EVO - Evolve Education

[Beagle]

$6.0 to 6.5m is for the year ended 31 March 2020 Winner. The "gunna" forecast is for calander year 2020. I'll beleive it when I see it....

Profoundly shocking result as warned by me many times.
Centre occupancy has been dropping for years but has been in freefall lately and 72% is appallingly bad.
Wages up from $42.1m to $44.9m, (which is a real red flag).
Rent up as well.
Wages and rent costs now comprise a whopping 82% of all revenue, up from 75.5% in the previous comparable period.

Asset backing even if you believe the goodwill figures in the balance sheet at face value, (and I don't), is just 10 cents per share. Given that they seem unable to earn an acceptable return on capital employed I think anything over 10 cents per share is just shareholders being "hopeful". (I could use other words but trying to be reasonably polite about it)

Stocks under 20 cents per share used to be known as "penny dreadful's" Not a term you hear much about these days but I think its very appropriate here.

This company has a long track record of not meeting forecasts so I would take any forecast that they're "gunna" do better in the future with a grain of salt.

[winner69]

$6.0 to 6.5m is for the year ended 31 March 2020 Winner. The "gunna" forecast is for calander year 2020. I'll beleive it when I see it....

Profoundly shocking result as warned by me many times.
Centre occupancy has been dropping for years but has been in freefall lately and 72% is appallingly bad.
Wages up from $42.1m to $44.9m, (which is a real red flag).
Rent up as well.
Wages and rent costs now comprise a whopping 82% of all revenue, up from 75.5% in the previous comparable period.

Asset backing even if you believe the goodwill figures in the balance sheet at face value, (and I don't), is just 10 cents per share. Given that they seem unable to earn an acceptable return on capital employed I think anything over 10 cents per share is just shareholders being "hopeful". (I could use other words but trying to be reasonably polite about it)

Stocks under 20 cents per share used to be known as "penny dreadful's" Not a term you hear much about these days but I think its very appropriate here.

This company has a long track record of not meeting forecasts so I would take any forecast that they're "gunna" do better in the future with a grain of salt.

But they made $13m plus ebitda in F19.....so half this year even with new centres contributing a bit

I see they still burning cash with negative operating Cash Flow.

[Beagle]

But they made $13m plus ebitda in F19.....so half this year even with new centres contributing a bit

I see they still burning cash with negative operating Cash Flow.

Its bad mate, shockingly bad. The fixed costs of running childcare centres are absolutely massive and once you go under 75% occupancy, its a bit like trying to make money from an airline with less than 75% passenger loads...it simply doesn't work. I've talked before about the widespread proliferation of new childcare centres in N.Z. The market is absolutely saturated and every Tom, Dick and Harry are trying whatever tricks they can think of to lift low occupancy...

[winner69]

Its bad mate, shockingly bad. The fixed costs of running childcare centres are absolutely massive and once you go under 75% occupancy, its a bit like trying to make money from an airline with less than 75% passenger loads...it simply doesn't work. I've talked before about the widespread proliferation of new childcare centres in N.Z. The market is absolutely saturated and every Tom, Dick and Harry are trying whatever tricks they can think of to lift low occupancy...

But they’re going to make heaps in Australia ...believe me

While they hope NZ doesn’t bleed too much

That’s the strategy ...make heaps in Australia .....try not to go backwards in NZ ...and maybe find a greater fool to take over the NZ centres

[Beagle]

But they’re going to make heaps in Australia ...believe me

While they hope NZ doesn’t bleed too much

That’s the strategy ...make heaps in Australia .....try not to go backwards in NZ ...and maybe find a greater fool to take over the NZ centres

If they did make $15m EBITDA in calendar year 2020 how would the bottom line look ?
Here's a clue, Interest costs for the most recent "half" year were $9m.
Nobody's going to pay them anything like the current carrying value of intangible assets when centres are at just 72% capacity or anywhere just above that.

Cheaper and easier to open fancy new centres, pay nothing for goodwill and steal market share off others. (mothers love seeing their little darlings attending flash new centres with new play equipment as opposed to old run down childcare centres with old equipment and obvious signs of lack of maintenance).

In my opinion the balance sheet as presented is a complete fabrication of the realisable value of intangible assets.

[WAIKEN]

We cant compare EVO as at 19.9.19 with the previous EVO.
Chris Scott and Chris Sacre were only at the helm for 11 days of the 6 months.
The entire board except Norah Barlow who is going to be replaced.
Roseanne Graham and the CFO and other executives have gone. See below - Support office savings of 3.4m
The ship was turned around at mid Nov 2019 only 2 months after a new team was put in place. This is a remarkable but expected performance from two directors with millions of dollars at risk. Occupancy stabilized at 72% - See below

Beagle Your abiding interest in this stock and your rapid damning responses so soon after this announcement indicates you are watching EV0 closely
I can only find 2 explanations, as you said you hold no stock. You are motivated by an altruistic desire to keep visitors to sharetrader fully informed about EVO or you are hoping to see the price drop so you can load up.

