Teather & greenwood Enterprise INvestment Scheme aims to build and operate day nurseries
Teather & Greenwood Investment Management has launched an Enterprise Investment Scheme (EIS) which will build and operate children's day nurseries.
Childcare Corporation 5 plc will seek to raise in the region of £10m to be used to construct and administer around 10 new nurseries. The company's business plan also involves buying an existing nursery while suitable construction sites are found for the new nurseries to ensure the prompt commencement of EIS qualifying trade.
To raise finance the company will issue 10 million ordinary shares at £1 per share.
The minimum investment is £2,000, with no upper limit, although income tax relief is only on the first £150,000. Investors may subsequently increase the size of their holdings by multiples of £1,000.
Introductory intermediary commission is 2.5%, and the investment deadline for the 2001/2002 tax year is 5 April. The deadline for the 2002/2003 tax year is 31 May 2002.
Previous Childcare corporation EISs have raised £12.5m since the launch of the original company in March 1999. The company will provide day nursery facilities for children aged between three months and five years.
It is intended that the nurseries will be open five days a week from 8am to 6pm, with children divided into separate age groups for education, recreation and care.
The directors expect that the average fees payable per child per week will usually exceed £130 on a full-time basis.
The board of directors intends to target sites in the Midlands and Southern England suitable for the construction of nurseries with an initial capacity of about 100 children.
The cost of acquiring each suitable half acre site has been estimated at between £250,000-£300,000, although this may be considerably higher in the vicinity of London.
Dividends, which under this structure would not be tax-efficient, will not be paid during the three year period from the closing of the offer, any profits will instead be reinvested back into the business.
The senior managers and advisers all have experience either in the childcare industry or the commercial property sector and believe that there is ample evidence to demonstrate that the recent pattern of steady growth in the demand for day nursery provision in recent years is set to continue.
According to the company's prospectus, despite recent rapid growth in the number of nursery places available nationwide, a government drive to increase the amount of nursery provision to allow more mothers with young children to return to the workforce, means demand in this area is likely to continue to exceed supply.
A childcare tax credit has been introduced to assist lower paid parents with the cost of childcare.
This takes the form of a means-tested subsidy of up to 70% of childcare costs up to a maximum of £135 per week for the first child and up to £200 per week for two or more children.
In addition the proportion of mothers in paid employment outside the home has grown from 52% to 62% in 10 years, while the proportion of mothers with children under the age of five who work has risen from 32% to 51%.
Further information is available on 020 7426 9079
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