Childcare company Kidicorp has turned around two years of losses and predicts profits will continue to rise, thanks to increased government subsidies.
The country's biggest provider of private childcare centres yesterday reported an unaudited net profit of $1.5 million for the year to March 31, up from a loss of
$746,920 the previous year and a loss of $11.6 million in the March 2004 year.
Total operating revenue was up 31 per cent to $32 million.
Executive director Wayne Wright said the main reason for the financial turnaround was returning to in-house management.
He said Kidicorp terminated its management arrangement with Australian company Peppercorn Management Group in March last year after Peppercorn was taken over by New Zealand operator ABC Learning Centres.
"We had to unwind that management agreement and that cost us a lot of momentum and money," Wright said.
The company had also better utilised corporate costs as the number of its centres grew.
Kidicorp increased the number of children it is licensed to care for by 59 per cent to 3373 this year. It owns and operates 70 early learning centres under 33 brand names.
Wright said the Government's programme to provide 20 free hours of early childhood education for children aged three and four from July next year would help growth.
"We think that next year, with the introduction of the 20 free hours, the same number of children will attend considerably more hours."
The company would continue to expand by building its own centres.
Wright said Kidicorp was developing centres in Hawkes Bay, Tauranga and Taranaki.
The company was aiming to increase its number of centres by up to 20 per cent a year.
The main barrier was an "acute" shortage of qualified teachers and a recruitment manager had been appointed to address the problem.
Wright expected the demand for early childhood care to increase despite the number of children aged under 5 being forecast to decrease.
Shares in Kidicorp last traded unchanged at 18.5c, compared with a year high of 22c and a low of 12c.
