Childcare giant settles case

Gold Coast childcare giant G8 Education has agreed to settle a class action by unhappy investors for $46.5 million.

The Varsity Lakes headquartered business, which owns more than 400 childcare centres throughout Australia, says the settlement is without admission of liability, and the commercial settlement was in the best interests of the company and its shareholders.

Image courtesy of Facebook | G8 Education

Slater and Gordon filed the class action in late 2020 on behalf of investors who lost money when G8 downgraded its earnings guidance for 2017 on 4 December 2017 and when G8 announced its actual earnings for 2017 on 26 February 2018.

The class action alleges G8 engaged in misleading or deceptive conduct and breached its continuous disclosure obligations based on the earnings guidance it provided the market on 23 May 2017 and 21 August 2017.

The matter was due to go to trial in three weeks’ time before Justice Michael Osborne in Victoria’s Supreme Court. In a statement to the Australian Stock Exchange, G8 Education said the settlement remained subject to court approval, with the “net case impact to G* after tax and insurance contributions expected to be circa $24.5m.”