This article is from the Australian Property Journal archive
EARLY learning provider G8 Education said the gap between current occupancy levels and those pre-pandemic has again started to widen amid lockdowns, as the federal government yesterday announced additional financial support for services in hotspot areas.
G8 swung to an interim statutory post-tax net profit of $25.1 million, after a $244.1 million loss in the same period last year, but the picture has become bleak since.
“Recent lockdowns have impacted the seasonal trend in H2 with the progressively stricter lockdowns expected to weigh on attendances in several states,” it said. The gap on CY19 core occupancy had narrowed to 1 percentage point in early July, but has widened again to be 2.6 percentage points lower at 72.6%, driven by the lockdown states.
Occupancy sat at 68.0% at the end of June. EBITDA increased from $88.9 million to $102.4 million.
Attendance levels in recent lockdowns have ranged from 15% to 80%.
Revenue was $421.5 million in the first half, against $308.2 million in the prior corresponding period and $429.9 million in H1 2019, reflecting recovery in occupancy and impacts of greenfield growth, Victorian Government COVID-19 payments and February fee review, offset by divestments.
COVID-related movement restrictions impacted revenue with $1.9 million of fees discounted in H1 to support families in lockdowns and retain enrolments.
Prime Minister Scott Morrison and Minister for Education and Youth, Alan Tudge yesterday announced that child care services in Commonwealth-declared hotspots would be eligible for payments of 25% of their pre-lockdown revenue, and outside school hours care (OSHC) services would be eligible for payments of 40%.
This will apply to services seven days after a hotspot is declared, where states have directed families to keep their kids at home. Supports will kick in four weeks after a hotspot declaration for locations where kids are still allowed to attend.
The measure is in addition to existing federal supports and are immediately applicable to child care services in affected areas of Sydney and the ACT and OSHC services in metropolitan Melbourne.
G8 Education’s CEO and managing director Gary Carroll, said earnings impact for the remainder of the current half is dependent on multiple variables, including attendance levels in response to evolving lockdown scenarios, government support and how the group adapts our operations.
For states unaffected by lockdown, wages as a percentage of revenue and margins are forecast to be flat on H1.
