Friday 16 December 2016 by William Arnold Company updates

G8 Education announces management changes and the extension of its overdraft

G8 announced the renewal of its overdraft facility and appointment of its CFO to CEO

G8 has extended its $50m overdraft by two years to December 2018. This facility is secured and while it puts a financial claim in front of bondholders, a working capital facility provides a source of liquidity. Historically, given G8’s near one to one cash conversion, it needed limited working capital finance and the facility remained undrawn. However, the group did drawdown $20m of this facility on April 2016 as part of its refinancing activity. Further, G8 extended the tenor of its SGD notes in May 2016. The SGD260m 2017 line was repaid by the issuance of SGD$270m 2019 notes.

The company has also announced management changes. Gary Carroll has been appointed as CEO and managing director. Previously he was the CFO for the group. Chris Scott, the current managing director, will remain as an executive director. The current CEO, Jason Roberts will move to the position of general manager, development.

This follows a number of key appointments in 2016 which strengthened the board, management and governance including:

  • Mark Johnson, chairman (holds several other directorships including Westfield and HSBC)
  • David Foster, independent non executive director (previous executive role was as CEO of Suncorp Bank)
  • Maria Forgione, company secretary (a senior lawyer with experience in legal, compliance and governance)
  • Gary Carroll the now CEO (joined from Super Retail Group where he was part of the executive leadership team for ten years and CFO for six)

Last week, as covered in the WIREExternal link - opens in a new window, G8 released a short trading update giving full year to 31 Dec 2016 EBIT guidance of “between $158m and $162m”. This is in comparison with our base case EBIT forecast of $152m. On this metric alone therefore, the business is performing as expected. Full year results will be released in February 2017.

To view the full ASX announcements please visit G8’s website.External link - opens in a new window

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