Regarding the staff ratio changes, GEM issued an announcement on 21/4/15 and said that:
"A major change to be implemented under the NQF related to staff to child ratios in the long day care sector. The first tranche of these changes occurred in 2012. A second tranche will be introduced on 1 January 2016.
G8 Education (ASX: GEM) wishes to advise that, if the changes are introduced as planned on 1 January 2016, then it is anticipated that overall costs will rise by approximately 2.8% to 3.2% (or $2 to $2.20 per child per enrolled day) with the actual quantum dependent upon occupancy levels across affected individual rooms/centres and differences by State."
At this stage, I would trust G8 to be able to estimate the cost increase much more accurately than I can because they know the layout of centres together with their staffing mix. IMO, this increase in cost could be comfortably taken care of by a slight increase in child fees.
Cheers
GEM Price at posting:
$3.75 Sentiment: None Disclosure: Held
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