G8 releases positive trading update as occupancy recovery gathers momentum
G8 Education Ltd has seen strong enrolment growth in September and October erasing year-on-year occupancy losses according to the ASX-listed early education provider’s just released 2018 investor day presentation.
Average monthly occupancy in October 2018 came in at 80 per cent and has now matched the levels recorded in October 2017, a significant milestone after an extended period of year-on-year occupancy losses recorded by the company.
The gains have been attributed to the successful implementation of operational initiatives designed to drive enrollments and a positive response by families benefiting from the implementation of the Child Care Subsidy.
Other highlights from the release include the following:
- Wage performance, as measured by wage hours per booking, has continued to track in line with expectations at the same level as last year
- 16 new-build centres will have been opened in 2018 with 19 expected in 2019. Three new-build centre openings have been deferred to 2019 to coincide with the seasonal uptick in demand in February and March
- Overall new-build centre performance has been in line with expectations but purchases of existing centres (known as brownfield) have been trading below expectations as challenges managing web enquiries impacted enrolments.
The company has confirmed that it expects to deliver between $136 million and $139 million of earnings before interest and tax in 2018. This is in line with expectations and includes the weaker than expected performance from the brownfield acquisitions.
In addition to providing a trading update the company has also released details of it’s medium-term financial targets, application of the new AASB 16 lease treatment standard and capital management status as well as a detailed update on group strategy.