This article is from the Australian Property Journal archive
CHILDCARE centre operator G8 Education’s share price dropped yesterday after it unveiled a soft outlook for the sector in the second half of 2024, despite a positive set of interim numbers.
Reported group revenue was 5.5% on the prior comparative period (pcp) to $480.4 million, underpinned by improved occupancy performance and operational efficiencies, while improved occupancy was a key driver of operating EBIT lifting 20.5% to $39.4 million
Statutory net profit after tax lifted 33.6% to $20.0 million.
Group occupancy lifted modestly to 68.2%, driven by solid opening occupancy and improved family retention rate.
However, it said sector conditions in the second half of 2024 are “anticipated to be more challenging”. Sector enquiries remain lower than the pcp, it said, while net supply growth remains steady at 3.3% year-on-year, and “cost of living pressures continue to be a key factor for our families, resulting in lower occupancy”.
“While our first half result demonstrates our progress against G8 Education’s strategy, the group’s strategic focus to build a stronger and more sustainable business continues as we recognise there is more to do,” said G8 Education managing director and CEO Pejman Okhovat.
“However, we are encouraged by the federal government’s recent announcement to fund wage increases for early childhood educators that will support the early childhood education sector.”
G8 Educations program of network optimisation has seen the completed divestment of 15 centres and three centres surrendered during the first half. It also opened two new centres during the period.
G8 Education declared a fully franked interim dividend of 2.0c up 33% on the pcp, reflecting solid earnings, representing 81% of reported first half NPAT.
It also has plans to return capital to investors through an on market buyback of up to 5% of issued capital.
