Bright Horizons releases Q3 2019 results and provides indications of guidance for 2020
In the third quarter of 2019 the Group saw revenue increase to US$512 million, up 8 per cent versus the same period last year, while income from operations increased to US$63 million, up 13 per cent compared to last year.
Net income increased 23 per cent to US$41 million and diluted earnings per share increased by 21 per cent to US$0.69 cents.
Overall growth rates were marginally lower than those reported earlier in the year but in line with 2019 guidance.
Commenting on the results Stephen Kramer, Chief Executive Officer said “We are pleased to report strong financial results for the third quarter of 2019. Our full suite of solutions continues to be well received in the marketplace.”
Strategic priorities remain intact with cross selling a focus
The Group continues to focus on the delivery on their corporate strategy via their three key 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
In the period 12 new centres were added to the network, with the acquisition of tuition program management company GP Strategies also completed, and efforts to deepen cross selling to existing customers continued with 25 per cent of customers now using more than one Bright Horizons service.
18 month investment program in technology continues to yield results
The Group’s well flagged commitment to invest in technology to improve customer engagement levels is ongoing and continues to yield results.
The focus has been on two areas:
- efforts to make the user experience (ie: the parent experience, particularly in the back up division), as seamless as possible through the implementation of new technologies such as “instantbook” a remote booking application and;
- efforts to improve the take up of Bright Horizons services by families that have as yet not engaged or have engaged and dropped off through the use of targeted personalised marketing techniques.
In both instances positive outcomes have been observed with intentions to continue investing ongoing.
US 2020 election and Brexit on the radar but overall growth expectations on track
Looking ahead to 2020 there was acknowledgement by Mr Kramer on the conference call that the US election would likely precipitate an increase in the prominence of early education funding related policies but overall, and based on the Group’s 30 years of experience, expectations for meaningful change in this space were low.
And with respect to Brexit, there was an acknowledgement that at the margin some challenges on the enrolment side of their UK operations had been experienced but the overall likelihood of severe disruption was low as centres in the UK were were stand alone in nature ie: not corporate services and therefore the customer base was more diversified.
Guidance for 2020 was to expect momentum generated to continue with the overall growth make up across the organisation to be consistent with 2019.
Revenues are expected to be up between 8 per cent and 10 per cent, income up between low to mid teen percentages and margins to continue to expand.
The Group expects to acquire around 40 centres in 2020.
For more information on the Q3 2019 results please click here.