Think confirms centre settlements and provides update on incubator status and strategy
Think Childcare Ltd (Think) has today confirmed the settlement of four new Nido centres, as well as the opening of a new Greenfield centre in Moonee Valley, Melbourne. In addition, the company provided an update on their incubator strategy that includes a comment on Edhod Pty Ltd (Edhod), their main incubator partner, that saw receivers step in and take control in early June.
The four new Nido centres, all of which are located in Perth, Western Australia, were initially highlighted in March when Think announced plans to raise $18 million of new funds. A portion of these funds was to be allocated to the purchase of these centres from two seperate incubator partners.
At that time, the centres were trading at an average occupancy of 89 per cent with average fees of $117 per day. The centres are now trading at an average of occupancy of 98 per cent with average fees of $121 per day.
In addition,Think confirmed that a Greenfield site within the Race Course Precinct of Moonee Valley opened in June.
The opening of Greenfield sites developed in house is consistent with the company’s dual growth strategy of securing new centres from one of two channels, namely; it’s incubator partners or centres developed themselves.
Incubator strategy diversified ahead flagged Edhod sale process commencement
In light of advice received from PwC, the receivers and managers of Edhod, Think have confirmed that they have been informed that Edhod will be advertised for sale in the days ahead.
PwC stepped in to take control of Edhod on or around 5 June 2019, at which point the holding company was subjected to receivership with the subsidiaries, in which the development pipeline were housed, not subjected to the appointment.
This latest Edhod status update suggests that the receivership process is progressing, although at this juncture it is still unclear as to what the final outcome for Edhod will be.
In light of this uncertainty, Think have taken active steps to diversify their pipeline, from both an incubator partner and geographical perspective, and now expects to open 45 new centres over the next three years, down from 51 as flagged in their 2018 results presentation for the same period.The lions share of 29 new centres are slated to be opened in 2020.
Think have also signalled that they are prepared to consider any data presented by the receivers in the sale process of Edhod with a view to ascertaining whether there is any value in Think themselves participating.
For more information on theThink announcement please click here.
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