EVO - Evolve Education

[silverblizzard888]

Chris Scott paid 64c for a 19% stake per share and this was just last year... Now he has "promised to absorb all his entitlements" makes me wonder whether he is desperate to take over the company or basically he has no choice... but as Silverblizzard rightly put it... 8 cents is terrible dilution and ridiculous... its HIGH risk territory now.

Well I'm sure he was forced into a corner, but he can see the big picture, he has used his connections to put together an acquisition deal and if that guy can work his magic then this company can comeback stronger. I won't be surprised if all focus on expansion is in Australia now. If Chris Scott is willing to take the hit then I guess we will have hope. After putting in $20 million AUD intially, hes putting in $12 million NZD more now, nothing going to make him work harder to earn back his money.

[silverblizzard888]

Centre occupancy rates remain under intense pressure according to my sources which will be why FY20 forecast is lower.

Occupancy rates have dropped from 78.6% to 76.5% , on a trend wise its not ideal and looks to be putting the business under pressure.

[whatsup]

Well I'm sure he was forced into a corner, but he can see the big picture, he has used his connections to put together an acquisition deal and if that guy can work his magic then this company can comeback stronger. I won't be surprised if all focus on expansion is in Australia now. If Chris Scott is willing to take the hit then I guess we will have hope. After putting in $20 million AUD intially, hes putting in $12 million NZD more now, nothing going to make him work harder to earn back his money.

So in order for that to happen , do they totally withdraw from N Z , if so at what cost ?

Q who is "under writing " the under writers ?

[King1212]

Goodness me..another IQE

[silverblizzard888]

So in order for that to happen , do they totally withdraw from N Z , if so at what cost ?

Q who is "under writing " the under writers ?

No I don't think they will withdraw from NZ, but any expansions will be slow or completely halted here, but more a focus on keeping the sustainability of the business instead until it starts improving its cashflow first.

Canaccord Genuity (Australia) Limited and Forsyth Barr Group are the underwriters, and apparently quoting from the releases today "An entity associated with Chris Sacre has participated in sub-underwriting the Offer" so there is a underwriter for the underwriters.

[winner69]

The instos have to make their mind up by tomorrow if they going to participate ...hmm ...and then a book build for any shortfall.

[silverblizzard888]

Goodness me..another IQE

It seems so, our geography and population size just makes it a bit harder to build out education businesses in NZ and the high cost and low government funding doesn't help either.
Two of the hardest areas for investing in NZ are education and mining.

Like all investing strategies, always make sure there is a cornerstone shareholder committed to its long run success. If this survives and becomes successful it won't be because it had a good NZ business, but because of the Australian one.

[carrom74]

[QUOTE=silverblizzard888;758247]No I don't think they will withdraw from NZ, but any expansions will be slow or completely halted here, but more a focus on keeping the sustainability of the business instead until it starts improving its cashflow first.

The challenge is the NZ Market is the funding allocation and there is no big increases and if you see the last chairman's speech,he has mentioned it and acknowledged it as putting additional pressures on costs.

Today's announcement talks about additional funding allocations in the Australian market which could be one of the reasons about them moving slowly towards Australia...

But from my disastrous experience of investing in IQE which also bought centres in Australia before collapsing,i am very skeptical about this move(though different sector within education)...

[steveb]

would love to know what the underwriting costs are.Lumping them together with working capital seems an effective way to fudge over the underwriting costs,especially as your working capital should be covered by the meaningfull contribution from Australia:-
, it is expected that this initial phase of the Australian expansion will meaningfully contribute to Evolve’s earnings, as only profitable centres will be targeted for acquisition

[silverblizzard888]

Today's announcement talks about additional funding allocations in the Australian market which could be one of the reasons about them moving slowly towards Australia...

But from my disastrous experience of investing in IQE which also bought centres in Australia before collapsing,i am very skeptical about this move(though different sector within education)...

IQE bought a online Australian education business, its quite a bit different, considering that business had fraudulently enrolled students through agents and subsequently loss govt funding.

Evolve is actually acquiring centers with people who have a successful track record with G8 education, there is some difference.

would love to know what the underwriting costs are.Lumping them together with working capital seems an effective way to fudge over the underwriting costs,especially as your working capital should be covered by the meaningfull contribution from Australia:-
, it is expected that this initial phase of the Australian expansion will meaningfully contribute to Evolve’s earnings, as only profitable centres will be targeted for acquisition

Underwriting cost is $3 million

Expectations from Australia is $25 million will acquire 12 centers generating $5-6 million in ebitda