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G8 releases upbeat AGM statement highlighting progress on multiple fronts
Jason Roberts
May 07, 2024
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G8 Education has released a positive strategy and trading update as part of its Annual General Meeting proceedings with a confirmation that the Group continues to make progress across multiple fronts.
“Reflecting on 2023, I can report it was a transformational year led by our new CEO Pejman Okhovat,” Chairperson Debra Singh said.“Since taking on the role in January 2023, he has established a clear direction for the future of G8 Education and is continuing to build on our strategic foundations.”
G8’s group wide focus on achieving a ‘stable and capable’ team has yielded good results with team retention rates increasing by 4 per cent on the prior year to 74 per cent with Early Childhood Teacher retention rates increasing by 12 per cent.
Team vacancies have fallen by 25 per cent with a focus on ongoing employee education and other workplace factors including the health and well-being of G8’s people being the primary drivers of the improvement.
As a consequence of these developments there were no occupancy capped centres across the network due to team shortages during the reporting period, and the usage of agency staff was significantly reduced. Operationally, G8 confirmed that occupancy in April 2024 was 1.1 per cent higher than last year and that occupancy currently is around 1.3 per cent higher than the same week in May 2023, slightly higher than the 1.2 per cent reported in February 2024.
“We continue to see strong performance in cost management particularly in wage rostering and usage of agency, with current usage levels well below prior year,” Mr Okhovat said.
“These positive outcomes are driven by our strong performance in filling vacancies and improving team retention which have continued through quarter 1.”
The planned divestment of thirty one centres announced in October 2023 has, however, proceeded more slowly than initially anticipated, with the Group citing regulatory and landlord approvals as being the key roadblock.
To date, seventeen centres have been divested, with a further eight to be sold as part of the Genius Child Care arrangements and six others to be progressed to other vendors.
Notably, 54 per cent of the original portfolio has now been divested. Collectively the disposed centres only accounted for around 41 per cent of the annual losses suggesting that the larger, more unprofitable centres within the portfolio remain on G8’s books for now.
“Looking ahead, the Group will continue to be purpose led and pursue its strategic objectives by focusing initially on a “fit core”, where G8 demonstrates improved operational execution including disciplined capital allocation framework, focus on optimisation of the existing network and disciplined cost management principles. This will pave the way for our next strategic horizon where we aim to enhance and grow our core,” Mr Okhovat concluded.
Access the results here.
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