abc in afr today, page-10

Exactly!

The US childcare market is in a similar state to the Australian market 5-10 years ago. Childcare spending in the government in the form of subsidised fees is increasing across nearly every state (pre-K) and ABC is well positioned to leverage of this increased funding - but you need to spend money to get the scale required to properly. This involves acquiring and the refurbishing centres as this is what has driven the increase in occupancy levels which drives profitability and of course building new centres - all this requires funding and that is why the group has such a poor net cashflow. People need to bear in mind that this is discretionary spend and the growth can be turned off pretty quickly in which case the the group would through off huge amounts of cash.

ABC will be around for decades and people will look back at the last few months as an incredible buying opportunity