The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
GEM has announced the acquisition of 63 new centres from a variety of vendors, taking its total centre portfolio to 296.
The settlement price is approximately $104.7 million, which GEM believes equates to four times the forecasted EBIT of CY14 of $26 million. Having seen GEM report an NPAT of $15.7 million in the first half of 2013, expectations are high for the full year numbers when they are released on February 17.
GEM’s funding plans for the acquisition will be divided between existing cash reserves and debt with a settlement date of April 30. This deal will see GEM being able to house 21,792 early learning and preschool students per day, with the new centres adding 4254 extra positions.
With dual-income families becoming the norm, demand for early learning centres is only expected to increase and this is something GEM is well aware of, which is why it is investing heavily now in centre numbers. If, come February 17, the NPAT is aligning with this social trend, today’s record high may be replaced with another record.