Childcare operator G8 Education has felt the impacts of both the Australian bushfires and coronavirus on daycare bookings, with chief executive Gary Carroll saying many in the sector would also be hurting.
"Everyone is feeling it… the specific impact for the bushfires is that if you're in a bushfire-affected area, in some instances you're forced to close. In the ACT between November and January, most centres were unable to play outdoors at all — and the net result is that bookings were impacted," Mr Carroll said after unveiling the company's 2019 financial results on Monday.
G8 Education has been impacted by both the Australian bushfires and the coronavirus outbreak.Credit:Glenn Hunt
Coronavirus is also affecting the company's "occupancy rates", he said, with drop-offs in bookings depending "on the mix of families in the centre," he said.
The company said volatility caused by these broader factors produced a slight hit to its year-to-date like-for-like occupancy numbers, but that it would mitigate any impacts on profits with cost management.
G8 Education flagged last November that the growth rate for bookings would likely be 1 per cent rather than a previously forecast 1.5 per cent. The company confirmed this morning it had secured growth of 1.1 per cent for the year.
The business, which operates childcare centres across the country, generated statutory revenue up 7.5 per cent to $922.2 million and earnings before interest and tax down 2.8 per cent to $132.5 million, in line with the revised guidance it gave to the market at the end of last year.
It posted a statutory net profit after tax of $62.6 million, down 12.9 per cent on the previous corresponding period, though the company flagged that transition to new leasing accounting standards impacted this figure.
Mr Carroll said despite ongoing challenges in the sector around oversupply of childcare centres, the impact of this on G8's growth had "reduced significantly" in 2019.
He said the business would soon see the effects of further cost management, including a new rostering system designed to enable the business to tailor its staffing with greater precision when one-off events like the bushfires occurred.
G8 Education's share price dropped 4.3 per cent in the first hour of trade on Monday to sit at $1.76 at 11:00am.
The company will pay a calendar year dividend of 6c a share, which translates to a full year dividend of 10.75c a share.
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