Childcare centres were last reviewed in Business Values Newsletter No. 121 in October 2012. The industry continues to change and grow. Key drivers are variances in government subsidy models, as well as operating regulations. Both of these factors continue to evolve. In general terms the level of government subsidy is increasing. However, at the same time regulation and operating costs are also increasing. This keeps pressure on profit margins for operators.
Current Industry Make-Up
The industry is made up of three main services:
- Long daycare (62.5% of revenue) – provision of care for children below school age, typically where both parents work. Types of centres include traditional childcare centres, kindergartens, pre-schools and early learning centres. Care given can be all day or part day.
- Outside of school hours care centres (34.3% of revenue) – mainly for primary school aged children during, before and after school hours. These centres often extend to vacation care and longer term daycare over school holiday periods.
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