Evolve Education provides trading and guidance update as 2021 winds down

Evolve Education Group has provided an update on current trading across both its Australian and New Zealand networks as well as a financial guidance update ahead of the end of their financial year end on 31 December 2021. 

In the week ended 28 November 2021 the Group’s New Zealand network of 110 centres, generated $213,000 of earnings before interest, tax, depreciation and amortisation (EBITDA) at an average occupancy of 69 per cent. 

Its Australian network of twenty three centres generated EBITDA of $338,841 at an average occupancy of 86 per cent. 

Both jurisdictions have substantial cash balances on hand and are performing close to or better than reported in the Group’s last trading statement released in June 2021. 

As part of the current trading update Evolve reconfirmed that their acquisition processes had recommenced as the implementation of the COVID Protection Framework in New Zealand provides greater clarity and comfort on the COVID-19 impact going forward. 

From a guidance perspective FY 2021 earnings are expected to be between $11.5 million and $13.0 million, down from between $16 million and $18.5 million posted in June 2021 with Evolve confirming that the difference between results is due almost entirely to the financial effects of revenue losses in New Zealand due to lockdowns.

“The lockdowns lead to an EBITDA loss of approximately $6.0 million in FY2021 mainly due to a loss of parent fees and not qualifying for wage subsidies (due to a change in the eligibility thresholds by the NZ Government) while staff wages were paid in full throughout,” the statement reads. 

“Adding back the NZ loss due to COVID-19 implies that consolidated EBITDA for 2021 would have likely fallen within the range of $17.5 million to $19.0 million of lockdowns had not occurred in New Zealand. This is consistent with the June 2021 guidance.”

Guidance for FY 2022 has been maintained at between $23 million and $25 million subject to there being no material COVID 19 related issues in FY22.