Evolve Education reports FY2020 results, maintains strategic focus for 2021

Evolve Education Group has released its financial results for FY2020 in which they reported strong year on year earnings gains and an ongoing commitment to remain focused on its core strategies in New Zealand and Australia. 

The Group reported 2020 revenues of $136.8 million and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $18.1 million compared to $8.2 million in the previous 12 month period which ended on 31 March 2020. 

With the Group now having completed its transition to a 31 December year end, the audited component of this year’s result was for the nine months ended 31 December which saw revenues of $102.6 million and underlying EBITDA of $15.7 million. 

Managing Director Chris Scott said “2020 was a challenging year with lockdowns and restrictions in New Zealand and Australia due to COVID-19.”

“The confidence of our families, the support of the Governments of both countries for the sector, the dedication of our employees, the acquisition of Australian centres in late 2019 and action taken to improve operations in New Zealand all enabled EVO to record a better result in the 9 months to 31 December 2020 compared to the previous financial year.”

Strategic objectives in both New Zealand and Australia on track

Mr Scott recapped some of the achievements of 2020 highlighting that occupancy in New Zealand has stabilised, support office functions streamlined, board fees reduced and discounting of fees curtailed. 

Overall support office costs for the nine month period to 31 December 2020 were $4.9 million compared to $9.7 million in the twelve months to March 2020 with centre wage costs on a pro-rated basis broadly similar reflecting the organisations commitment to New Zealand and Australian Governments Employee Guarantees during the COVID-19 support package periods. 

Mr Scott also noted that the acquisition of ten centres in Australia in 2019 added to the Group’s overall performance momentum in 2020. 

Strong balance sheet supports growth ambitions in 2021

After a year of higher than normal operating cash flows supported by Government COVID packages, support office cost optimisation and lower than normal acquisition spend combined with a $35 million debt capital raise in December 2020 Evolve finished the year in a strong financial position. 

Overall, cash levels as at 31 December 2020 were $59.2 million, with the company in a net cash position of $23.1 million after accounting for the $36.1 million of outstanding debt. 

Mr Scott said “The results reaffirm our action plans in both New Zealand and Australia, and our healthy balance sheet positions us well for acquisitions in Australia while we continue to progress operational improvements in New Zealand.”

Evolve have elected not to pay a dividend for the 2020 year.