Forget 30.9.19 and focus on 31.3.21. I predict a profit after tax of at least 20-30mill. Assuming total shares of 1bill then eps will be 2-3 cps On a PE of 15 the share price would be 0.30- 0.45




Consequently, the average daily fee paid by the parents across the group increased from $25.30 at the start of April 2019 to $28.00 as at mid November 2019; 3. Board fees were reduced by 16.7% as a commitment to the financial performance turnaround strategy; 4. Support office was streamlined delivering annualised savings of approximately $3.4m per annum with effect from 1 December 2019; and 5. Occupancy was stabilised at 72% as at mid November 2019. The effect of these 5 strategies puts the New Zealand operations on an annual run rate of $10m EBITDA from 1 January 2020. This is before the financial impact on EBITDA of improvements in occupancy and centre based wage savings which will occur during CY2020.

[forest]

We cant compare EVO as at 19.9.19 with the previous EVO.
Chris Scott and Chris Sacre were only at the helm for 11 days of the 6 months.
The entire board except Norah Barlow who is going to be replaced.
Roseanne Graham and the CFO and other executives have gone. See below - Support office savings of 3.4m
The ship was turned around at mid Nov 2019 only 2 months after a new team was put in place. This is a remarkable but expected performance from two directors with millions of dollars at risk. Occupancy stabilized at 72% - See below

Beagle Your abiding interest in this stock and your rapid damning responses so soon after this announcement indicates you are watching EV0 closely
I can only find 2 explanations, as you said you hold no stock. You are motivated by an altruistic desire to keep visitors to sharetrader fully informed about EVO or you are hoping to see the price drop so you can load up.

Forget 30.9.19 and focus on 31.3.21. I predict a profit after tax of at least 20-30mill. Assuming total shares of 1bill then eps will be 2-3 cps On a PE of 15 the share price would be 0.30- 0.45




Consequently, the average daily fee paid by the parents across the group increased from $25.30 at the start of April 2019 to $28.00 as at mid November 2019; 3. Board fees were reduced by 16.7% as a commitment to the financial performance turnaround strategy; 4. Support office was streamlined delivering annualised savings of approximately $3.4m per annum with effect from 1 December 2019; and 5. Occupancy was stabilised at 72% as at mid November 2019. The effect of these 5 strategies puts the New Zealand operations on an annual run rate of $10m EBITDA from 1 January 2020. This is before the financial impact on EBITDA of improvements in occupancy and centre based wage savings which will occur during CY2020.

It looks like this could well be an successful turnaround story in the making. Management understand this industrie and have a lot of skin in the game.
2 very positive signs I think.

[golden city]

It is clear show that new management has plan and starting to look good and number start to show on next half share price will follow soon

[Snapper]

It looks like this could well be an successful turnaround story in the making. Management understand this industrie and have a lot of skin in the game.
2 very positive signs I think.

Wow, what makes you think that occupancy is stabilising at 72%? It went from 76% in June to 72% in October. They wouldn't even have their November results in yet. Increases in parent fees are unlikely to stop the slide.

The reality is that a lot of ECE centres are doing it tough - it's a difficult sector to be in at the moment with fairly static govt funding and competition limiting the parent fees that can be charged. Add to that their massive debt burden on mostly intangible (and declining) assets and it looks like they are in a very difficult situation.

A listed corporate model for ECE has never worked in NZ and, by the look of it, this one isn't going to be any different. Good luck though.

[WAIKEN]

Hi Snapper
Occupancy stabilized in mid Nov 19. The new team only got the tiller on 19.9.19
To stop the decline from years of mismanagement in only 8 weeks is outstanding.
ECE is a tough market to be in like retail which is over shopped but look at the NZ retailers who do succeed in a shockingly crowded market.
I had an accounting client who did very well out of her ECE centres. Its all about leadership.
We have a completely new team at EVO. The Wallabies have been replaced by the Allblacks. Ironically this time the Allblacks are Aussies.
Chris Scott bought a pig in a poke off Findlay. It cost him tens of millions. He will need to work 24/7 for years just to get his money back and a return on that.
We have the best case scenario an investor can have on the NZX. A CEO with a great track record with his interests entirely aligned to smaller shareholders. Most coys have highly paid very part time directors with little skin in the game and that skin comes generally from low risk options and share incentive schemes.
Chris Sacre the CFO has also a multi million dollar investment in us. I predict a doubling in the share price by this time next year.