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Early Education, a sector to watch as post COVID-19 recovery gathers steam
- Published March 23, 2021 12:00AM UTC
- Publisher Wholesale Investor
- Categories Company Updates
The early education and child care sector has weathered the COVID-19 storm extraordinarily well after a wave of Government funding underwrote its survival and confirmed its status as an “essential service” within the Australian economy.
A total of $2.6 billion was distributed under the ECEC Relief Package and Transition Payment schemes which together underwrote the survival of a sector that includes around 13,000 different licensed premises, all committed to caring and educating children.
As the COVID-19 threat recedes the sector is well-positioned to participate in the recovery that is currently underway.
Early education and child care are seen as a core part of the economic recovery as it facilitates workforce participation for both mums and dads by enabling them to leave their children in safe hands while they go to work.
However, there are still some areas of challenge that the sector will need to work through, particularly around working from home trends that impacts both suburban and CBD centre catchments and affordability which remains an ongoing issue for some families.
It is too early to tell to what degree this will impact short demand but what is more clear is that any demand compression, will be easily matched by a reduction in new supply. The long lead times between development approval for a centre means that it is likely that the COVID-19 impact on the supply side will start to be felt in earnest in early 2022.
This bodes well for supply and demand dynamics, which will also get a boost as borders reopen and migration trends reassert themselves.
That being said, it is important to recognise that early education and care is more attuned to local catchment dynamics then generalised macro trends.
Centres embedded in their communities, with strong teams and quality practices will always have families keen to enrol their children. The nature of the operating environment lends itself to smaller organisations that have that personal and human touch. These are the groups that thrive year in year out simply on the strength of word of mouth and community reputation.
With the sector in robust financial shape, the scene is set for a period of sustained outperformance as Australia and the world emerge from the COVID-19 pandemic with centres of all stripes poised to benefit.
About Early Education Holdings
Early Education Holdings* (EEH) is a newly established partnership with an ambitious vision to acquire and develop local, community-focused childcare centres across the Eastern seaboard of Australia. Childcare centres are a stable, government-backed business funded by both Federal and Sate & Territory governments, and with the outbreak of COVID-19 contributing to the recent fall in attendence across the sector, EEH has identified the neglected and highly fragmented mid-sized market (40-75 places) as ripe with opportunity.
EEH would like to invite investors to participate in co-owning TWO established childcare centres in urban NSW, which represents a foundational milestone and the commencement of the EEH growth journey.
EEH’s Executive Team is powered by HEVEN, a business management company that makes SME ownership a reality for individuals looking for a low touch approach to income and portfolio growth. Founded in 2016 by one of the partners, HEVEN takes an industry-agnostic approach and specialises in sourcing, acquiring and managing government funded and high consumer demand SMEs, with an established revenue, across Australia.
*Registered entity name to be confirmed