 little while ago....
I love your dry sense of humor mate. Any way you slice and dice this the disposal of over two million shares at $1 is a shocking vote of no confidence in the future of EVO. Norah Barlow probably suggested he had to keep some to look good like she does :)
Yeap, it literally SCREAMS GET ME OUT !!!!!!!!!!
Seems Westpac have ceased ti be a SSH
Oh dear the share price below $1 ... a bit ominous
Having a morbid fascination of trying to make sense of what's said and whats in the accounts I have taken the challenge to answer a question a friend asked 'How much extra profit is coming from the new centres they buy?'
Good question - so working on how much or how little they make from the new centres. Not looking too good at the moment.
$1.00 in December 2014. Feel sad for shareholders, (especially on a relative basis to the NZX50), but I have posted quite a number of negative posts over the years and warned that I really don't believe childcare suits the corporatized model.
Sold the balance of our holding at 98 cents per share this morning,after not being impressed by either The Chairman's,or the CEO comments, in the annual report.
My shares went last week at .97 in favour of Sum. Lost the faith.
I'm sure you're right Percy :) (I got out too)
Interesting to see a preschool teacher's Herald opinion piece this week on the shamefully cramped conditions our battery farmed preschoolers now face:
http://www.nzherald.co.nz/nz/news/ar...ectid=11894416
My wife has seen this first hand visiting various centres to seek work placements for an ECE training course
Some extracts:
The minimum required in New Zealand is 2.5sq m per child inside and 5sq m per child outside. The minimum in the US is 3.5 to 4.2 square metres per child, with a preference for 5sq m indoors. This is measured as free, clear floor space. In New Zealand, furniture is not taken into account.
In the 1960s, when New Zealand children spent a few hours a week in early education, not up to 50 hours a week as they do today, the outside space was 75sq ft per child, or 6.9sq m. This is now 5sq m, half the US recommendation of 10sq m outdoors....
In the market driven, profit-oriented environment of early childhood, some centres will pack the maximum number of children into the minimum required space, and will receive more funding and fees for the same resources. Those centres who do not operate in this way will struggle to maintain staffing and financial viability on an uneven playing field, despite providing far better quality.
This is a pretty shocking announcement ...even though full of optimism for the future
https://nzx.com/files/attachments/263689.pdf
Even their worst case FY number neans H2 will be much better than last year ...reversing a big drop in profits in H1
How often do these promises actually occur?
I thought they had so many new centres that increased profits were a given
I remember at the time asking what strong growth. When the tide goes out you sees who's been swimming naked.Quote:
Evolve increases dividend on strong growth *
*
Evolve Education Group Limited ("Evolve") has delivered a strong result for *
the year ended 31 March 2017 with revenue of $151.4m (an increase of 10% over *
the equivalent period last year, of $137.4m) and Profit before interest and *
income tax of $23.6m. *
Strong growth LOL definitely time for a Tui ! No wonder the director was desperately keen to quit millions of shares.
As I have stated from the very outset of this thread I remain of the view that early childhood centers are best run by caring private owners well connected to the community and are not well suited to the corporate model. I think shareholders can take their assurance that they are addressing lower occupancy at their centers and are confident of restoring profitability with a large grain of salt.
Yes Winner it does not look good, because of IQE possible subsidy enrolment issues, I questioned the CEO Alan Wham some time ago.
I ask if EVO had any possibly subsidy issues. My understanding is they had/have. My understanding also is that EVO is not directly to blame and the scale of the issue is minor compared with what IQE had to deal with. Still al this is not helpful.
From the Chairman - This is disappointing and it is fair to say we have been slow to react
Obviously management don't have much of a handle on things
Good to hear that 'our eyes are on the road ahead' though
I love reading Chairmans addresses - always provide insights
From latest annual report.
Milford.......8.17%
Paradice.....5.89%
Salt...........6.03%
ACC...........5.42%
Percy .........0.00%
LOL My sister in law would be mortified if you called her my girlfriend as would my brother !
