Evolve posts smaller loss than forecast

Evolve Education Group reported a net loss of $8.1 million, or 12.9 cents per share, in the period May 20.

Evolve Education Group, the childcare operator that listed in December, reported a smaller annual loss than forecast in its offer document as it settled a series of acquisitions faster than anticipated, driving higher revenue.

The Auckland-based company reported a net loss of $8.1 million, or 12.9 cents per share, in the period May 20, 2014 to March 31, 2015, smaller than the $9.5 million forecast in its November prospectus.

Underlying earnings before interest, tax, depreciation and amortisation of $1.8 million was more than twice the $816,000 forecast, while revenue of $32.9 million was 14 per cent above the forecast.

"The result was driven by accelerated settlement of acquisitions and improved operational performance at the ECE (early childhood education) centres," chief executive Alan Wham said in a statement.

"Key metrics of occupancy and wages to revenue improved versus forecast."

Evolve completed 86 ECE centres in the period, one more than forecast, and has since bought another eight centres and has four more under contract.

The company raised $132.3 million in its December initial public offering to fund a series of acquisitions, including Lollipops Educare, the in-home childcare Porse Group, Wellington-based I-Kids and Christchurch-based Artemis Learning.

Chair Norah Barlow, formerly the chief executive of retirement village operator Summerset Holdings, said the company is on track to meet guidance for 2016, including its planned dividend intentions.

The prospectus forecast profit of $16.6 million in the year ending March 31, 2016 on sales of $136 million, an interim dividend payment of $4.6 million and paying 50 per cent of net profit in the 2016 financial year.

Evolve said it is investigating new centre developments and has enough headroom in its banking facility to pay for acquisitions.

The company posted an operational cash flow of $2.5 million in the period, and held cash and equivalents of $4.6 million as at March 31, with $90 million of bank debt undrawn.

The shares last traded at $1, unchanged from the IPO price.