Margins strengthen as G8 Education navigates softer demand in HY25

G8 Education Limited (ASX: GEM) has delivered a steady half-year result for the six months to 30 June 2025, with disciplined cost management and margin improvement offsetting weaker occupancy trends.

Earnings snapshot

• Revenue: $464.7m (↓3.5% on HY24)
• Operating EBIT: $40.5m (↑2.8%) – lease adjustments
• Statutory EBIT: $58.6m (↓3.1%)
• Reported NPAT: $22.5m (↑12.4%)
• Operating NPAT: $25.5m (↑6.6%)
• Occupancy: 64.5% (↓3.7pp YoY); 

Operating EBIT margin improved to 8.7%, while centre EBIT margin lifted to 15.4%, aided by reduced agency spend, procurement savings, and tighter labour management.

The Board declared a fully franked interim dividend of 2.0 cents per share, unchanged from HY24, equating to a payout ratio of 69% of statutory NPAT.

Operating cash flow was strong at $85.4m, reflecting a 139% cash conversion rate. Net debt remains stable, supported by consistent cash generation and disciplined capital allocation.

The half-year was marked by heightened scrutiny following a child safety incident in Victoria. G8 reaffirmed child safety as its highest priority, committing to:

• accelerated CCTV rollout across all centres,
• strengthened compliance and training, and
• advocacy for a national educator register to improve workforce oversight.

94% of centres are rated Meeting or Exceeding the National Quality Standard (NQS), remaining above sector averages.

Workforce stabilisation

Recruitment and retention metrics improved:

• Centre Manager retention: 88%
• ECT retention: 75%
• Employee engagement: 77% (above benchmark)

Scholarship programs, enhanced professional development, and workforce wellbeing initiatives were cited as drivers of stability.

Portfolio optimisation

Network reshaping continued, with seven centres divested during HY25. The company reiterated its disciplined approach to capital allocation, with $40–45m capex earmarked for FY25 to support quality upgrades, technology, and growth opportunities.

Read the full results on the G8 Eduction company announcements page here.