Evolve Education Confirmed The Earnings Guidance For FY2019; Stock Surged Up by 40.625%

  • Apr 05, 2019 AEDT
  • Team Kalkine
Evolve Education Confirmed The Earnings Guidance For FY2019; Stock Surged Up by 40.625%

Evolve Education Group Limited (ASX: EVO), a provider of early childhood education in New Zealand, confirmed that the company’s earnings for the financial year ended 31 March 2019 (FY19), would be within the guidance range. The company provided the guidance range at the time of its half- year results declared in November 2018.

As per the guidance provided by the Evolve Education Group, during the half yearly- results, the underlying EBITDA for FY19 was expected to be in the range of $12m to $14m. The company, at present, has started with the preliminary work in respect of the financial results for the year. The guidance for underlying EBITDA has lessened to a range of NZ$13.2 million to NZ$13.6 million.

The board of Evolve was undertaking a capital management review in November last year.

For the six months period ending 30 September 2018, the company generated a total income of $71.037 million. The net profit after tax before non-recurring items was $4.6 million in 1HFY2019, which stood at $7 million in its previous corresponding period. The underlying operating earnings for the period was of $9.1 million in 1HFY2019, which was $12.5 million in the previous corresponding period. After the impairment charge in respect to carrying value of goodwill, the period reported a net loss of ~ $27.5 million. During the period, the company adopted a three-year business turnaround plan.

Further, the company’s announcement on 28 November 2018, also covered that the board will be undertaking the review of the capital management strategy of Evolve Education Group Limited which they claimed to conclude by 2019’s first quarter.

The balance sheet of the company reported a fall in its net asset base from $168.886 million in the 1HFY2018 to $125.744 million in 1HFY2019. The fall in the net asset was driven, by a decrease in the total asset from $236.277 million in 1HFY2018 to $192.448 million in 1HFY2019.

During the period, there was a net cash outflow of $17.278 million. The primary source of the cash outflow under these operating activities, was due to payments to suppliers, as well as employees along with the taxes. The net cash inflow through the investing activities was $1.334 million. The cash inflow was through the receipts from the sale of land and buildings. The company generated $14.673 million through the financing activities, where the source of cash inflow was through bank borrowings. By the end of the 1H FY2019, the net cash and cash equivalent with Evolve Education Group Limited was $4.091 million.

In the previous six months, the shares of Evolve Education Group gave a negative return of 68%. By the end of the trading session on 5 April 2019, the closing price of the stock was A$0.225, up by 40.625% as compared to its previous closing price. Evolve Education Group holds a market capitalization of A$28.77 million with approximately 179.8 million outstanding shares.


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