G8 provides insights on response to COVID-19 and more at 2020 AGM
New insights as to how G8 Education was impacted by COVID-19, and how the company responded to the challenges posed to the business, team members and children as a result, have been shared by Mark Johnson, Chairman and Gary Carroll, Managing Director and CEO, as part of the 2020 Annual General Meeting, held this morning in Queensland.
Mr Carroll noted that once G8 became aware of the initial impact of COVID-19, the company implemented “a cross-functional COVID response team and plans” to ensure the health and safety of team members, children and families, as well as safeguarding the continuity of operations.
Hygiene and safety measures were expanded across centres and support office with “working from home” arrangements implemented where possible, and regular communications, a core element of the response plan, launched to ensure that team members and families were kept up to date on key issues such as hygiene, social distancing awareness and wellbeing initiatives.
With respect to ensuring business continuity, G8 adopted a three pronged approach designed to safeguard the business, team members and families through the crisis.
Firstly, a COVID-19 specific governance structure was set up, consisting of daily team meetings that enabled “an ability to monitor in real-time the shifting landscape and adapt the near term response plans accordingly”. This structure also included a Board of Director’s stream, with the Board conducting weekly meetings and working closely with the Executive team through the period.
Secondly, the securing of adequate liquidity and financial flexibility needed to occur to ensure that the Group could survive a prolonged COVID-19 created downturn. The centrepiece of this set of initiatives was the raising of $301 million via the sale of shares at $0.80 to institutional and retail investors announced in April 2020. Further actions were taken internally, such as stress testing balance sheets, income statements and cash positions to better understand how the business would perform under different scenarios.
Thirdly, the capital and operating expenditure of the business needed to be rebased lower to reflect the trading environment that COVID-19 had precipitated. Specifically, measures in this area focussed on deferring non-essential capital projects, reducing discretionary expenditure where possible, optimising wage rosters to reflect reduced attendance and working with landlords to reduce rental costs.
The collective impact of the Group’s approach, Mr Johnson said, has “enabled us to carefully manage the impacts of the pandemic”. Centre Managers, Mr Carroll added, have provided “continuous care to children and families throughout the COVID period, displaying courage and service in a time of great uncertainty” supported by the solid approach taken in response to the challenges raised.
Away from COVID-19 new system roll outs providing benefits across the Group
As well as an update on COVID-19 responses Mr Carroll provided a general update recapping on some of the key areas of progress experienced in 2019.
Of note was the roll out of the parent and educator modules of their child care management system (CCMS) which was implemented in 2018. The new modules will enable a more seamless communications experience for families but also, for the first time, give the Early Education and Learning support team, based at G8’s support office in Varsity Lakes, Queensland, real time visibility of the learning programs being developed and delivered by their centres.
In addition, Mr Carroll touched on the Group’s social networking platform, which, when combined with the Early Education and Learning support team, provides the means for educators to access best practice from across the G8 network and also to access support from the early learning professionals based at support office.
The other key system that was referenced by Mr Carroll was the people management system, that will cover recruitment, onboarding, rostering, performance management and more, believed to be Dayforce, a software application developed by US based human capital management company Ceridian and announced by G8 in April 2019.
Commenting on the rostering capability of the new system Mr Carroll said “We have been utilising this platform to assist in rostering during the volatile COVID period with promising results” before adding that the remainder of the platform will be rolled out in Q3 2020.
Current trading update focuses on occupancy and reiterates “no worse a position”
With respect to current trading, Mr Carroll highlighted that booked occupancy was currently circa 65 per cent and physical attendance was 53 per cent. This compares to 65 per cent and 52 per cent reported in the Group’s response to the new “Return to CCS” roadmap announcement on 8 June 2020.
He went on to reiterate that for the duration that the Transitional Payment support package is live “G8 expects to be in no worse a position than we would have been in under the initial support measures, even at more subdued occupancy levels” a statement that is consistent with that announced by the Group on the 8 June 2020.
Looking ahead the Group is scheduled to present its Half Year 2020 results on 24 August 2020.
To read Mr Carroll and Mr Johnson’s addresses please click here.