G8 Education (ASX:GEM) has informed the Australian market that attendance at its centres in 1H25 (up to 22 August) remains down vs pcp, in its words, thanks to macroeconomics and cost of living pressures – and not a string of scandals involving the sexual assault of children across centres it owns.
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G8 was already in hot water earlier this year when it came out one particularly egregious case of alleged offending by a staff member ultimately on its books was considered immaterial to its price by the company, which then stood by as a string of similar reports hit the press, and have been consistently, since July.
So it’s perhaps fair for GEM to blame macro and the CoL for lower attendance, and perhaps helpful then that they’ve cut off the period at 22 August. Because one isn’t being too dangerous with ideas to wonder if, since then, attendance has cratered even further.
To be sure, right now, the entire nation is feeling anxious about sending its children to daycare centres. This is underpinned, perhaps, by the fact that reporting this year has led GEM to install CCTV cameras across all of its centres.
So what’s the damage? At the end of the day, G8 has seen its price drop -13% intraday on Tuesday to 70cps – pushing 1Y returns down just north of -50%.
That’s after the company downgraded its full-year FY26 earnings to $91-$98 million.
But it’s perhaps the relative omission of what most Aussie investors are actually thinking about – what GEM is doing to build its brand reputation back – that could have been behind the further sell-off on Tuesday.
(Of course, some HotCopper users were more interested in trying to figure out what divvy it would pay next year.)
The company cited “[its] ongoing need for the Group to invest in response to changes in the regulatory environment and operational settings, as well as participation of the Group in the Government inquiries.” Talk about understatement.
GEM last traded at 70cps.
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