Mayfield Childcare’s HY26 Revenue Falls to $41.3 Million with Underlying EBITDA Loss of $0.8 Million

Revenue Decline and Statutory Loss Deepen

Mayfield Childcare Limited (ASX:MFD) posted a 6.0% drop in revenue to $41.3 million for the half year ended 30 June 2026, weighed down by lower average occupancy across its 45 centres despite fee increases. The statutory net loss after tax widened sharply to $31.9 million from $21.9 million in the prior corresponding period, driven largely by $29.0 million in non-cash impairments including a $10.9 million goodwill write-down and an $18.1 million impairment on right-of-use assets linked to a centre closure.

Operational Resilience Amid Occupancy Challenges

Underlying Centre EBITDA fell 11% to $3.1 million, but the margin held relatively steady at 7.5%, only slightly down from 7.8% in HY25. This stability was achieved despite inflationary cost pressures and the occupancy dip to 51.3% from 52.6% a year earlier. Notably, wage-to-revenue improved by 1.9 percentage points to 61.5%, reflecting tighter roster discipline and reduced reliance on agency staff, even as occupancy softened.

Spot occupancy showed encouraging signs of recovery, rising 5.1 percentage points to 54.4% in late August, surpassing the prior year’s post-seasonal rebound by 0.7 points. This uptick coincides with a 49% surge in new-family pre-enrolments driven by renewed enrolment accountability at centre level and increased local marketing efforts, providing a promising forward pipeline with an 82% pre-enrolment-to-commencement conversion rate.

Strategic Restructuring and Portfolio Rationalisation

Mayfield is actively reshaping its operations to arrest earnings pressure. The Group has targeted three underperforming centres for portfolio actions, including divestments and a lease non-renewal leading to a centre closure expected in November 2026. These moves aim to cut annualised earnings drag by approximately $1.2 million.

Alongside portfolio pruning, a corporate restructure and simplified operating model are projected to reduce annualised corporate costs by about $1.4 million. Combined, these initiatives are expected to deliver $2.6 million in annualised structural earnings improvement once fully implemented, a benefit not yet reflected in HY26 results.

Mayfield 360 Expansion and Takeover Developments

The Group’s allied-health arm, Mayfield 360, achieved NDIS provider certification in August 2026 and has begun servicing participants. While still in early stages, management is focused on building participant numbers, clinician utilisation, and service quality across the network.

Meanwhile, takeover activity remains a significant backdrop. Embark Early Education’s offer closed during the period, with Embark now holding 49.8% of Mayfield’s issued capital. The Company incurred additional legal and advisory expenses responding to the bid, and the Board has committed to keeping shareholders updated on material developments.

Liquidity and Capital Management

Mayfield’s cash position was $0.2 million at 30 June 2026, up slightly from $0.1 million six months earlier, while drawn debt against its Westpac facility increased to $5.4 million from $1.8 million. Post-period, the Group completed a $3.0 million entitlement offer, strengthening working capital and liquidity. The Westpac facility was extended to September 2027 with revised occupancy-related covenants better aligned to current trading conditions.

After withdrawing FY26 earnings guidance in July due to sector challenges, Mayfield plans to provide updated guidance in September following further occupancy and operational assessments.