G8 Education shares surge on strong trading update

The news: Shares in early childhood education play G8 education have surged more than 12% after a trading update projected a full-year net profit of almost double its 2022 result.

The numbers: G8 estimated full year operating EBIT (after lease interest) of up to $102 million and operating net profit after tax of up to $64 million, compared to earnings of $80.3 million and NPAT of 36.6 million in FY22. GEM shares were up 12.1% to $1.115 by 2:40pm AEDT.

The context: The uptick in G8's performance came despite occupancy being broadly flat with FY22. The company said reduced agency usage, an operational focus and cost disciplines had helped deliver improved results in 2023. G8 is among companies and groups advocating for a government-funded wage subsidy for the sector, which has been plagued by high staff turnover and labour shortages.