One dividend stock that went up – G8 Education Ltd.

G8 Education Limited (ASX: GEM) has completed the revised tranche-2 placement to CFCG Investment Partners International (Australia) Pty Ltd (CIPI). Under the CIPI Placement Revised Tranche 2, CIPI has subscribed for and been issued 8.2 million shares at a price of $3.88 per share, representing $31.8 million of proceeds to G8. On results front, GEM expects to generate an underlying EBIT of mid-to-high $170’s million despite pressure in occupancy levels for FY17. The group has been increasing prices, while focusing costs to offset the occupancy pressure. Further, it has highlighted that EBIT and margins are tracking ahead of schedule. GEM is positive on reducing the gearing (Net Debt/EBITDA) from 2.2 times to 1.1 times (through the recent capital raising), to have an improved balance sheet flexibility to pursue growth plans. Further, the launch of “Jobs for Families” childcare package would enable to achieve a more affordable and accessible child care. GEM stock has declined 9.3% in the last three months as of July 04, 2017 on concerns of weaker occupancy levels.

 

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