EVO - Evolve Education

[Rawz]

Regarding the proposed sale of the NZ centres, to be 'voted on' tomorrow:

It's pleasing to see previous Posters so optimistic. Despite the comments extolling the "sell here, buy there" strategy, I can't understand how the 2 different companies (the Aussie crew (Shine BidCo Limited?) and EVO) can make such divergent value judgements on where to invest in early childhood centres.

What does Shine BidCo know that EVO doesn't, and vice versa; is it a case of "the grass is greener over there..." for both?

Government policy can change in the blink of an election or a charismatic administrator.

(I'm holding a few, and well under water, even having topped up at 60 cents recently).

Good post I agree with your thinking

[cyclist]

I think the timing is crap, and kinda ruins the post-covid recovery narrative on which I purchased. I voted no. Which if the proxy's are any indication (99%+ for), then I'm a 1% 'er

[DTC]

I voted no also. The whole thing seems muddled to me, in addition to my comments above, the executive team talked at the meeting about how the Aussie company taking over the early childhood centres in New Zealand would do such a great job-it sounded as if they would do a much better job than what EVO can do. Apparently they back their skills in buying and selling early childhood centres more so than actually running them.
Disclaimer: I’m on the outside and have little knowledge.

[WAIKEN]

We will benefit from these billions being applied to the early childhood sector. This is just in one State. NZ will never give preschools the support that Australia does. Chris Scott built G8 into the biggest preschool operator in Australia. I believe he will make a lot of money for shareholders in the next few years. See below.

Over the next decade the NSW Government is spending $15.9 billion on childcare and early education, including:

• Up to $5 billion over 10 years to establish the Childcare and Economic Opportunity Fund.
• $5.8 billion over 10 years to introduce a high-quality universal pre-Kindergarten year for all children in NSW in the year before school by 2030.
• $1.4 billion over four years to provide affordable preschool.
• $64.1 million to increase participation of 3 year olds in preschool in long day care settings.
• $281.6 million over four years to increase the number, quality and retention of early childhood educators and teachers – the package includes early childhood teacher higher education scholarships of up to $25,000, Vocational Education and Training scholarships of up to $2,000 and employer supplements for staff retention.
• $111.2 million over four years for developmental checks in preschools in both metro and rural areas as part of the Brighter Beginnings initiative.
• $24.7 million over four years to build system stewardship capability and offer more tailored support and guidance to early childhood education and care service providers.
• $37.9 million over three years to improve access to before and after-school care services.

[silverblizzard888]

Theres huge incentives to target Australia and they've seen it first hand how much better it is than the business they had in NZ. Key points previously stated by management was:

-Evolve’s Australian operations contributed over 80% of the Group’s UnderlyingEBITDA in FY21

- where the New Zealand underlying EBITDAwas a loss of $0.9m compared with a profit in Australia of $5m



If they can use the $42-49 million to acquire businesses at similar EBITDA as past acquisitions they would be looking at about $10 million extra EBITDA.

That should bring them up to $10 million profit, not bad given the current valuation on the market is $100 million.

After that Chris Scott needs to work his magic and get more loans and capital raises done to buy more, increase profits and the share price increases. It starts off a beautiful cycle of constant share price increases, the type that happened at G8 Education.

[DTC]

Theres huge incentives to target Australia and they've seen it first hand how much better it is than the business they had in NZ. Key points previously stated by management was:

-Evolve’s Australian operations contributed over 80% of the Group’s UnderlyingEBITDA in FY21

- where the New Zealand underlying EBITDAwas a loss of $0.9m compared with a profit in Australia of $5m



If they can use the $42-49 million to acquire businesses at similar EBITDA as past acquisitions they would be looking at about $10 million extra EBITDA.

That should bring them up to $10 million profit, not bad given the current valuation on the market is $100 million.

After that Chris Scott needs to work his magic and get more loans and capital raises done to buy more, increase profits and the share price increases. It starts off a beautiful cycle of constant share price increases, the type that happened at G8 Education.

Is that the same G8 Education whose share price has fallen from $4 to less than $1 over the last 5 years?

BTW: I am hoping your optimism bears out in reality.

[silverblizzard888]

Is that the same G8 Education whose share price has fallen from $4 to less than $1 over the last 5 years?

BTW: I am hoping your optimism bears out in reality.

Usually such a strategy using debt to constantly grows works really well in the right environment, but of course it has limits and can easily unravel and become a companies downfall. G8 got extremely large with a lot of debt and thats when things didn't pan out right for them they got into trouble. Though before that they had a really good 5-6 years. In Evo's case they have a lot of run way to grow and leverage debt for many years, then we will see if Chris Scott learns how to manage debt appropriately.

Also Chris Schott hasn't been running G8 in the last 5 years, so a sliding share price is not entirely relevant to him.

[silverblizzard888]

Sale was expected to settle today, no announcement from the company. I'm assuming there should be an announcement next week then.

[silverblizzard888]

Evolve Education Group Limited will be changed to “Embark Education Limited”

New webisite: https://embarkeducation.com.au/

Completion of sale and Change of name and address
https://www.nzx.com/announcements/399848

[Rawz]

I see the government is talking about pumping more money into ECE

I said it at the time- EVO was selling off the NZ assets at the worst possible time. Right at the bottom. Right when there was a teacher shortage and not fully clear of covid.

Now the funding comes and soon enough the teacher shortage will revert.

Sour grapes