Embark Early Education (EVO) H1 2024 earnings summary

Executive summary

• Revenue grew 17.7% year-over-year to $34.4 million for 1H24, with underlying Australian centre EBITDA up 19.2% to $8.06 million.

• Net profit after tax from continuing operations rose to $2.49 million, up 4.3% year-over-year, driven by higher revenues and cost control.

• Five new childcare centres were acquired, adding 431 daily places and $2.6 million in revenue since acquisition.

• Fully franked dividends totaling $0.03 per share were paid in 1H24.

Financial highlights

• Centre revenue increased 18.3% year-over-year to $34.4 million; centre EBITDA rose 19.4% to $8.1 million.

• Operating EBITDA up 20.7% to $7.0 million; underlying EBITDA up 23.2% to $7.2 million.

• Net profit after tax attributable to shareholders was $2.49 million, up from $2.39 million in 1H23.

• Basic and diluted EPS doubled to 0.02 cents from 0.01 cents year-over-year.

• Interim and final dividends of 1.5 cents per share each, fully franked, totaling $4.79 million paid during the period.

Outlook and guidance

• Spot occupancy at 83.5% as of August 2024, with strong start to 2H24.

• Further centre acquisitions planned for 2H24; quarterly dividends expected to continue.

• Fee increases implemented to offset rising operational costs; educator shortages may impact some centres.

• Government funding a 15% educator pay increase over two years starting December 2024.

• No material events after the reporting date expected to affect future operations.