Childcare giant G8 says skills shortage meant turning away parents
Childcare giant G8 Education had to turn away parents from its centres because it was unable to find enough staff to care for their children, stifling earnings growth.
Similar problems had struck the broader industry, Gold Coast-based G8 said on Tuesday. Labour shortages have been a recurring issue for many ASX-listed companies this earnings season, including smash repairers and mining services businesses, such as engineering outfit Monadelphous, which on Tuesday also said it was struggling to find enough skilled workers.
G8 managing director Pejman Okhovat said of rising costs: “Nappies are double-digit inflation.”
G8, which operates almost 430 childcare centres under brands including Pelican Childcare and Kinder Haven, reported improved statutory profit for the June half to $15 million from $8.5 million.
But G8’s results also showed occupancy levels, a key factor in profitability, had been suppressed at about 50 centres. The company had imposed caps on numbers there because it could not find enough staff to meet regulated supervisory ratios.
Those caps were in place in the December quarter, hurting a crucial enrolment period.
“The families unfortunately have to take the children somewhere else,” G8 managing director Pejman Okhovat said. “So it is in reality a permanent loss of those families until we find new ones to replace when we have more staff back in those centres.”
At four in five G8 centres, occupancy levels were above 80 per cent. But centres with caps had 8.3 percentage point lower occupancy.
Mr Okhovat told The Australian Financial Review staffing shortages had improved and caps were in place in just seven centres now but “workforce shortages do remain quite critical in this sector”.
G8’s overall occupancy
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