ABC Learning (ABS) Update

Submitted by Craig Strzelecki on 11 April, 2007 - 17:49

ABC Learning (ABS) has seen their shares trade in a 20 cent range after the recent half year report failed to excite investors. ABS delivered a meaningful improvement of 9.4% in EBITDA per Australian centres despite an environment of rising costs. Analyst Macquarie Research Equities expects occupancy gains towards 92% where the driver for fee rises which were limited to 3% on 1 July. ABC Learning (ABS) revenues were up by 266% to $446mm, EBIT by 52% to $99m and adjusted earnings by 43% to $54.7m. An EPS decline of 5% was recorded due to the number of shares increasing by 51% on pcp. A fully franked interim dividend of 8cps was declared compared to 7cps in pcp. FY07 EPS guidance is unchanged at 36cps with at least 20% growth predicted for FY08. An election year and childcare is a vote winner. Last year, the federal government assisted competitors to long day care with extra funding for family day care and after school hours care. Despite Australia being relatively generous with childcare, subsidising around 50% of the cost compared to the USA at around 20%, the market analyst believes that it is possible that both sides of politics may throw more money at the sector in what is expected to be a very close election.

ABC Learning Limited is listed on the Australian Stock Exchange (ASX) under stock code ABS. You can view their investor website here. ABS was listed on the ASX on 21 March, 2001. Sallyanne Atkinson is the Chairman for ABC Learning and Edmund Groves as well as Dr Le Neve Groves, Mr Martin Kemp are the CEO's of ABS. The company provides formal child care services and education around the world. Browse for Australian stockbroker recommendations. Check your charts and good luck with your share trading!