G8 Education updates on current trading and more in 2021 AGM Address
G8 Education’s Managing Director Gary Carroll has provided an update on current trading, strategic initiative progress and the overall operating environment as part of the Group’s 2021 Annual General Meeting proceedings.
The key takeaways from Mr Carroll’s address with regards to current trading were:
- Overall Group current trading – Group LFL occupancy as at 14 May 2021 is currently 70.8 per cent, 3.3 per cent below the level recorded in May 2019, the next annual comparator prior to the onset of the COVID-19 pandemic.
- Regional centre current trading – The 191 centres in regional areas, including 40 that are included in the Improvement Program initiative, are tracking 1.9 per cent above 2019 levels
- Metro centre current trading – The 255 centres in metro areas are trading 7 per cent below 2019 levels, although the 55 centres within this cohort that are included in the Improvement Program are tracking materially better down just 1 per cent from 2019 levels.
- CBD centres current trading – The Group has 8 centres in CBD areas that have been impacted by COVID-19 movement restrictions and working from home arrangements and are tracking 39 per cent below 2019 levels.
With respect to wage hours, ECT pay and wages remediation :
- Wage hours per booking – Group wages are currently performing in line with expectations with roster and wage hours per booking tracking at 2019 levels, despite the lower occupancy levels due in large part to the implementation of wage management processes.
- ECT Award rate increases – G8 noted the Fair Work Commission’s recent determination in regards to a new pay structure for ECT’s employed and that the decision applies to 900 ECTs currently employed, all of whom are currently being paid above award wages.
- Wages remediation program – The Group’s employee payment remediation program announced in December 2020 is on track, with payments to current team members to be substantially completed by the end of July 2021 with costs expected to be within the previously estimated range of $50m to $80m.
With respect to centre quality, safety and team turnover:
- Centre quality – 85 per cent of G8 centres were meeting or exceeding National Quality Standard at the end of 2020 with 31 of the 32 centres assessed year to date in 2021 having met or exceeded the NQS.
- Enhanced learning environments – The Group delivered enhanced learning environments in 94 centres in 2020. The initiative included both training the team on educational practices as well as the re-design and implementation of in-centre learning environments.
- Team safety – As a result of a number of initiatives such as a national injury hotline and enhanced training and communications frameworks, the Group reduced its Lost Time Injury Frequency Rate for team members by 47 per cent.
- Centre manager turnover – Despite very encouraging trends throughout 2020, voluntary turnover was 19 per cent at year end following higher-than-average centre manager movements in Q4. These movements have settled in 2021, turnover now at circa 17 per cent.
With respect to the Improvement Program, Greenfield sites and Portfolio Optimisation:
- 2021 Improvement Program – The 2021 improvement program is progressing, with 118 centres being covered in the program in the first half of 2021.
- Greenfield pipeline – The Group has signed Agreements for lease for 8 new greenfield centres with expected delivery timing and outflows to be updated at the half year as council and building approvals are progressed further.
- Portfolio optimisation – 22 centres have been either sold, have had their lease surrendered or are in the process of having their leases surrendered. $1.9 million in CY19 annualised EBIT losses can be attributed to the 13 centres that have been sold or surrendered thus far.
To conclude Mr Carroll thanked all of the G8 Education team members for their “expertise, compassion and commitment during an incredibly challenging period.”
To read this year’s AGM addresses please click here.