Nido Education (NDO) H1 2024 earnings summary

Executive summary

• Achieved first half EBITDA of $7.5m, with consistent revenue growth and profit before tax of $7m, and net profit of $3.4m, reversing a prior year loss.

• Revenue for the half-year ended 30 June 2024 increased by 117.8% to $75.5m, with centre-based revenue at $74m, nearly 1.5x higher year-over-year, driven by acquisitions and maturing centres.

• Managing 99 centres, with 52 owned, and an average daily fee of $171 after discounts; 451,000–461,000 days of learning sold and average occupancy rate of 77%.

• Four new centres opened in the first half, generating $0.8m in establishment fees; up to 4 centres may reach acquisition metrics by year-end.

• CEO Renee Bowman resigned effective 26 July 2024.

Financial highlights

• Centre-based EBITDA of $12m, up from $1.1m year-over-year, with a 16% margin; group EBITDA (pre-AASB16) was $7.5m, compared to a loss of $1.9m in H1 CY23.

• Net profit after tax for H1 CY24 was $3.4m, reversing a $3.3m loss in H1 CY23; basic EPS was 1.47c.

• Net operating cash flows were $16.2m, up from $0.4m in the prior period; net assets at 30 June 2024 were $113m.

• Support office costs increased by $1.7m to $5.2m, mainly due to public company governance costs.

• Net debt at $1.2m, with plans to repay facility and increase acquisition funding capacity to $55m.

Outlook and guidance

• Full year EBITDA forecast at $23.2m; centre EBITDA forecast at $33.1m, consistent with Prospectus.

• Dividend of 5.8c per share expected, representing a 5.8% yield, payable in March 2025, with a 65% NPAT payout ratio.

• 14 centre openings and $3.5m in establishment fees delayed to 2025 due to construction timing.

• Average occupancy for CY24 forecast at 80%, slightly below previous 82% due to sector softening, offset by fee increases.

• Management expects positive operating cash flows for at least the next 12 months.