G8 Education Ltd. reported a sharp deterioration in first-half results, with net profit after tax plunging 74% to A$6.7 million as occupancy across its network fell to 57%, down 7.5 percentage points year-over-year.
The company’s operating revenue declined 12% to A$409.1 million, while reported net loss after tax widened to A$38.8 million, driven by center suspensions and implementation costs related to a new software platform. Center revenue alone dropped 11.5% compared with the first half of 2025.
Occupancy, a key metric for the sector, averaged 57% for the period, with spot occupancy at 61.9% as of late August, down 5.1 percentage points from the prior year. Year-to-date occupancy stood at 58% at the end of July, though this represented a 0.5 percentage point improvement from June. The company attributed the decline to affordability pressures, lower birth rates and new supply entering the market.
Chief Executive Pejman Okhovat said sector conditions remained challenging, while Chief Financial Officer Steven Becker noted that operating net profit after tax fell to A$6.7 million from A$25.6 million in the prior corresponding period, primarily due to the occupancy shortfall.
G8 suspended operations at approximately 40 centers and reduced its support office headcount by 21% as part of a restructuring plan targeting at least A$10 million in annualized savings. About half of the targeted savings were realized in the first half, with the remainder expected to flow through in the first half of fiscal 2027.
The company’s net debt rose marginally to A$123.6 million at the end of June, with a gearing ratio of roughly 25%, described as conservative. Undrawn bank facilities totaled A$40 million, and one of its A$100 million revolving debt facilities was extended from December 2027 to January 2029.
Despite the weak operational performance, G8’s share price held steady at A$0.14 following the release, with the stock up 33% over the past year and 21% year-to-date. The company’s InvestingPro financial health score was rated 3.3 out of 5.
G8 also highlighted improvements in compliance and sustainability metrics, including a 18% reduction in Scope 1 and 2 emissions and a 18% decrease in waste generation. Network quality remained strong, with more than 97% of centers meeting or exceeding the National Quality Standard.
