Small-cap fund managers struggle to recount the last time a company went into a trading halt when it had good news to report. But it has happened with G8 Education.
G8’s five-person board met on Tuesday and the directors thought it prudent to go into a halt while management came up with firm earnings guidance for the 12 months to December.
G8 is expected to provide earnings guidance above market consensus on Wednesday or Thursday, and lift the company’s dividend above the current payout of 5¢ a quarter.
While G8 does not have any guidance in the market, analysts expect the company to record $101 million EBIT in the year to December 31 and 10¢ a share in second-half dividends.
The news is likely to be well received by G8’s shareholders and analysts. When the company went into a halt at 2.11pm on Tuesday investors immediately feared a downgrade, and with the stock trading at 25 times forecast profit any earnings miss could have a pretty savage impact on the share price.
G8 Education raised $100 million in fresh equity at $4.91 a share on October 22. The shares have been sold since and traded at $4.26 on Tuesday before the halt.
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