Thanks for your advice, I do appreciate that organic growth is where you see the biggest challenges ahead, and being aware of what is going on in childhood care/education in general does certainly help.
I also hear that you see plenty of room for improvement in the services provided by G8 and I am not going to dispute that, as I am no expert in this sector.
The main question I have for you is what exactly do you see that has the potential to disrupt G8’s business model?
Low occupancy rates are an issue for everyone, actually a far more pressing one for the low-margin operators than for G8. Also, as I mentioned in a previous post, I see the reform being passed as being a marginal plus for occupancy levels across the sector.
Furthermore, I am prepared to believe that family care centres offer a service that is more in line with the needs of their local communities, but do you really think they pose a serious threat to G8 in terms of market share, over the next decade or so?
Overall, I still see an overwhelming tendency towards consolidation both in this sector and in other comparable ones (such as medical services, aged care, funerals, etc.); what do you think makes childcare different in this respect?
Anything else I have missed?
Cheers
GEM Price at posting:
$4.04 Sentiment: Buy Disclosure: Held
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