Mayfield releases delayed FY22 results presentation as earnings boosted by Genius acquisition

Early childhood education and care (ECEC) provider Mayfield Childcare has released its delayed FY2022 results presentation in which the group reports a jump to revenues and earnings driven by the acquisition of Genius centres in the previous year. 

 

Mayfield generated revenues of $70.5 million, up 76 per cent from the previous year and centre earnings before interest, tax, depreciation and amortisation (EBITDA) of $11.3 million, up 68 per cent year on year. 

 

The presentation noted that FY2022 was a “transformational year with 14 new centres integrated, over 400 staff onboarded and a step change increase in the Group’s scale of operations” achieved. 

 

It also highlighted that it was a “challenging start to the year with the Omicron outbreak which impacted the Queensland portfolio. Despite lingering COVID-19 effects and a shortage of labour, the Group delivered underlying EBITDA of $11.3 million.”

 

Monthly wages to income metrics anchored despite occupancy fall to 69%

 

Tighter rostering and active wage management across the enlarged group saw wages as a percentage of revenue decrease to 56.3 per cent from 57.1 per cent in the prior year with overall all wage costs closing the year at a substantial $39.7 million. 

 

Additional savings are expected to be generated in 2023 with the group highlighting that the 2022 results were impacted negatively by the transitional management issues associated with the integration of Genius centres which will not repeat this year. 

 

From an occupancy perspective, first half occupancy was impacted by the Omicron outbreak which had an impact on the Queensland portfolio but improved trading conditions in the second half of the year resulted in full year occupancy of 69 per cent, down from 70.1 per cent in 2021. 

 

The Group noted that “Labour shortages persisted throughout the year and impacted the Group’s ability to meet demand and drive further organic occupancy growth.”

 

Support office costs expected to rise and consolidation of brands to proceed

 

Total support office costs in FY2022 were $4,058 million, up from $2,457 million in FY2021 with both adjusted to reflect the misappropriation of funds revealed in the recent KordaMentha commissioned report into financial irregularities at the Group.

 

Total support office costs now stand at 5.76 per cent of revenue, down from last year but are expected to continue to rise as Mayfield invests in people, systems and processes in line with its stated objective of building capability in support office. 

 

“Management is committed to improving the overall control environment and enhancing the Group’s head office capability which will require further investment in people and infrastructure,” the company said. 

 

In a further initiative Mayfield has confirmed that it intends to transition its current Mayfield centre portfolio, which consists of a collection of 23 different brands, to a new Group wide brand, Mayfield Early Education identity. 

 

2023 outlook remains favourable as further Genius centre uplift filters through 

 

Looking ahead, Mayfield remains committed to executing on its four pillar “foundations for growth” corporate strategy which includes people and culture, systems and processes, organic growth and measured expansion objectives. 

 

Further performance uplift is expected of the Genius portfolio in FY2023 through active management of wages and by optimising the mix of government incentives set to be implemented in July with management also aiming to create value through further acquisitions.

 

The single brand strategy is expected to drive organic growth and will provide an opportunity for the Group to position itself as a leading national provider of quality education and care – a national brand with deep roots into its community.

 

To review Mayfield’s FY2022 results presentation click here and to learn more about its upcoming AGM click here.