US based Bright Horizons announce new backup care partnership at upbeat Q2 results
Bright Horizons Family Solutions (BHFS) have confirmed they have entered into a partnership with PME Familienservice, a leading provider of on site care and back up care services in Germany and reported a robust set of financial results for the second quarter of 2019.
The new partnership follows an announcement made by the company at their Q1 2019 results that they had purchased My Family Care, a UK based back-up care provider, and extends BHFS’s ability to deliver care related services to their multinational customers headquartered in the US or UK with operations in Germany.
Commenting on the partnership Chief Executive Officer Steven Kramer noted “This arrangement reflects our commitment to expanding the impact we have with our multinational clients in key markets around the world.”
BHFS have taken a small equity position in PME Familienservice which has around $50 million of revenues and will seek to deepen their understanding of the German market via the partnership going forward.
Strong enrolment growth and increased cross selling drive Q2 results
Group revenue in the June quarter rose 8 per cent to $528 million with earnings before interest and tax (EBIT) of $75 million up 15.8 per cent.
Q2 EBIT margins were 14.17 per cent, up from 13.30 per cent in the same period last year.
The gains were generated from growth in mature and ramping centres, new child care centres, back-up care and educational advisory clients, efficiencies in service delivery across the expanding customer base, and strong cost management.
These gains were partially offset by investments in marketing and technology to support the customer user experience, service delivery and operating efficiency, and costs incurred during the pre-opening and ramp-up phase of newer lease/consortium centres.
BHFS opened or purchased 12 new centres in the period and closed 25 underperforming centres.
Back up care division sees 19% growth in revenues
The backup division saw an increase in revenues of 19 per cent in Q2 revenue to $70.1 million as the impact of the acquisition of My Family Care kicked in.
EBIT margins at the back up division slipped modestly to 26.3 per cent, down from 27.4 per cent in Q2 2018.
The BHFS full service centre based child care division saw revenues grow by 5.8 per cent to $438.6 million and margins expand by 95 basis points and the educational division saw a 15.9 per cent jump in revenues to $19.4 million with a 2.4 per cent increase in margins.
Strategic priorities remain consistent as continued growth targeted
On the conference call Mr Kramer reconfirmed the company’s commitment to continued growth via the execution of it’s three key strategic priorities namely;
- Focus on organic growth through the sales of existing services and cross-selling opportunities
- Open and operate lease hold consortium centres in areas with attractive demographics, benign competitive landscapes and opportunities to support existing partners
- Through mergers and acquisitions activity seek out bolt on opportunities to expand the BFHS service range and network
For more information on Bright Horizons Family Solutions results please click here.