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Saturday 19 October 2019

Big childcare firms raking in handsome profits despite cost-intensive nature of the business

Successful: Deirdre Kelly, who is a director of Links Crèche and Montessori Ltd. Photo: Frank Mc Grath
Successful: Deirdre Kelly, who is a director of Links Crèche and Montessori Ltd. Photo: Frank Mc Grath
John Mulligan

John Mulligan

Parents hate it when crèche costs rise, instantly vaporising any meagre financial support given by the State.

The assumption is always that the crèche owners are raking in profits at the expense of parents and childminders, who in many cases are not earning much over the minimum wage.

We might rail against the cost, but at the same time we expect these poorly paid staff to provide unswerving care and attention to our offspring.

For full-time care, parents are often paying the equivalent of a second mortgage for childcare, and even more than that when two or more kids are factored into the equation.

It's a massive disincentive to working parents to stay in full-time employment, and an issue the Government has never and might never get to grips with.

So, are any of these chains making a mint from the financial hardship that crèche fees place on parents?

There's no doubt that running a crèche is both a labour and cost-intensive business, but despite that, some chains have managed to turn handsome profits and pay their owners well.

Safari Childcare in Dublin operates four crèches in Dublin and is owned by Cian Powell and Kevin McGuinness.

In its last financial year, which ended in November 2018, the chain made a profit after tax of €366,000 and had a retained profit of €1.4m.

It employed 51 childcare assistants at the end of the period. The previous year, it made a €284,000 profit.

One of the biggest chains in the greater Dublin area is the Links Crèche and Montessori business.

Owned by Deirdre and Padraig Kelly, the company has expanded from one premises about 15 years ago to 10 today.

Accounts for one company in the business - Links Crèche and Montessori Ltd - show that it made a €637,000 profit after tax in 2018 and had accumulated profits of €1.6m at the end of that financial year.

That firm employed 141 people, while the Kellys were paid a total of €175,000 by the company in 2018. In 2017, it made a pre-tax profit of €559,000.

Another company in the group - Links Crèche Southside - made a pre-tax profit of €570,000 in 2018 and €387,000 in 2017.

One of the country's biggest crèche chains - Giraffe Childcare - has 21 premises in the greater Dublin area.

It was bought last year by UK firm Busy Bees Nurseries for an undisclosed price.

Giraffe Childcare was an unlimited company until earlier this year, so did not have to file publicly available accounts.

Busy Bees Nurseries, which now has more than 300 premises, made a pre-tax profit of £5.5m (€6.2m) in 2017.

Irish Independent

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