The Evolve Education Group Ltd (ASX: EVO) share price dipped lower today. This follows the childcare company's trading update and earnings guidance for FY21 and FY22.
At today's market close, the Evolve share price finished at 83 cents, down by 2.92%.
Trading update
In today's release, Evolve announced it's achieved a mixed performance across its Australian and New Zealand markets.
For the week ending 23 May, Evolve said its Australian operations were robust. New South Wales and Victoria achieved occupancy rates of 87.8%, with more than 80% in Queensland. The company explained that's a positive result given the business usually records a better performance in the second half.
Across the Tasman, New Zealand has failed to increase occupancy rates post COVID-19. Over the same time period, occupancy rates in NZ stood at roughly 70%.
Evolve has blamed teacher shortages for the performance due to the lengthy international border closures. It said the entire Early Childhood Education (ECE) sector had been affected but it believed this would self-correct when borders re-opened.
Currently, Evolve operates 115 early education centres in New Zealand and 20 in Australia.
On a positive note, the company expects to continue achieving material cost savings through streamlining its centre-based and support office costs.
Evolve declared a cash balance of around NZ$48 million (A$44.7 million) at the end of May.
Guidance for FY21 and FY22
Looking ahead, Evolve provided an earnings guidance based on current market conditions in Australia and New Zealand.
For the year ending 31 December 2021 (FY21), Evolve expects underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be between NZ$16 million (A$14.9 million) and NZ$18.5 million (A$17.2 million).
In the year ahead, ending 31 December 2022 (FY22), EBITDA is forecast to be around NZ$23 million (A$21.4 million) and NZ$25 million (A$23.2 million).
Evolve share price summary
It's been a disappointing 12 months for Evolve investors, with the company's shares down slightly on this time last year. When comparing year to date performance, the Evolve share price has fallen by more than 30%.
Evolve has a market capitalisation of roughly $140 million, with approximately 159.5 million shares on its registry.
