{"id":871422,"date":"2026-08-28T12:14:17","date_gmt":"2026-08-28T12:14:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/871422\/"},"modified":"2026-08-28T12:14:17","modified_gmt":"2026-08-28T12:14:17","slug":"childcare-in-upheaval-as-losses-closures-and-plunging-revenue-mount","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/871422\/","title":{"rendered":"Childcare in upheaval as losses, closures, and plunging revenue mount"},"content":{"rendered":"

\"Colin<\/p>\n

August 28, 2026 \u2014 3:59pm<\/p>\n

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AAA<\/p>\n

The news from Australia\u2019s commercial childcare providers this week illustrates the all-encompassing crisis embroiling the industry \u2013 and who is paying the price to fix it.<\/p>\n

Listed childcare provider G8 Education reported a plunge in revenue and occupancy for the June half year, as well as a $39 million loss for investors who have watched the stock drop around 90 per cent since last year when the childcare sex abuse scandal erupted.<\/p>\n

\"EdgeEdge Early Learning entered voluntary administration on Wednesday.Nine Entertainment<\/p>\n

Part of the loss related to writedowns from the suspension of 40 struggling centres<\/a> which seem unlikely to reopen. On a conference call with investors following the half-year results, G8 executives did not rule out further centre closures.<\/p>\n

G8 chief executive Pejman Okhovat said the recent closures are part of the reason the plunge in occupancy across its remaining 359 centres was alleviated slightly in June. Spot occupancy was down just over five per cent compared to this time last year.<\/p>\n

Other operators are doing far worse.<\/p>\n

\u201cWe\u2019re hearing anything from kind of minus five per cent, minus six per cent to about minus 15 per cent on previous years. And unfortunately, as you\u2019ve noticed, we\u2019ve seen an increasing number of operators that are actually just closing down as well,\u201d Okhovat said.<\/p>\n

G8\u2019s cannibalisation strategy is providing a modest pay-off, but its staff and parents won\u2019t be celebrating.<\/p>\n

\"G8G8 Education boss Pejman Okhovat says oversupply is easing but it was forced to quickly shutter 40 underperforming centres in recent months.Glenn Campbell<\/p>\n

What was not evident in the numbers presented to investors this week is the 1600 staff who no longer work for G8, and 7000 children no longer in its care \u2013 largely a result of the closures.<\/p>\n

If this wasn\u2019t sobering enough, the following day, private equity owned Edge Early Learning went into voluntary administration, putting the future of its 70 centres in doubt.<\/p>\n

\u201cWe understand that this may be a confusing and stressful development for families who rely upon Edge Early Learning to provide care for their children,\u201d the company said on its website<\/a>.<\/p>\n

It should not have come as a surprise.<\/p>\n

This month its landlord, Arena Real Estate Investment Trust (REIT) saw its shares plunge after it revealed Edge was no longer paying rent on 31 properties Arena owned, and a default notice had been issued. The deadline for remedying the default expired this week.<\/p>\n

And while the company says it is operating its centres on a \u201cbusiness-as-usual\u201d basis, parents and staff will already know that this term has a rather loose interpretation at Edge.<\/p>\n

In April, multiple incidents<\/a> with Edge centres in South Australia culminated in one centre being suspended from operating for three months due to repeated serious supervisory breaches. It isn\u2019t the only one.<\/p>\n

\"AnAn Affinity-owned Milestones early learning centre in Melbourne was recently suspended from operation by regulators.The Age<\/p>\n

According to media reports, as many as five centres have been suspended from operating since last year for breaches \u2013 and at least one of them for three months.<\/p>\n

All of Edge\u2019s South Australian customers were left scrambling on May 1 when the group took the desperate step of a \u201cStatewide Day of Action\u201d to give every employee additional training to address the regulatory-induced chaos.<\/p>\n

Even healthy operators are feeling the heat.<\/p>\n

On Thursday, shares of another listed child care operator, Nido Education, plunged more than 20 per cent after it reported a loss for the June half-year, withdrew its guidance for 2026 and said it is reviewing its cost base.<\/p>\n

