Avoca: G8 Education's financial discipline a key to success

Avoca: G8 Education's financial discipline a key to success. Australia's largest for-profit provider of long day-care services has achieved that status through a strategy of acquisitive rather than organic growth. It has maintained strong financial discipline, paying about four times earnings before interest and tax for most of its centres on long-term leases (G8 Education does not buy freehold). It has excellent business monitoring systems which facilitate timely troubleshooting on problem centres. G8 has about 7 per cent market share in Australia. We believe by the time the company reaches peak market share it will turn into a low-growth, high-yield investment. Given that the government provides about half of centre revenues, regulatory issues remain a key focus. However, the recent Productivity Commission report appears to be positive.

The Livewire Equities feed brings you a range of insights that relate to Australian equities


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.