G8 Education Limited (ASX:GEM) released upbeat operational results with revenue growth of 44% to $706 million for CY15.
The educational services company widened its profit margin with its profits up 68% to $88.5 million on the back of 44% growth in operational revenue for CY15. G8 Education delivered double digit earnings per share growth of 29% to 23.9 cents.
G8 Education’s Managing Director, Chris Scott commented on the company’s progress: “2015 was another year of significant progress for the Group. After a period of tremendous growth in 2014, 2015 has been a year where our priorities have been more evenly spread between growth, integration and service provision. In 2015 we acquired 44 early education centres.”
Successful integration of the acquisitions has yielded $150.4 million in Earnings before Interest Tax, up 51% over the previous year. As at 31 December 2015, the total number of centres has reached 489, with a combined licenced capacity of 35,221 places.
The group aims to boost ‘occupancy growth’ in its centres by executing G8 corporate model with an emphasis on first class care provision through on going investments. G8 Education also expects to enhance EBIT growth by maintaining revenue growth in excess of cost growth and exercising discipline at the support office cost level. Moreover, the company targets portfolio expansion as it aims to continue on acquisitions of earnings accretive premium child care centres.
For CY16, the company aims to refinance SGD$260 million in unsecured notes and acquire between $50 million and $150 million in centre acquisitions. Subsequent to the aforementioned strategies, the group aims to maintains net debt to EBITDA at or under 2-times.
The group also announced the resignations of Mr. Christopher Sacre, the Chief Financial Officer and Company Secretary.
Despite the optimistic announcement, GEM has declined 7% to $3.17 as at 11:50 AM (AEDT).
Author: Imran Valibhoy
Feb 22, 2016
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.