Veteran childcare centre entrepreneur Mathew Edwards has made a comeback on the ASX with the low-key listing this morning of his latest venture, Nido Education (ASX: NDO).
Edwards, the founder and former CEO of Think Childcare, is aiming to scale up Nido - which means 'nest' in Italian - following a $99 million capital raising that will support the acquisition of 24 childcare centres, taking the company’s portfolio of owned and operated centres to 52.
The company, valued at $219 million upon listing, was founded by Edwards following the sale if Think Childcare in 2021 to UK-based Busy Bee.
Busy Bee won Think Childcare for $130 million following a bidding war with Alceon Private Equity.
Edwards has grown the Nido business since then through childcare centre development and third-party incubator agreements.
Edwards, who founded Think from the acquisition of childcare centres from the failed ABC Learning Centres, says Nido’s strategy is to continue growing through acquisitions from its incubator agreements, targeting the development of 20 to 30 new centres per year.
Under these agreements, Nido will create a pipeline of new centres that the company has an exclusive call option to acquire.
Nido’s primary inclubator is NAED, an externally owned entity that received equity funding of $25 million from private investors through Alceon Private Equity. Nido is also providing an interest-bearing loan facility of up to $25 million.
“We operate and develop early schools in suburban Australia, delivering families affordable, high-quality early education,” Edwards says.
“Completing the capital raise allows Nido to continue to execute its growth objective, which is to increase the number of children that we can deliver high quality early education to.”
Nido delivered revenue of $87.2 million in calendar 2022, forecasting that this will hit $131.9 million this calendar year and $168.3 million in 2024.
The company has had three successive years of net losses after tax since CY20, including a forecast loss of $6.8 million for 2023 before bouncing into the black to the tune of $16.9 million in 2024.
Nido announced today that the company’s operational performance has been running ahead of prospectus forecasts in the third quarter of this calendar year and into the current quarter.
The company, which is targeting an average occupancy of more than 80 per cent for its childcare centres, says it is experiencing continued enrolment demand with a ‘significant number of families on our waitlist’.
It also has seen a lift in applicants seeking new roles in its centres and a corresponding increase in the recruitment of new teachers.
“New Nido services opened through incubation are trading well, with a number trading ahead of expectation,” the company says.
“Construction, fit out, and licencing of new Nido services are progressing well, with 32 services expected to be opened through incubation by 31 December 2024.”
Nido shares made a quiet debut on the ASX today, trading between their issue price of 99c to a high of $1 on light volumes.
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