Childcare giant G8 Education posts big loss as client rates continue to slump, affordability pressures blamed
G8 Education has booked a half-year loss after occupancy rates continued to fall, partly blamed on affordability pressures rather than shocking charges against a former staffer.
Childcare giant G8 Education has booked a half-year loss after occupancy rates continued to fall, blamed on cost of living and other pressures it insists are being felt across the entire sector.
Statutory net loss for the six months to June 30 was $38.8 million, compared to a $22.5m reported net profit for the same period in calendar 2025.
The bottom line was hit by a $47.1m net impairment expense, associated with the suspension of operations at 40 centres around Australia in April after child sex abuse charges were laid against the former staffer, who had worked at four of the businesses.
Sign up to The Nightly's newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.At the time, the client exodus was partly blamed on the scandal.
Chief executive Pejman Okhovat said the impairment also related to other portfolio optimisation activities, and decisive actions taken to strengthen the business included restructuring the support office in June.
“These initiatives are expected to deliver at least $10m in annual cost savings,” he told a conference call on Tuesday.
Occupancy levels fell 7.5 per cent as enquiry levels also decreased, which the company said was experienced across the sector.
“The first half of 2026 continued to be impacted by challenging sector conditions, with affordability pressures, lower birth rates, supply growth affecting demand across the sector,” Mr Okhovat said.
Asked if more centre closures would follow, if tough operating conditions persisted, group chief financial officer Stephen Becker said that may occur.
“Obviously we’ll just have to assess that as we go,” Mr Becker said.
“We may do that in the future. We can never rule that out.”
The company sought to either divest the suspended operations or surrender them back to the landlord, he said.
“In terms of buyers, we have had some success,” Mr Becker said.
“We won’t give an exact number before the end of the year, but we certainly are very confident that we will divest a number of those centres before December.
“We will have some lease surrenders as well ... Either the lease ends, or we come to some arrangement with the landlord.”
Mr Okhovat said that across the sector, G8 Education had heard of occupancy rates falling 5-15 per cent on previous years.
“We’ve seen an increasing number of operators are actually just closing down as well, so it’s wide ranging,” he said.
