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  1. #391
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    The largest operator in the NZ childcare market is Best Start - https://best-start.org/community - they are a owned by a charitable trust.

    I think might be some difficulties in competing in business as a company with shareholders needing a return against a charity. Best start used to be kiddi-corp which used to be ABC. ABC NZ was spun out of the receivership of ABC australia.

    https://en.wikipedia.org/wiki/ABC_Learning

    ABC was once the largest publicly listed child-care operator in the world. It had a market capitalisation of $4.1 billion. When its shares were suspended from trading at 54c, the company's worth was $296 million.[20]
    An unexpected drop of 42 per cent in profit in the second half of 2007 to $37.1 million and its inability to service its $1.8 billion debt triggered a decline in the company's share price. Several directors of the company were then forced to dump millions of shares after receiving margin calls. The combined effects caused the share price to plummet 43% to $2.15 after trading as low as $1.15.[21] By the end of the selling, founder Edmund/Eddy Groves and his wife sold virtually all of their stakes of 20 million and 6 million shares respectively while director Martin Kemp unloaded 2.7 million shares. The combined Groves' stake represented 8 per cent of the company.[22]

  2. #392
    ShareTrader Legend Beagle's Avatar
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    Thanks that is interesting. As I have stated from the outset of this thread, I don't believe the corporate model is well suited to early childcare centres.
    The fact that ABC went into receivership and Evolve is now up against it with competing with a charity which doesn't require a corporate return on its assets doesn't auger well for the future of Evolve.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  3. #393
    ShareTrader Legend Beagle's Avatar
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    Not sure if there's anyone left that's interested in this pup any more but I caught up with both my sister in law's on the weekend who both are involved with Evolve and as you would expect Evolve issues came up. They're in real trouble. Early child care centers are sprouting up like wild mushrooms all over the place and occupancy is under real pressure.
    Head office and their management team seem hopelessly out of their depth from what I heard and have no idea how to stem the tide of dissatisfaction.
    Incentives within the industry and becoming more normal, (eg. half priced daycare for the first six weeks if you sign up for a year), centres are under intense pressure to get occupancy up and heaps more pressure to get enough qualified staff. The supply glut is becoming a very serious issue facing the industry with flash new centres drawing parents away from older less attractive facilities because they look better and parents think its a better look for their kids. What parent doesn't want the best for their kids... This will probably limp along for years as a penny dreadful or go under in due course.
    How do you compete with a corporate business model with its primary responsibility to shareholders with a much larger charitable organisation which puts the kids interest first, left right and centre ? Which type of centre would you take your kids too...
    They owe their bankers more than $50m and they have put Evolve under a choker hold with their banking facility. Talk about being snookered !
    Last edited by Beagle; 05-03-2019 at 02:48 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  4. #394
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    Thanks for this Beagle. Ive been looking into purchasing one or two ECE's privately. The update from the broker is that PE's of these have retracted from 4.3X to 3.6X since Evolve stopped their acquisitions. I imagine some of the above (increased competition, newer premises etc) has contributed to this reduction also.
    As you've outlined Ive noticed alot of new ECE's popping up with very falsh centres and great looking service offerings.
    Cause for a re-think!

  5. #395
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    Good announcement today. Evolve have confirmed that the March year end EBITDA remains within the range previously advised. It is actually in the upper half of that range!! (Before an unknown good will impairment and gain-or is that loss on sale). The 44% increase today takes them back to the mid Feb 2019 share price. Now only down 20% from the 30c price point set by the November downgrade.

  6. #396
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    Did anyone catch this fast train which is going gangbusters at the moment?? Literally doubled in a week...

  7. #397
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    I did bought heaps @ 20c ................. very happy

  8. #398
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    Quote Originally Posted by dreamcatcher View Post
    I did bought heaps @ 20c ................. very happy
    Awesome, I was going to get some the other day but after reading some of the comments last week I didnt. Gutted :X Well done Dreamcatcher

  9. #399
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    Quote Originally Posted by dreamcatcher View Post
    I did bought heaps @ 20c ................. very happy

    Well done dream catcher ...awesome stuff

    You’re a star but don’t give it all back so keep an eye on those charts
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  10. #400
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    I wonder what today will bring. Yesterday was a day of two halves as Mr market tried to figure out what the price should be. After a close of 28.5 the open was 30c. Another 30% gain took the intraday high to 39 before an afternoon fall took the price back to 28.5

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