G8 Education H1 2026 slides: occupancy drop hits earnings

G8 Education Limited, Australia's largest childcare operator, reported a 12% drop in operating revenue to AUD 409.1 million for the first half of 2026, a decline attributed to sector-wide occupancy pressures. Operating net profit after tax fell 74% to AUD 6.7 million, with shares trading near 52-week lows at $0.14. The company's group occupancy dropped to 57.0%, a 7.5 percentage point decrease from the same period last year, while spot occupancy stood at 61.9%, down 5.1 percentage points year-over-year.

The earnings decline was primarily driven by reduced bookings across the network, with operating EBIT falling 63.7% to AUD 14.7 million and the operating EBIT margin contracting 5.1 percentage points to 3.6%. Despite cost reduction efforts, centre operating costs decreased 7.0% to AUD 394.4 million, but employment costs as a percentage of revenue increased slightly.

Net debt rose 6% to AUD 124 million, but the company maintained compliance with all financial covenants. G8 implemented restructuring measures, suspending operations at 40 centres, restructuring its support office, and executing targeted procurement initiatives, expected to deliver AUD 10 million in annualized cost savings. The company's focus on controllable operational metrics, including team retention, improved to 80%, with Early Childhood Teachers achieving an 85% retention rate.

Family experience metrics showed consistent improvement, with the Net Promoter Score increasing 7 points to 58.