Evolve to sell Porse after strategic review
Evolve Education Group has put its in-home childcare business Porse up for sale after a strategic review.
The early childhood provider gave its second full-year profit warning in February. The company also announced it is likely to write down goodwill on acquisitions and cut its dividend.
Chief executive Mark Finlay refused an interview request.
However, in a statement, Mr Finlay says the decision to sell Porse follows a strategic review of its fit with Evolve's core activity of centre-based early childhood education.
"The review has shown that the two businesses are serving quite different and distinct markets, with limited overlap between the two activities.
“Consequently, potential synergies between centre-based and home-based early childhood education have been limited."
Porse accounts for less than 5% of Evolve earnings, Mr Finlay says.
In February, Evolve, which also owns Pascals and Active Explorers, revealed its profit before one-time items is expected to be $11-12 million in the 12 months ending March 31, down from previous guidance of $14-15m.
After the warning, Mr Finlay told NBR enrolment numbers were "not quite firing."
Mr Finlay said the company is not looking to close any of its four or five underperforming centres but may look at selling one or two.
The company will retain its other home-based business, Au Pair Link, alongside its early childcare centres (ECEs) – Lollipops Educare and Leaps and Bounds.
Evolve went public in 2014, selling shares at $1 in an initial public offering.
The shares last traded at 52c, a 52% drop in the past year.
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