G8 Education Limited · ASX:GEM
G8 Education — Investor Presentation (February 2011)
23 slides from G8 Education's investor presentation, Feb 2, 2011
Slide 1: Market Briefing
For personal use only Market Briefing G8 Education Limited (ASX:GEM) 2 February 2011
Slide 2: Overview
Overview For personal use only Following the acquisition of Cherie Hearts and completion of the Kindy Patch and Headstart transactions, G8 Education’s child care portfolio will comprise: Australia 126 owned child care centres 20 managed child care centres FY11 Revenue: A$125M FY11 EBIT: A$
Slide 3: Key Statistics
Key Statistics For personal use only Current share price $0.95 (at close of trade on 31 January 2011) Market capitalisation based on 162,304,537 shares on issue $154.19 million (at close of trade on 31 January 2011) 1 July 2010 to 31 January 2011 Price history: Page 3
Slide 4: The vision of G8 Education
The vision of G8 Education For personal use only • A portfolio of outstanding child care brands: • Cherie Hearts • Early Learning Services • World of Learning • Bourne Learning • Community Kids • Holiday Club • Kindy Patch • Headstart • Focus on the importance of child care • Make good centres great
Slide 5: G8's mission
G8’s mission For personal use only Our mission is to be Australasia’s leading provider of high quality, developmental and educational child care services, and to achieve this through growth and sustainability: Page 5
Slide 6: Singapore Update
For personal use only Singapore Update Page 6
Slide 7: Acquisition Update: Cherie Hearts
Acquisition Update: Cherie Hearts For personal use only • On 28 October 2010, G8 Education announced the acquisition of Cherie Hearts, Singapore’s largest private provider of child care services. • Chris Scott, Managing Director of G8 Education will oversee the Singapore operations, as well as exist
Slide 8: Acquisition consideration
Acquisition consideration For personal use only • The purchase price of Cherie Hearts is A$19.2M*(including the assumption of debt). • The forecast EBIT for Cherie Hearts for the 2011 calendar year is A$4.3M*. This represents: • an EBIT purchase price multiple of 4.47 times; and, • a tax affected mu
Slide 9: Singapore Centres
Singapore Centres For personal use only Location Total centres Owned centres 18 Franchised centres in operation 51 Franchised centres pending confirmation of licence 20 Total centres 89 Total licence capacity 5,208 Page 9
Slide 10: The anatomy of a child care centre in Australia and Singapore
The anatomy of a child care centre For personal use only in Australia and Singapore Australia % of revenue Singapore % of revenue Licensed places 75 88 Occupancy 80% 90% Fee for service A$65 per day S$720 per month Days 250 days 12 months Revenue per centre A$975,000 S$685,000 Employee costs A$585,0
Slide 11: Supportive environment
Supportive environment For personal use only • The Singaporean Government introduced a Baby Bonus scheme in 2001 • In 2008, the Government announced the enhanced Marriage and Parenthood Package which enhanced the one off baby bonus and the Government matching contribution to bank accounts opened for
Slide 12: Cherie Hearts: Awards
Cherie Hearts: Awards For personal use only • Cherie Hearts Group has received more than 30 national awards over the past 5 years: Page 12
Slide 13: Australia Update
For personal use only Australia Update Page 13
Slide 14: Australian operations
Australian operations For personal use only • The trading environment continues to be buoyant with the Australian centres’ occupancy for the year expected to average 76‐80%. • Long Day Care rate increased 1.96% in January against the forecast of 1.50%. • LDC Occupancy like for like to this time last
Slide 15: Capital structure
Capital structure For personal use only Shares on issue 162,304,537 Options over unissued shares (250,000 vest in 2012) held by Chris Sacre 250,000 Debt Current debt drawn – National Australia Bank (Facility $36,843,000) $15,543,000 Debt to be assumed on acquisition of Kindy Patch announced 18 Augus
Slide 16: Australian Centres
Australian Centres For personal use only Total Australian centres State (assuming completion of all announced acquisitions as at 31 January 2011) Queensland 69 New South Wales 46 Victoria 9 Australian Capital Territory 5 South Australia 15 Western Australia 1 Tasmania 1 Total centres (including mana
Slide 17: 2010 Guidance
2010 Guidance For personal use only 2010 Guidance 2010 Guidance Independent Experts Report Variance AUD$ million AUD$ million Revenue 66.43 57.84 +14.8% Expenses 58.43 51.68 +13.1% Earnings Before Interest and Tax 8.00 6.16 +49.3% Interest 1.30 0.95 +36.8% Net Profit Before Tax 6.70 4.27 +56.9% Net
Slide 18: Acquisition of Headstart
Acquisition of Headstart For personal use only • Headstart commenced in 2007 and has grown to 8 centres based in Sydney, with the exception of the latest one that opened last year in Griffith. We will integrate these centres into our existing network without the need for any additional support staff
Slide 19: 2011 Guidance
2011 Guidance For personal use only 2011 Guidance 2011 2011 Guidance for Australian Guidance for for the Group centres Cherie Hearts AUD$ million AUD$ million AUD$ million Revenue 125.63 16.70 142.33 Expenses 106.28 12.40 118.68 Earnings Before Interest and Tax 19.25 4.30 23.55 Interest 2.75 0.30 3.
Slide 20: Board and Management Team
Board and Management Team For personal use only Jenny Hutson, Chris Scott, Chairperson Managing Director B.Com, LLB, FAIMM, MAICD B.Econ (Hons) Craig Chapman, Brian Bailison, Chief Executive Officer Non‐Executive Director B. Com., A.S.C.P.A., C.S.A. B.Com., B.Acc (Cum Laude), ACA Chris Sacre, Chief
Slide 21: Substantial shareholders
Substantial shareholders For personal use only Shareholder Number of Shares Percentage holding Wallace Infrastructure Pty Ltd 28.9 million 17.8% Perpetual Nominees Limited and subsidiaries 21.1 million 14.1% Paradice Investment Management Pty Ltd 9.8 million 6.03% Northcape Capital Pty Ltd 9.0 milli
Slide 22: Contacts
Contacts For personal use only Jenny Hutson, Chris Scott, Chairperson Managing Director T: 07 3009 9888 T: 07 5581 5306 E: jhutson@wellcap.com.au E: chris.scott@g8education.com Craig Chapman, Chief Executive Officer T: 07 5581 5341 E: craig.chapman@g8education.com Page 22
Slide 23: Disclaimer
Disclaimer For personal use only • This presentation has been prepared by G8 Education Limited based on the information available to them. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions