th, page-5

Obdurate,

The thing about childcare is everyone thinks its a cashcow because we all pay $50+ per day for our kid, some of which is subsidized by the government...must be a winner huh?

Not so. In actual fact a centre generally needs to be above 80% occupancy before it makes money. Even the busiest centres find this hard to achieve as poeple only want certain days, they must maintain fixed ratio's of age groups and manage this as children transition between groupings.

So even if there are centres operating at 90-95% (you can't get 100% unless you are oversubscribed), there will always be the 80% or less places dragging the chain.

On top of this there is a militant government organization full of bored beaurocrats who love nothing better than taking a break from their morning donuts to roll up en mass to a centre to breach them on a chip of paint taken out from the exterior walls (extreme..but making a point).

Add to this the wage pressure from some of the most underpaid people in the country (looking after our children!), and the fact that childcare centres are best run by smaller owner operators - these guys are up against it before they even pay themselves big salaries.

There will always be childcare centres, might be better investing in the freeholds instead (Don't know if there are any listed vehicles that do this).

Just my thoughts.