The G8 Education Ltd (ASX: GEM) share price is one to watch today after posting a half-year statutory net loss after tax of $239 million.
What does G8 Education do?
G8 Education is Australia's largest private provider of quality early childhood education and care, with more than 58,000 children attending one of its 470+ Australian centres every day.
Why is the G8 Education share price worth watching today?
The G8 Education share price is worth watching after reporting a 28.4% decrease in half-year revenue to $308.3 million. This was largely due to the impact of the coronavirus pandemic and subsequent restrictions on the early childhood industry.
Underlying earnings before interest and tax (EBIT) fell 44.4% to $28.7 million thanks to the pandemic but offset by significant government support.
That flowed through to the bottom line with the educator posting a $239.2 million net loss, inclusive of a $237 million non-cash impairment expense. Underlying net profit fell by 55.9% to $11.6 million for the year.
Total expenses reduced by 24% from FY19 on a pro-forma basis largely thanks to reduced employee expenses during the year.
The group's current occupancy is 69% with attended occupancy of 50% as at 30 June 2020.
No interim dividend for shareholders
The G8 Education share price will be worth watching as management declined to pay an interim dividend. This comes at a time of significant uncertainty in terms of future earnings with management instead focusing on capital management.
The company's dividend policy remains temporarily suspended with the deferred FY19 final dividend to be paid on October 30.
However, a dividend may be paid in respect of calendar year 2021 depending on subsequent financial performance.
Outlook
Management was unable to provide guidance for FY21 given the significant uncertainty the company is facing right now.
G8 will perform a strategic portfolio review to address underperforming centres. However, management cited the company's "financial flexibility" in dealing with current challenges to emerge from COVID-19 as a "stronger business".
The G8 Education share price is down 45.5% in 2020 while the S&P/ASX 200 Index (ASX: XJO) has fallen 8.7% lower this year.
