This article first appeared on GuruFocus .
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Revenue:AUD946.9 million, down 7% year-on-year.
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Operating EBIT:AUD93.3 million, with an EBIT margin of 9.9%.
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Net Loss After Tax:Impacted by a non-cash goodwill impairment of approximately AUD350 million.
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Group Occupancy:65.8% for the year, 4.9 percentage points lower than the previous year.
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Spot Occupancy:54.2% as of February 15, 7.6% behind the prior corresponding period.
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Net Debt:AUD117 million, with a leverage of 1.18 times.
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Cash Flow:Operating cash flow after interest and tax of AUD168 million.
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Dividend:A fully franked dividend of AUD0.02 per share paid, representing 34% of reported NPAT, excluding goodwill impairment.
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Share Buyback:Completed a AUD42.6 million share buyback.
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CapEx:Approximately AUD52 million invested during the year.
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Center Margin:Decreased by 1.3% to 16.4% year-on-year.
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Number of Centers:395 centers, with divestment of five centers and exit from six leases.
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Release Date: February 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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95% of G8 Education Ltd's centers are rated as meeting or exceeding the National Quality Standard, reflecting sustained investment in quality and team capability.
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Family Net Promoter Score improved to the highest level since the launch of the Voice of Customers program in 2023.
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Team retention improved by 2.5 percentage points to 79.5%, supported by positive engagement initiatives and wage uplift.
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The company achieved a 9.4% reduction in scope 1 and 2 emissions, demonstrating commitment to environmental sustainability.
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G8 Education Ltd maintained a strong balance sheet with low leverage and good liquidity, providing flexibility in navigating market conditions.
Negative Points
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Revenue declined by 7% compared to the previous year due to lower occupancy and a reduced number of operating centers.
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The company reported a net loss after tax, including an impairment expense of approximately AUD350 million.
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Group occupancy for the year was 65.8%, with a significant decline in the second half, continuing into early 2026.
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No final dividend will be paid for FY25, and the on-market share buyback is paused due to challenging operating conditions.
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Ongoing affordability pressures and declining birth rates are impacting demand and occupancy levels.
Q & A Highlights
Q: Can you discuss the expected cost base for FY27, particularly regarding training costs and potential headcount changes? A: Pejman Okhovat, CEO: We don't have clear visibility into costs for '27 due to ongoing regulatory changes. Training costs, especially mandatory safety training, will add to operating costs. We estimate an additional AUD5 million to AUD10 million in costs. While we haven't specified headcount changes, we continue to manage costs effectively and will explore leveraging support costs better as occupancy impacts unfold.
Q: Do you see the cost of living as the main issue facing the sector, or is there a broader trust issue? A: Pejman Okhovat, CEO: Both factors are interconnected. Macroeconomic factors like inflation and interest rates impact families' affordability. Additionally, media focus on sector issues has affected trust. We are working with governments to rebuild trust, similar to past efforts in aged care.
Q: Are there any planned changes to the portfolio, and can landlords provide relief in this tough environment? A: Pejman Okhovat, CEO: Portfolio optimization is ongoing, with divestments and exits as needed. However, landlords are currently not offering relief to providers, despite our efforts to engage them.
Q: How should we think about occupancy trends for 2026, considering potential interest rate increases? A: Pejman Okhovat, CEO: Occupancy typically builds from February to November. While we expect a similar curve, the steepness is uncertain due to market conditions. We will update the market at our AGM in April and half-year results in August.
Q: What is the EBIT sensitivity to a percentage point decline in occupancy, excluding regulatory costs? A: Steven Becker, CFO: Historically, each percentage point decline in occupancy impacts EBIT by AUD4 million to AUD5 million annually. We aim to manage costs prudently without compromising operational efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
