The Evolve Education Group Ltd (ASX: EVO) share price is up 1.69% today after the company announced its CEO is retiring and that it has settled five of 10 recent child care centre acquisitions.
Evolve is a dual-listed company that now operates 132 childcare centres across Australia and New Zealand, with an additional five yet to be settled.
It announced the purchase of 10 Australian child care centres on 5 March, with a total licence capacity of 810 children per day. This resulted in an almost 20 cent jump in the Evolve share price this month, before falling again to its current price of $1.20.
Image source: Getty Images
Evolve Education share price on the rise
Today's movement is indicative of a steady recovery for the Evolve share price, which has risen from 71 cents per share at the beginning of November.
Evolve predicts that earnings before interest, tax, depreciation and amortisation (EBITDA) for these five centres will be $3.6 million per annum, and they will settle the remaining five centres by May. Evolve paid $27 million for the 10 centres.
The company's share price was hit hard by COVID-19 – after a 32% drop in childcare fees throughout the lockdown period – but has also fallen steadily over the past four years.
In 2017, Evolve's share price was more than $3.97 per share in 2017, but the company has suffered from unprofitability. These recent acquisitions were made possible by raising $35 million through the sale of notes, some of which went to repaying Australian debt.
The company has also suffered negative publicity recently. First, for a cancelled contract which would have cut teachers' full-time hours while requiring them to be on call. Second, for charging clients at its Lollipop childcare centre in New Zealand while it was unable to offer services due to the lockdown.
Evolve resuming dividends as new CEO search begins
Evolve recently announced it will resume dividend payments to shareholders this year, although it's yet to announce what they will be, after it last paid dividends of 2 cents per share in 2019, before halting them due to the COVID economic downturn.
Evolve also announced that its New Zealand CEO, Tim Cook, is retiring due to family reasons and returning to Australia, resulting from the lack of Trans-Tasman travel due to COVID-19.
The company also announced former First Steps General Manager, Craig Presland, will become Evolve's Chief Operating Officer.
