Of the 25 child care centre acquisitions announced by G8 in August, 8 had not settled by the expected January date. G8 cites red tape issues beyond its control. With settlement not expected until November, the broker has adjusted forecasts to reflect expected earnings now lost in the interim.
Target falls to $4.80 from $4.93. The broker retains Neutral, citing concern over increasing competition, regulatory uncertainty and diminishing capital management options.
Sector: Consumer Services.
Target price is $4.80.Current Price is $3.36. Difference: $1.44 – (brackets indicate current price is over target). If GEM meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges – negative figures indicate an expected loss).