Think Childcare responds to “Return to CCS” roadmap with trading update
Think Childcare Group, has released a trading update in the wake of confirmation from Federal Education Minister, Dan Tehan of the roadmap for the early childhood education and care (ECEC) sector to move back to the Child Care Subsidy (CCS).
Commenting on the Transition Payment arrangements, Think Managing Director and CEO, Mathew Edwards, said “The transition payment provides us with a safety net for our revenue whilst our costs of labour will be aligned to our attendance. It gives us and the sector sufficient time to prepare for the new ‘normal’ in October 2020.”
With respect to current trading Think confirmed that occupancy was 74 per cent, with attendance at 64 per cent as at the week ended 5 June 2020 across the Group with Western Australia being the strongest geographic area with occupancies as high as 88 per cent and attendance 79 per cent.
This performance compares favourably to that of larger ASX listed ECEC provider peer G8 Education who reported current occupancy and attendance at 65 per cent and 52 per cent respectively in their own post announcement update released earlier in the week.
Notably, Think has also confirmed their expectation that occupancy is likely to fall by 11 per cent after “free care” ceases and the return to “paid care” begins.
However, they go on to note that the Transition Payment that they expect to receive, which will be equivalent to 25 per cent of their pre COVID-19 occupancy, of 17 per cent will be sufficient to offset the expected decline in occupancy of 11 per cent.
Looking ahead the company highlighted the following points supporting their view that the outlook for the sector remains substantially intact:
- The Child Care Subsidy System remains supportive from an affordability perspective with “families in the vast majority of Think’s services” paying as little as $18 per day for care.
- Alternate care options delivered by grandparents, family and friends have become less available due to COVID-19 health concerns which in turn increases demand for centre based ECEC services.
- ECEC remains critical to the Australian economy’s recovery as demonstrated by the Government commitment to the sector through the ECEC Relief Package and inclusion in the JobKeeper program.
To read the statement please click here.