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Largest childcare centre operator hit with class action
A class action has been filed against Australia’s largest childcare centre operator, G8 Education Ltd.
Largest childcare centre operator hit with class action
A class action has been filed against Australia’s largest childcare centre operator, G8 Education Ltd.
The claim is brought on behalf of investors who acquired G8 shares between 23 May 2017 and 23 February 2018, and subsequently suffered loss after, Slater and Gordon said, the ASX 200 company failed to disclose to the market material information relevant to its 2017 financial performance.
Slater and Gordon practice group leader Andrew Paull said investigations indicated that at the time G8 made its May 2017 forecast, it knew that it faced an increase in costs as a result of regulatory changes affecting staffing levels, and that it was unlikely to increase its occupancy rate to the level required to achieve the May 2017 forecast.
“We are alleging G8 contravened its continuous disclosure obligations by failing to disclose to the market information relevant to its full-year 2017 financial performance,” he said.
“We also allege G8 engaged in misleading or deceptive conduct.”
On 23 May 2017, G8 released an earnings forecast of underlying EBIT of “mid to high $170’s million” for the calendar year (May 2017 forecast).
On 4 December 2017, Slater and Gordon found that G8 downgraded its forecast of underlying EBIT to “around $160 million” (December 2017 reforecast). Following this announcement, the market’s reaction was substantial, with G8’s share price dropping by $1.02, or 23 per cent.
On 26 February 2018, G8 released its full-year results for 2017. G8 achieved an underlying EBIT of $156 million, $4 million less than the December 2017 reforecast. G8’s share price again declined by $0.25, or ~8 per cent, following this announcement.
G8 Education is one of Australia’s largest providers of quality early childhood education and care with more than 470 early learning centres across 21 quality early learning brands.
The class action has been commenced on a No Win, No Fee basis, and group members will not be exposed to any out-of-pocket costs as a result of their participation in the claim.
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