G8 Education shares tumble despite jump in earnings
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More news: Shares in G8 Education dropped despite posting a 20.8% jump in full-year statutory earnings.
G8's shares tumbled 3.66% to $1.32 by 2:12pm AEDT. Over the last 12 months it has risen 17.4%.
RBC Capital Markets analysts were positive on the result but said early CY25 trading had been a "little softer" than the prior corresponding period partly due to timing. The analysts had an 'outperform' rating on the company with a price target of $1.37.
What they said: "... but reasons to be more optimistic are: 1) GEM highlighting their cautious optimism for "a more positive" CY25, 2) comments that GEM no longer view workforce challenges as a critical issue in CY25 and 3) GEM's expectations for more favourable macro factors in CY25," RBC said in a note.
"Given the solid EBIT beat today, CY25 consensus only represents 6.4% y/y growth (CY24 growth was 14%) — which suggests upgrades are more likely than downgrades notwithstanding a softer YTD occupancy print."
G8 lifts earnings as childcare demand holds strong amid cost pressures
The news: Childcare centre operator G8 posted a 20.8% jump in full-year statutory earnings to $67.7 million, as occupancy levels grew despite a tough cost-of-living crunch affecting Australian households.
The numbers: The company said operating earnings before interest and taxes grew 14.3% to $115 million. It also declared a full dividend 3.5 cent per share, up from 3 cents a year ago.
Operating EBIT of $115 million was up 14.3%.
The context: G8 said its financial performance was driven by improved occupancy and a "well-managed cost based including support costs".
What they said: G8 chief executive and managing director Pejman Okhovat said: “We are confident our operational execution, in a challenging environment, will gain momentum in CY25 and we remain optimistic that favourable macro factors including female workforce participation, easing inflation, lower interest rates and unemployment will start to increase childcare participation".
The sources: ASX, RBC Capital research
