Turnaround underway as Mayfield reports HY26 results and $2.6m structural earnings target
In its 2026 half-year results presentation, Mayfield Childcare (ASX: MFD) outlined a period of operational repositioning for the six months ended 30 June 2026, reporting revenue of $41.3m, down 6.0% on HY25, alongside a clear turnaround narrative built on improved labour efficiency and recovering occupancy.
Statutory NPAT of $(31.9)m was heavily impacted by $29.0m of non-cash impairment charges. Management pointed to a targeted ~$2.6m annualised structural earnings improvement, occupancy recovery from the February seasonal low, and post-period strengthening through a completed $3.0m entitlement offer and an extended Westpac facility to September 2027.
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HY26 financial results at a glance
The presentation distinguished operational performance from the non-cash statutory impact. Centre-level profitability held up despite lower occupancy, with the Underlying Centre EBITDA margin broadly stable at 7.5%, supported by a 9% reduction in centre labour costs.
| Metric | HY26 | HY25 | Change |
|---|---|---|---|
| Revenue | $41.3m | $43.9m | Down 6.0% |
| Underlying Centre EBITDA | $3.1m | $3.4m | Margin 7.5% vs 7.8% |
| Underlying Group EBITDA | $(0.8)m | $(0.1)m | Lower |
| Wage-to-revenue | 61.5% | 63.4% | Improved 1.9ppt |
| Statutory NPAT | $(31.9)m | $(21.9)m | Includes $29.0m non-cash impairment |
The $29.0m impairment was non-cash and comprised two components:
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Goodwill impairment of $10.9m, recognised following revisions to the occupancy outlook and discount rate.
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Right-of-use asset impairment of $18.1m, recognised in relation to a centre closure.
The Underlying Group EBITDA loss of $0.8m (HY25: loss of $0.1m) reflected lower revenue, increased marketing and enrolment investment, higher facility maintenance costs relating to centres undergoing Assessment & Rating, and costs incurred responding to the Embark Early Education takeover.
Why occupancy is the number that matters
In childcare, occupancy, the percentage of licensed places filled, is the core driver of revenue and margin because major costs such as rent and labour are largely fixed. When occupancy rises on a largely fixed cost base, the additional revenue flows disproportionately through to earnings.
Mayfield recorded average HY26 occupancy of 51.3%, compared with 52.6% in HY25. Spot occupancy had recovered to 54.4% in the week commencing 24 August 2026, approximately 5.1ppt above the February seasonal low.
Leading enrolment indicators supported the recovery:
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139 pre-enrolments, up 48% from 94 in the prior corresponding period.
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82% pre-enrolment-to-commencement conversion rate, up 2ppt versus PCP.
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114 expected commencements, based on applying the current conversion rate as the cohort matures.
The turnaround plan: centre-led model and $2.6m earnings target
The presentation detailed structural initiatives expected to deliver approximately $2.6m of annualised structural earnings improvement once fully implemented. Management stressed this is an expected annualised benefit and was not reflected in HY26 earnings.
The target comprises two distinct components:
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An operating model restructure expected to reduce annualised corporate costs by approximately $1.4m.
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Portfolio actions across three centres expected to reduce annualised earnings drag by approximately $1.2m.
Central to the plan is a simplified, centre-led operating model, under which enrolment responsibility has been returned to centre leaders, supported by structured training, performance dashboards and response-time standards. Governance of safety, quality and compliance remains centrally controlled.
Mayfield’s portfolio comprised 45 centres at 30 June 2026, including one that had ceased trading. Following completion of the three announced portfolio actions, two centres approved for divestment and one exiting through lease non-renewal, the pro forma continuing portfolio is 42 centres.
Operating priority
Management outlined that centre leaders are now accountable for enrolments, family engagement, staffing, quality and financial performance, with communities of practice and targeted specialist support replacing layers of operational management.
Cash, liquidity and balance sheet position
Operating cash inflow was $0.9m for the period, positive but lower than the $3.1m recorded in HY25. Customer receipts remained stable at $43.7m, while payments to suppliers and employees increased by $2.6m.
At 30 June 2026, the Group held cash of $0.2m with approximately $3.4m undrawn under its Westpac facility. Net assets stood at $16.5m, down from $48.4m at 31 December 2025, a reduction driven by the non-cash impairments.
Post-period-end liquidity milestones included:
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Completion of the $3.0m entitlement offer, providing approximately $2.8m in net proceeds.
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Pro forma available liquidity of approximately $5.2m at 31 August 2026.
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Extension of the Westpac facility to 3 September 2027 with revised occupancy-related covenants.
Bank debt was classified as current at 30 June 2026, prior to the subsequent facility extension.
Quality, family advocacy and the road ahead
Family advocacy and quality metrics remained a strength across the period. Key indicators highlighted in the presentation included:
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Net Promoter Score of +69 (HY25: +65).
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96% of centres rated Meeting or Exceeding the National Quality Standard, above the sector benchmark of 91%.
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95% engaged educators, against a Resonate benchmark of 92%.
In an appendix, management noted Mayfield 360 as a capital-light pathway to extend allied health support across the existing network. The service now operates across 8 centres, up from four at initial launch, has achieved NDIS provider certification, and has been approved to deliver Medicare-supported services. At scale, management is targeting approximately $1.0m of annual EBITDA from the initial clinical service stream, a longer-term objective that does not constitute earnings guidance.
On guidance, the Group withdrew its previously issued FY26 earnings guidance on 10 July 2026 and expects to provide revised FY26 guidance during September 2026, following further assessment of occupancy trends and the initiatives outlined in the presentation.
The forward priority centres on converting the existing pre-enrolment pipeline into commencements, additional sessions and sustained occupancy growth through disciplined centre-level follow-up.
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