Evolve Education Group has completed the $11.8 million acquisition of four childcare centres in Melbourne in a move the New Zealand and Australian operator says will add $10.8 million of annualised revenue.
Evolve, which in May raised about $60 million in capital, says the acquisition of the centres with a total capacity of 384 children was funded from existing cash reserves.
“The acquisition of these premium centres is an excellent start to our growth strategy in Australia and we are excited about future opportunities currently present in the Australian market,” Evolve managing director Chris Scott said.
Shares in the company climbed by as much as 7.1 per cent to 11.25 cents in early trade on Tuesday, and were still 4.76 per cent higher at 11 cents by 1347 AEDT.
The company’s stock is still nearly half the value it was a year ago, and is 78 per cent down on the all-time high of 51.79 cents it reached in the months following its December 2014 listing on the ASX.
The company’s net loss ballooned from $NZ4.2 million to $NZ101.6 million in FY19, mainly due to $NZ107.1 million in goodwill impairments, while same-centre occupancies declined by 2.0 per cent over the year.
Mr Scott, who is Evolve’s largest shareholder with about 19 per cent, was elevated from director to chief executive in August following the resignation of Roseanne Graham, who had overseen the development and early stages of a three-year turnaround plan.
Director Chris Sacre was subsequently named manager of the company’s Australian operations, while Timothy Wong was named manager of the company’s New Zealand business last week.