G8 Education shares hammered on a hefty $350 million writedown, suspended dividend
The ASX-listed company, Australia’s biggest for-profit childcare operator with 400 centres, said the $350m impairment charge against goodwill reflected “challenging” trading conditions.
Childcare group G8 Education is wiping $350 million from the value of its national network and scrapping its dividend in the face of falling enrolments and an abuse scandal.
The ASX-listed company, Australia’s biggest for-profit childcare operator with 400 centres, said the non-cash impairment charge against the $1 billion of goodwill carried in its books reflected “challenging” trading conditions.
In tandem with the writedown, G8 won’t pay a final dividend and has paused an on-market share buyback announced six months ago “until there is greater clarity around occupancy and sector conditions”.
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By continuing you agree to our Terms and Privacy Policy.The company’s last annual report valued its goodwill at $1.05 billion.
While G8 said the impairment would not affect its downgraded forecast for annual earnings before interest and tax or breach lending covenants, investors took fright, pushing its shares as much as 16 per cent lower.
More to come.
Originally published as G8 Education shares hammered on a hefty $350 million writedown, suspended dividend
