We thought G8 Education (large listed childcare provider) tabled a solid operating performance.
Most key numbers (occupancy, sales, profits) moved materially higher post the COVID lockdown lows, and the business had broadly recovered to pre-pandemic levels.
Equally, no one really cared, as all of the focus is on the current lockdowns, and last Friday’s news out of Victoria, in which day-cares were ordered to close.
The important new news, is the fiscal support package announced late Monday, in which the sector will receive ~$40-$50m of weekly funding, with some modest eligibility criteria.
That is a critical lifeline of support to parents, and the industry more broadly.
G8’s balance sheet is strong (net cash) and should see the company once again through this current bout of uncertainty.
Otherwise, we note the improved National Quality Standard (98% of centres meeting or beating) outcomes. Good quality intuitions are the key to happy families, and in turn the key to occupancy and thus profitability.
G8 remains very cheap, and continues to do a good job operationally, as such we remain happy holders in our direct equity portfolios.
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Please note that past performance is not a reliable indicator of future performance.
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