Yeap she's still chipping away at the coalface now managing one of their center's. Seems happy enough there now and was talking about buying some shares when we got together last Christmas. Had a mid winter Chrissy pot luck lunch there recently and no mention of shares then so I hope for her sake it was just the liquor doing the talking earlier.
Thank goodness for that.!!..lol.
Carnage at the open ....
........a dead cat bounce coming ......no not worth it even if there is seeing EVO a sin stock ...and a dog .....but then if I ignore might be worth a little punt later inthe day .....mignt get even more to put on WINX in Aussie
Looking back it appears the all time low was 81 cents. Could see that tested soon and we could see this plumb all new lows and to be quite frank I think that's warranted.
The business model doesn't really appear to work very well as predicted by some on here a long time ago.
Remember as posted on 22 May 2017 this has net negative NTA of 25 cps as at balance date and all this money they're paying for goodwill for new acquisitions doesn't really appear to be a strategy that's paying dividends does it.
They say they're confident they can restore profitability but we've heard that sort of song before with companies like VIL and CAV (to name just two) haven't we !
Call me a hardened cynic but I see an awful lot of potential with this one, to the downside !
jeez - share price in the 70's
Resisted the temptation on Friday and loaded up on WINX in Australia instead. Solid return
Maybe get tempted in the 60's
Market seems riddled with the carcasses of education / child care wannabes over the years - has there ever been a successful one
Yes.........Kidicorp.
Craigs last Nov had a target price of $1.33 when EVO was trading at $1.04,and in May this year they altered their target price to $1.20.
Forbar's target price was $1.38..
I made a mistake buying into this story,and was very lucky to escape with both a very good profit and a dividend.
I am very hard on companies who do not do what they say they will do ,and prefer to have a portfolio of achievers.
It does off course take time to see whether a new listing is a winner or a loser.EVO talked the talk at their agm,but have failed to deliver.
I think it is part of being an investor,you have to face up to your mistakes quickly.It is not just buying,but selling also.
Meanwhile over the ditch, G8.ASX has had a fairly decent year or two doing essentially the same thing EVO has done.
The case for investing in EVO at the present value is not all bad.
Good post and something new investors can learn from. With new listings they either produce results or produce excuses. Back winners not excuse makers.
Edit HUGE volume today 22.7 million shares with a vwap of only 75.08 cents per share. I am not surprised at all to see this test all time previous lows and fail. Investors are very "brave" to be holding this one I reckon.
Edit HUGE volume today 22.7 million shares with a vwap of only 75.08 cents per share. I am not surprised at all to see this test all time previous lows and fail. Investors are very "brave" to be holding this one I reckon.[/QUOTE]
Ouch, thats more than 12% of the EVO shares dumped at an al time low in 1 day.
Beagle what is going on, your fine nose should be able to sniff out the finer details.
I suspected issues some time ago but not of this magnitude.
Yes someone stepped up to the plate and got their boots filled that's for sure !
There will have to be some SSH notices posted soon Forest. What I find quite surprising and I'd has at a guess others do too, is that just a 2% shift in child occupancy rate and look at the dramatic impact on the bottom line !...and all this time we thought it was just airlines that were sensitive to load factors lol
Very early on in this thread some on here including Forest and I raised concerns about the standard of care, food and heating and suggested that some of the privately run operators being taken over would suffer under a corporatized model as parents are no fools when it comes to the wellbeing of their precious little darlings and sure enough the chooks appear to have come home to roost.
Yes I agree 100%. Something definitely smell's off and my nose says there's more trouble coming. Saying they are confident that by FY19 things will be all back to normal and fine and dandy...well they would say that wouldn't they ! Downgrades come in three's until proven otherwise !
Bring back Norah........................lol.
Yes, ACC did buy them by the looks...
https://nzx.com/companies/EVO/announcements/306002
Comings and goings.
Regal Funds. buying.
Salt Funds ...buying
ACC,buying and selling.?
Milford.......Selling.
Percy..........Sold.
Alan Wham CEO going.