What is becoming clear is the sex abuse scandal<\/a> is having an ongoing impact across the whole sector, not just the main commercial operators whose centres were directly implicated: G8 and private equity-owned Affinity Education.<\/p>\n

\"AllegedAlleged child abuser Joshua Brown.<\/p>\n

The duo\u2019s centres were among those which employed Joshua Dale Brown, who was charged with more than 70 sex offences against eight children aged under two in their Victorian centres.<\/p>\n

The scandal did not warrant a single comment in G8\u2019s media release for its half-year results this week \u2013 and Edge was not involved at all \u2013 but they are both hostage to the regulatory forces the scandal has unleashed as government agencies ensure every effort is made to assure parents that commercial operators are not cutting corners at the expense of their children\u2019s safety.<\/p>\n

\u201cSafety and compliance remain our highest priorities,\u201d Okhovat told investors after unveiling a long list of costly remediation on this front. \u201cImportantly, these initiatives are delivering results.\u201d<\/p>\n

Related Article\"<\/a><\/p>\n

His next comment may explain the wave of failures, like Edge, which are hitting the sector.<\/p>\n

\u201cWhile sector statutory compliance actions doubled compared to the prior corresponding period, G8 reduced the statutory compliance action by five per cent. Reportable compliance incidents reduced by approximately 25 per cent, while high-risk compliance incidents reduced by 56 per cent,\u201d he said.<\/p>\n

The evidence is clear from new enforcers like the Victorian Early Childhood Regulatory Authority (VECRA).<\/p>\n

It took 39 statutory actions against childcare operators in the first quarter of this year, up from 9 in the same period last year.<\/p>\n

This includes the three-month suspension of one of the Affinity centres where alleged paedophile Joshua Dale Brown briefly worked for \u201cserious and concerning\u201d non-compliance issues.<\/p>\n

\u201cImmediately suspending a provider is a decision which impacts the childcare arrangements of parents and caregivers, but we make this decision because we know they wouldn\u2019t want us to compromise on safety,\u201d VECRA\u2019s Wendy Steendam said about another suspension this month.<\/p>\n

Perversely, closures and centre failures may be helping ease the financial carnage unleashed by an industry where landlords have been rewarded for oversupplying centres to a market with tepid demand growth and rising costs.<\/p>\n

As G8 \u2013 and ASX releases from childcare landlords \u2013 makes clear, the flood of money supplying new centres is waning.<\/p>\n

G8 said the net supply of centres in the most recent quarter was the lowest quarterly growth in 10 consecutive quarters.<\/p>\n

Related Article\"ABC<\/a><\/p>\n

Another Edge landlord, Charter Hall Social Infrastructure, said it is engaging in \u201cportfolio curation\u201d, selling off 32 childcare properties last year and lifting its investment in alternative areas like education and health.<\/p>\n

In a research note on Edge landlord Arena REIT, Macquarie analysts said it conservatively assumes \u201cthe industry is oversupplied by around 10 per cent\u201d and noted the significant drop in supply this year and a significant increase in centre closures.<\/p>\n

\u201cClosures increased to 210 versus 120 (five year average),\u201d it said.<\/p>\n

It means the commercial operators that can afford the cost of providing a safe environment will find a bottom to their falling occupancy \u2013 aided by the collapse of operators which cannot survive the regulatory scrutiny.<\/p>\n

But many more families and staff will be left scrambling.<\/p>\n

The Market Recap newsletter is a wrap of the day\u2019s trading. Get it each weekday afternoon<\/a>.<\/p>\n

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\"ColinColin Kruger<\/a> is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"August 28, 2026 \u2014 3:59pm Save You have reached your maximum number of saved items. Remove items from…\n","protected":false},"author":2,"featured_media":871423,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-871422","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/871422","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=871422"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/871422\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/871423"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=871422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=871422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=871422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}