ABC Learning

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ABC Learning Centres

Type	Public (ASX: ABS)
Founded	1988
Headquarters	Brisbane, Australia
Key people	Eddy Groves, CEO
Industry	Child care
Website	http://www.childcare.com.au

ABC Learning Centres Ltd. is an Australian company that is the world's largest provider of childcare services. It is listed on the Australian Stock Exchange with a market capitalisation of $2.5 billion as at March 2006.

1 History
2 Controversy and criticisms
3 Notes
4 External links

[edit] History

ABC Learning was founded in 1988 in Ashgrove, Brisbane, Queensland by Eddy Groves, now the Global Chief Executive Officer of the company. Co-founder Le Neve Groves, is a senior executive and is also a major shareholder in ABC. The husband and wife jointly own 14.5% of the company. ABC rapidly expanded, reaching 43 childcare centres by June 30, 2001. By November 2005, it had 697 childcare centres throughout Australia and New Zealand. In March 2006, it forecast that would have 950 centres in Australia and New Zealand by June 30, 2006.

It has purchased the third largest childcare operator in the United States Learning Care Group Inc. which itself operates 467 centres in the US and other educational facilities in south-east Asia. The purchase provides the ABC Learning with 70,000 additional licensed childcare places in addition to the 50,000 it had previously. Other mergers with Pepercorn Management Group and the purchase of Child Care Centres Australia helped provide a considerable increase in the number of ABC's centres. The company plans to increases its number of centres by four a week.^[1] In March 2006, it announced a bid for Kids Campus, one of its few remaining large competitors in Australia^[2] which would give it another 106 centres.^[3]

On December 13, 2006 it was announced that ABC would acquire the second largest child care provider in the United States, Chicago based La Petite Academy for 330 million US Dollars as well as the 5th largest provider in the UK, Busy Bees Group, Ltd. With these acquisitions they are expanding into the UK market and increasing their market share in the US to 1%.^[4]

It has expanded aggressively into the outsourcing of child care services, negotiating deals with some of Australia's largest employers including the Australian Department of Defence which involved taking over the Department's nineteen childcare facilities. Aside from offshore expansion, the company is also expanding in training and education. It runs the ABC Early Childhood Training College, providing training for childcare workers, publishes a magazine Small Wonders aimed at parents with young children.

It is a highly profitable company, in the FY2004/5 recording net profit after tax of $52.3 million on total revenues of $292.7 million. The six months ending 31 December 2005 showed no slowing in the financial momentum for the company with profit after tax reaching $38 million and revenues of $219.8 million.

[edit] Controversy and criticisms

Critics of ABC Learning say it is making these considerable profits at the expense of Australian taxpayers whose money subsidises the use of childcare with means-tested tax rebates. ABC Learning received $128 million of its revenue from government subsidies in the last financial year.

There is also controversy about the dramatic expansion of the company with claims that in some areas ABC - by acquisition - has achieved a monopoly in the provision of childcare services. The Australian Competition and Consumer Commission reviewed the company's acquisition of Peppercorn and permitted the deal to go ahead after imposing certain conditions including a requirement to close centres in some areas and agreeing not to purchase in other areas.

ABC Learning is also using its considerable financial resources to support challenges to regulations governing childcare and enforcing vicarious liability on the company. In one case, in 2006 it challenged a $200 fine imposed by a Victorian Magistrate for the actions of its staff who failed to adequately supervise a two-year old child who escaped from a centre in suburban Melbourne and was found by a neighbour and brought back to the centre. It argued that the company had done all it could reasonably be expected to do to provide facilities that made escape difficult and that any legal liability should rest with the staff involved.

In August 2006 ABC Learning pleaded guilty to 'Failing to Inclose' in the Fremantle Magistrates Court and were fined $1300. A three-year old boy escaped from the centre in Lynwood, Western Australia, through a broken fence and was found by staff in a nearby car park.