Think releases market update, reassures on trading and COVID-19 concerns
Think Childcare have released a market update in which they confirm that occupancy across their like for like (LFL) portfolio has continued to trend upwards in the first 10 weeks of the year and thus far there has been no significant negative impacts on demand due to COVID-19 related concerns.
The 53 services that make up the LFL portfolio are tracking around 1.2 per cent ahead of the same period last year in terms of days sold, which is more or less consistent with the 1.2 per cent that the company reported at their Full Year results.
As well as providing an occupancy update, Think highlighted the degree of flexibility embedded in their workforce that could be called upon should operating performance step lower for any reason going forward.
In particular, they confirmed that 60 per cent of their workforce are permanent employees, with an average of 55 hours annual leave accrued per employee, and outlined a staged approach to rebasing their workforce as required, starting with a voluntary basis, followed by moving educators between services, then reducing part time and casual, and then calling on annual leave.
In addition, Think highlighted that 62 per cent of their income was received via the Child Care Subsidy (CCS). Under the CCS, children have 42 days of allowable absences without documentation, and unlimited allowable absences with a medical certificate, before their CCS is compromised.
Think further suggested that, going forward, the Federal Government are likely to be proactive in supporting families with the cost of care, as they were with bushfires, to support families hardest hit.
According to internal modelling, the likely impact on profitability should a three week closure incident actually take place would see revenues fall by 38 per cent, and wages fall by 55 per cent, which, assuming fixed overheads are the same and variable overheads eliminated, would see service margins maintained at 20 per cent.
From a hygiene perspective, Think have also reconfirmed their obligations under the National Quality Standards and included as an Annexure references to the Group’s hygiene practices and post COVID-19 action plans.
To read the statement, and more information about the hygiene practices and post COVID-19 action plans, please click here.
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