Kidicorp shares up after profit recovery

Shares in Kidicorp Group zoomed ahead today after the childcare centre operator reported its September half year net profit was $1.1 million compared with $28,000 in the year ago period.

The company, which has had its troubles in the last year including being suspended for late filing of its annual report and the "disengagement" of major Australian shareholder ABC, said the profit was on revenue of $13.9m, up by $1.7m over the same period last year.

Kidicorp shares shot up 3.8c, or 32 per cent, to 15.8c after the announcement at midday. The shares that were originally issued at 50c took a dive in March after ABC said it was quitting the stock.

No dividend was declared. Chairman Richard Waddel said the company may consider a maiden dividend at the full year. He said the company had had "a pretty good six month".

Earnings per share rose to 0.59c against 0.015c.

Mr Waddel said Kidicorp had agreed to buy the 21 centres it had been managing for the First Steps Childcare Trust. As a result, the company has increased the number of children it is licensed to care for by almost half to 3,158.

The profit was after interest expense of $248,000 and amortisation of intangible assets of $294,000.

Accumulated tax losses mean that no tax provision was considered necessary.

The improved performance was attributed to more children attending the company's centres, increased Government funding and tighter control on costs during the period.

The company has had a number of one-off costs over the past 18 months but said it was satisfied these were behind it 'and the shareholders can look forward to improved profitability in the future.

Occupancy rose to 85 per cent from 80 per cent but still had room to rise.

In addition to the acquisition of the 21 First Steps centres, Kidicorp has 500 new licenced spaces for completion within the next six months

ABC is still about half way through selling what had been a 5.4 per cent stake in Kidicorp which it owned through Child Care Centres Australia Ltd (CCA), which ABC took over last year. ABC has its own childcare operation in New Zealand.

- NZPA