|
|
|
Temasek's
Australian child care company suffers losses
Vanessa
Burrow
Brisbane Times
26 Feb
08
http://www.brisbanetimes.com.au/articles/2008/02/26/1203788307959.html
Shares
of child care company ABC Learning lost almost two-thirds of
their value after a poor earnings result surprised
investors.
The stock fell as much as 66 per cent to a low
of $1.15 this morning, and was worth 41.43 at midday.
ABC
Learning said it is in compliance with all financial
convenants.
Dealers said there was talk in the market that
hedge funds were shorting ABC stock on concern over its
borrowings.
The company, which has expanded rapidly in the
United States, said in a statement to the stock exchange that it
was trading profitably and in line with its forecasts.
On
its $1.4 billion syndicated bank loan, ABC said it was in
compliance with all covenants. These related to shareholders
funds, funding ratios and gearing ratios.
Covenants did
not include a market capitalisation or share price covenant, it
said, adding that it had made the statement in response to
"market speculation and rumours''.
ABC on Monday
reported a 42 percent fall in first-half profit to $37.1 million,
but reaffirmed its forecast of 15 percent earnings growth for the
full year.
It said the result reflected the seasonality of
earnings contributions from its US childcare centres, where there
was a bias towards the second half.
ABC Founder Eddy
Groves holds a 4.3 percent stake in the company, or 20.2 million
shares, according to Reuters data.
ABC also said it had no
plans to issue equity for 12 months.
ABC's shares have
lost more than 80 percent of their value since last May, when
Singapore state investment firm Temasek Holdings bought a 12
percent stake at $7.30 a share.
In yesterday's results,
earnings per share fell 51%, from 16.2 cents a share in 2006 to
7.9 cents a share in 2007.
But income rose 66% to more
than $1.1 billion.
ABC Learning operates child care
centres in the US, the UK, New Zealand and Australia.
Chief
executive officer Eddy Groves said yesterday revenue and margins
were improving in all areas, despite the ''heavily skewed''
result.
However, he said the company was disappointed with
its investment in Funtastic, a toy and clothing
manufacturer.
ABC Learning will pay a fully franked
interim dividend of 8 cents per share on April 4. Shareholders as
of March 20 will receive the dividend.
Childcare
mogul loses $45m in two hours
Liliana
Molina
Herald Sun
26 Feb
08
http://www.news.com.au/heraldsun/story/0,21985,23278195-31037,00.html
Childcare
mogul Eddy Groves has lost more than $45 million after stock in
his company slumped more than 60 percent this morning.
The
Brisbane-based chain yesterday reported net profit has fallen 42
per cent a result well below analysts' expectations.
However,
the sell-off today was prompted by concerns Mr Groves, who is the
owner of the Brisbane Bullets basketball team, may be forced to
sell some of his stock in the company to cover margin loans.
Analysts yesterday said they also were concerned about
the $1.7 billion level of debt and a major bank is believed to
have $600 million of exposure to ABC.
ABC has been
expanded rapidly to have more than 2300 centres across three
continents - including more than 160 in greater Brisbane alone -
and yesterday stunned analysts by releasing their results after
the market closed and refused to speak directly to the media.
Shares were trading down $2.31 at $1.43.
ABC's
major stakeholder is the Singaporean government investment arm
Temasek, with a 12.3 per cent stake, closely followed by
investment bank Lazard Asset Management and the Packer
family-backed Challenger Financial Services.
Former
Brisbane City lord mayor Sallyanne Atkinson is the chairman and
former Federal MP Larry Anthony is a board member.
The
company is likely to come under scrutiny from the Australian
Securities Exchange for failing to alert shareholders of the
larger than expected slump in net profit.
ABC shares have
been hammered over recent months on concerns ranging from its
dilatory capital raisings, a slowdown in the US and hedge fund
trading.
Revenues for the six months rose 66 per cent
from $667.8 million to $1.1 billion. The accounts show revenues
included an extra $73.3 million in fees from childcare developers
to "support centres during occupancy growth".
No
such fees were earned in the previous half but ABC did highlight
securing a new developers' model last year.
|
|
