COVID-19: Star and Gold Coast childcare giant G8 Education to delay dividend payments

Childcare giant G8 Education and casino operator Star Group will both delay dividend payments as they grapple to conserve cash during the COVID-19 pandemic.

CHILDCARE giant G8 Education and casino operator Star Group will both delay dividend payments as they grapple to conserve cash during the COVID-19 pandemic.

In an announcement to the ASX this morning G8, which has more than 400 childcare centres in Australia, said the 6 cents per share fully-franked final divided payment would be moved from April 6 to October 30.

G8 said this was because of the rapidly evolving situation due to COVID-19.

“As part of its cash management planning, the Board considers this a prudent step to maintain liquidity and protect long-term shareholder value,” G8 said.

Childcare providers have struggled during the COVID-19 pandemic. Photo: iStock

The company current has $135 million in cash and lending facilities.

Investors responded positively to the announcement sending shares up 10 per cent to 77.5¢.

G8 also welcomed the Federal Government’s wage subsidy program and said it would be providing a further update on its impact on G8 at a later date.

Childcare is an essential service and as such centres remain open, although some parents are keeping their children at home during the pandemic.

CEO Gary Carroll said the government had reaffirmed its commitment to the early childhood education sector.

Poker tournaments like the one Scotty Prince is promoting here are out of the question while The Star Gold Coast’s gaming floor remains closed. Picture Glenn Hampson

“We continue to work closely with the government on further support measures for the sector and Australian families who rely on our services,” he said.

Star Group, which operates the casino on Broadbeach Island, said it was delaying its first-half dividend payment of 10.5 cents from April 1 to July 2. There will be no final dividend for the year either.

The company said it was revoking its dividend policy of paying out 70 per cent of after tax normalised profits to demonstrate its commitment to maintaining a healthy balance sheet.

Investors welcomed Star’s move sending the share price 16 per cent higher to $2.37.

Star was recently forced to close its gaming floor and food and beverage outlets at The Star Gold Coast due to tightened restrictions around social distancing and social gathering.

It led to the company standing down 90 per cent of its local workforce or 2250 people.