Shares plunge close to 10pc for Gold Coast child care giant G8 Education

More than $138 million has been wiped off the market capitalisation of the childcare giant.

Shareholders in G8 Education have reason to be upset today after the share price plunged today.

SHARES in Gold Coast-based childcare giant G8 Education have been hammered in early trade.

The share price was down 29.5¢, or 9.60 per cent, to $2.775 by 1pm, wiping $138 million off the Varsity Lakes-based company’s market capitalisation.

The Gary Carroll-led G8 has struggled recently with falling occupancy at its 502 centres in Australia amid an industry-wide oversupply of childcare outlets.

Its share price crashed 23 per cent in one day last year after the company warned it was not expecting market conditions to improve until mid-to-late this year.

Julie Madgwick, who is Head of Early Learning and Education at G8 Education, pictured at Community Kids Broadbeach Waters. Picture: Glenn Hampson

SUBSCRIBE TO THE BULLETIN FOR $1 A WEEK FOR THE FIRST 12 WEEKS

Pretax earnings for last calendar year fell by 12.7 per cent to $136.3 million.

The dive in G8’s share price comes as the wider Australian share market is in retreat, giving up almost half of the gains it accumulated in last week’s five-day winning streak.

The benchmark S & P/ASX200 index was down 64.7 points, or 0.96 per cent, to 6,686.6 points at 12pm, while the broader All Ordinaries was down 59.4 points, or 0.87 per cent, to 6,772.4.

Property trusts slumped 1.90 per cent, leading losses by midday, while utilities shares collectively shed 1.72 per cent.

G8 Education managing director Gary Carroll. Photo: Scott Powick

G8 Education paid out $48.1 million in dividends to shareholders last year.

The current share price is well below the target price of brokers including Macquarie ($3.45), UBS ($3.80) and Morgan Stanley ($4).