Think reaffirms CY2019 EBITDA guidance in trading update despite dip in LFL occupancy
Think Childcare Ltd have reaffirmed underlying CY 2019 Earnings Before Interest and Tax (EBITDA) guidance of $13.8 million to $14.8 million, despite reporting a 1.3 per cent fall in like for like (LFL) days (the company’s preferred proxy for occupancy) sold compared to the same period last year.
The occupancy performance is a shade weaker than that reported at the half year results of 1.0 per cent lower than the prior period, and confirms to some degree the more challenging comparative second half trading environment reported by G8 Education at their recent update.
Within the Think portfolio of 41 LFL centres the fall in days sold was limited in the Groups’ flagship brand Nido centres, with 3 less days sold this year. However in their legacy brand Early Learning and Kinder services, the shortfall was materially higher at 26 days. NIdo transition services experienced a 12 day reduction.
From an EBITDA perspective the weaker enrolment backdrop was mitigated by a 5.9 per cent increase in daily average fees and an improvement in wage management, with wages as a percentage of revenue falling to 60.6 per cent compared to 61.2 per cent recorded last year.
The combination yielded an increase in service margin of 30 basis points or 0.3 per cent to 16.5 per cent thus far in 2019 which has underwritten this years 2019 guidance.
Elsewhere the company confirmed:
- the acquisition of 11 services from the Edhod receivers is on track to complete at the end of November
- the closure of two non aligned centres and;
- the opening of two other purpose built Nido centres.
To read the announcement from Think please click here.