Hi Transversal, G8's business model has changed slightly over...

Hi Transversal,

G8's business model has changed slightly over the past nine months. They are now acquiring centres through acquisition and greenfield development. There does appear to be fewer large quality centres for sale and I would expect that to tighten as owners wait and evaluate the effect of the new funding on occupancy and affordability.

Government funding : the hourly cap, will control price hikes, but there are options that owners can explore should they wish to increase the amount of funding they receive.

The repeated mentioning by the government of "12 hours equals two six hourly sessions" has a few people concerned, mainly because six hourly sessions are favoured by community/preschool, not for profit organisations. The last year has seen some of those, not for profit operations increase their session hours and successfully draw families away from ldc centres. Is there a possibility, that additional funding will be passed to those not for profit, short session operations to assist them accommodate families who either fail or have their hours reduced by the activity test?

Will owner/provider centres pose a threat to G8 over the next decade. Yes and IMO, if G8 do not improve the balance between generating profit and providing continually improving quality of care, that meets the needs of their communities and become connected with those communities, those single operators will not only have higher occupancy rates but waiting lists as well.

G8 IMO, engage in marketing but struggle to communicate and network with others in the sector outside the corporate bubble. They prefer people to step into the bubble, whilst they show great reluctance to step outside it.

They must become better advocates for early childhood education and care, in all forms of media, within their communities, with their staff and with the families who enrol in their centres. This along with other measures would be a step forward in improving occupancy.

What makes early education different from other roll ups? The investment by government and parents, two very different stakeholders, who expect different but quality long term outcomes for their investment.

IMO & DYOR

Islay