Nido Education Limited - 2024 Half-Year Financial Results and Future Outlook
NIDO EDUCATION LIMITED (NDO) Share Update August 2024 Thursday 15th
Nido Education Limited Announces 2024 Half-Year Financial Results
Nido Education Limited (ASX: NDO) has released its financial and operational results for the first half of 2024, showcasing steady revenue and EBITDA growth while addressing sector challenges and future plans.
Instant Summary:
- First half revenue of $73.7 million and EBITDA of $7.5 million.
- Forecast full year dividend of 5.8 cents per share, payable in March 2025.
- CY24 Centre EBITDA forecast of $33.1 million remains in line with expectations.
- Softening of new enrolments due to cost of living pressures and work-from-home trends.
- Strong enrolment enquiries, with over 400 per week.
- Delay in opening 14 new centers from CY24 to CY25 due to construction issues.
- Federal Government's 15% pay increase for childcare workers expected to boost labor supply.
Financial Performance
Nido Education Limited reported a revenue of $73.7 million and an EBITDA of $7.5 million for the first half of 2024. These results reflect the company's successful execution of its strategic plans.
Despite the challenges, Nido has forecasted a full-year dividend of 5.8 cents per share, payable in March 2025, maintaining a 65% payout ratio. This dividend payment will not hinder the company's growth through acquisitions.
Operational Insights
The company's updated CY24 Centre EBITDA forecast of $33.1 million aligns with the Prospectus (PDS) forecast. While some centers are still maturing, full trading performance is expected by CY25.
However, the sector has seen a recent softening in new enrolments due to cost of living pressures, continued work-from-home trends, and a shortage of qualified employees. This has impacted Nido's previous expectation of outperforming the PDS forecast.
Growth and Expansion
Nido's growth remains promising, with 13 open centers in the incubator trading up well. Up to four centers are on track to meet acquisition criteria by the end of CY24, and up to ten by June 2025.
However, the opening of 14 new centers has been delayed from CY24 to CY25 due to construction industry issues, resulting in a revenue and EBITDA shortfall of $3.5 million. Despite this, the pipeline for new centers remains strong, and the company aims to achieve a sustainable rate of 20 center openings per annum by late 2025 or early 2026.
Sector and Government Support
The Federal Government's recent announcement of a 15% pay increase for childcare workers is expected to attract more labor into the industry, enhancing Nido's ability to convert waitlists and increase occupancy and revenue.
The government's commitment to supporting working families by expanding center capacities further reinforces Nido's growth potential.
The financial results and operational updates suggest a stable outlook for Nido Education Limited, despite some delays and sector challenges. The dividend forecast and strong enrolment enquiries indicate investor confidence. The Federal Government's support for the childcare sector is a positive development that could enhance labor supply and operational efficiency.
Investor Reaction:
Analysts are likely to view Nido's steady financial performance and strategic growth plans positively. The delay in new center openings may raise some concerns, but the strong pipeline and government support should mitigate these worries.
Conclusion:
Investors should keep an eye on Nido's progress in opening new centers and the impact of government initiatives on the childcare sector. The company's strategic focus on growth and acquisitions positions it well for future success.