How will the government's final report on the PC inquiry into Childcare affect the listed stocks in the sector

Canaccord Genuity

Stockbroker

How will the government's final report on the PC inquiry into Childcare affect the listed stocks in the sector? The Australian Government released the final report of the Productivity Commission's Inquiry into Child Care last Friday. The net result of the PC's recommendations is an increase in government funding to the industry of $266m per annum or 4.7%. We note that the PC was asked to make recommendations within the current 'funding envelope'. We believe that funding will increase to the sector, however expect that funding will most likely be re-distributed to lower and middle income families. We think that this will assist the listed players with the bulk of their portfolios located in outer-metro and regional areas. Affinity Education (AFJ.AU) has only 15% of the portfolio located in inner metropolitan suburbs and we estimate that G8 Education (GEM.AU) is closer to 25-30%. More in depth research, including G8 Education, Affinity, and Folkestone here: (VIEW LINK)


Canaccord Genuity
Canaccord Genuity
Stockbroker
Stockbroker

Canaccord Genuity Group is a leading independent, full-service financial services firm. Canaccord Genuity has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual,...

Expertise

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.

Comments

Sign In or Join Free to comment