G8 PROFIT MACHINE CONTINUES TO FIRE UP

Written on the 20 August 2013

G8 PROFIT MACHINE CONTINUES TO FIRE UP

THE G8 Education profit machine continues to churn out big figures with the childcare-centre operator today posting an $11.018 million bottom-line result for the half year to June 30.

The result, up 62 per cent from a year earlier, has been buoyed by a stream of acquisitions as another 33 childcare centres were added to its portfolio in 2012.

The acquisitions have continued in 2013 with a further 22 childcare centres scooped up so far.

G8 Education, which is now ranked as the Gold Coast’s largest listed company with a market value of $778 million, owns 205 centres in Australia and Singapore and manages a further 45 in Singapore.

The acquisitions boosted G8’s revenue 51 per cent to $117.45 million during the June half.

But managing director Chris Scott (pictured left) says the result also incorporates some “serious organic growth”.

“What that means is that we are running the centres better,” Scott tells Gold Coast Business News.

He says one of the key underlying figures for the company has been a steady rise in return on investment, which he says is running at more than 27 per cent, up from 25 per cent a year ago.

“That just reflects the organic growth and this is the really pleasing part because it makes it more than just a consolidation.”

The buoyant result has led G8 to boost its annual dividend from 8c a year ago to 12c.

The company, whose financial year aligns with the calendar year, pays dividends quarterly and distributed 3c a share to investors in July for the June quarter.

G8 Education earlier this year bolstered its acquisition arsenal through a $35 million capital raising and a further $70 million through the issue of unsecured notes.

G8 also continues to sell of underperforming centres with the company identifying seven centres it plans to sell.

It has recorded a $953,000 impairment charge during the half year on those centres.

G8 Education will be undertaking a national roadshow for institutional investors next week in the wake of the latest profit result.


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