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Writer's pictureNoel Ong

Nido Education Targets Further Expansion as Australian Childcare Industry Thrives

Nido Education Targets Further Expansion as Australian Childcare Industry Thrives | Samso Insights


Early learning provider Nido Education Limited (ASX: NDO) made a strong impact during its October ASX listing, becoming the second-largest listed operator in the industry.  


The company raised $99.2 million by selling 99.2 million shares at A$1.00, delivering a market capitalisation of A$219 million.  


With the listing, Nido joins G8 Education, Mayfield Childcare, and Embark Education Group to become the fourth listed operator in the industry. 


Since then, the company used a significant portion of the funds raised to acquire 24 more childcare centres in Victoria, SA, and WA – taking its portfolio to 52 centres in the country.  

Nido traded steadily between A$0.90 and A$1.00, currently trading at A$0.93 with a market cap of 211.69 million. ( Figure 1) 


The company’s CY23 revenue from ordinary activities is up 61% to A$93.4 million, as it forecasts positive cash flows for at least the next 12 months. 


Figure 1: Share price chart (Source: Listcorp) | Samso Insights

Figure 1: Share price chart (Source: Listcorp)



More funds en-route 


Nido has plans to grow the network of early childhood centres through an incubator model with up to 32 more centres to be added to the portfolio in 2024. 


Last month, the company signed binding agreements with National Australia Bank (NAB) to establish a $ 67 million debt facility.  


The debt facility is intended to fund acquisitions over the medium term. 


Background 


Australia’s childcare industry is thriving, with revenue expected to reach A$17.2 billion by 2028-29, according to market researcher IBISWorld, driven by government support and extended attendance hours in 2023. 


Founded in 2021, Nido Education Ltd is a national owner, operator and manager of long-day early childhood education and care services, operating under the Nido Early School brand. 


The company boasts fifty-two early schools in communities across Australia (Figure 2). 

In addition, the company also manages forty-three centres on behalf of its partners.  

This makes a total of ninety-five centres Nido operates or manages, educating and to date, up to 8,361 children each day. 


Figure 2: Nido Early School Locations are in green with the number of locations labelled. (Source: Nido Website) | Samso Insights

Figure 2: Nido Early School Locations are in green with the number of locations labelled. (Source: Nido Website)



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Disclaimer


The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints.



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