G8 Education sinks -17% on $350M impairment; company notes scandal at heart of it

G8 Education (ASX:GEM) has sunk -17% in intraday trades on Tuesday as the company releases its first meaningful market update of CY26, since last year’s shocking revelations regarding child abuse across its centres.

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The kicker? It’s flagging a $350M impairment in its full-year results. This isn’t set to affect FY25 results guidance for EBITDA, the company wrote, with that figure to come in between $91-98M.

Still, EBITDA isn’t profits after tax (or NPAT, if you must be pedantic).

Described as a goodwill assessment, the company flagged its “anticipated impairment reflects… projected future occupancy… expected supply and demand levels… future fee increases,” and the likelihood of further regulatory and compliance costs.

(In other words: Beefing up safety systems at its centres; GEM’s first port-of-call after last year’s controversy broke was to install CCTV in all its centres.)

Projected wage increases were also reported as a reason behind the goodwill impairment, which never makes investors happy.

This time, at least, the Australian company was sensible enough to acknowledge the reality that it had, in fact, seen criminal activity at its centres, and that now it’s under tougher scrutiny – rightly so.

“As outlined in the Trading Update of 4 November 2025, sector conditions remain challenging. The Board and Management of G8 Education, whilst confident in our strategic direction and core operations, remain focused on navigating the current operating environment and delivering on our priorities of safety and compliance,” GEM wrote for shareholders on Tuesday.

We’ll get to know how worried they really are in a flagged full year results announcement on February 23.

GEM last traded at 52.8cps.

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