Australia’s G8 Education to close 40 centres: Everything we know so far

Australia’s largest private childcare center operator is officially planning to initiate the closure of up to 40 centers. 

This step by G8 Education represents nearly 10% of its local operations, following an ongoing occupancy slump, surging prices, and the fallout from last year’s childcare abuse scandal.

In line with its meeting in Brisbane on Wednesday, investors clarified that it would suspend operations at around 40 struggling centres while it considers “longer-term options for those centers including lease surrender, divestment or other alternatives.”

A swift recovery is not expected, given the slump in occupancy compared to 2024 and 2025. The group attributes this to ongoing financial strain, falling birth rates, and an increasing supply of long day care, but also “confidence being impacted by serious child safety incidents.”

“While the operating environment means G8 Education does not expect a material recovery in occupancy relative to pcp [prior corresponding period] this year, we will continue to review and adjust the operating model and cost base of the Group where appropriate,” G8 chief executive Pejman Okhovat said.

The company’ s shares plunged to a 16-year low, dropping more than 87% over the last year following charges were laid against accused paedophile Joshua Brown for the alleged sexual abuse of children in his Victorian centers. 

Regarding the current situation, RBC Capital analyst Wei-Weng Chen said this level of reduced occupancy would typically result in a $40 million impact on earnings before interest and tax (EBIT) on an unconditional basis. 

"None of G8’s mitigation steps announced are quantified, so at present it is difficult to accurately ascertain the full earnings impact,” he said. 

In addition, Michael Wyrsch added that the media coverage of the incidents at G8 Education is deeply disturbing.