A chain of childcare centres with 300 staff has gone into liquidation owing $20million to creditors as work-from-home arrangements destroyed its business model.
Seven Precious Cargo childcare centres and two offices in Adelaide were placed into liquidation on Tuesday, with a recent $4.8million sale of assets to a listed company failing to clear its debts to suppliers and the tax office.
Adelaide-based business advisory firm Heard Phillips Lieberenz is now in charge of winding up the company, with directors Andrew Heard and Anthony Phillips appointed as liquidators.
Mr Heard told Daily Mail Australia work-from-home arrangements had destroyed the profitability of the company, as average occupancy levels for its businesses plunged to just 61 per cent.
‘Occupancy levels were lower than anticipated, lower than ideal,’ he said.
‘It’s a fairly competitive environment for childcare centres.
‘I would have no doubt that people working from home arrangements that became more common after Covid perhaps meant that there was less demand for childcare places.’
The childcare centres had prided themselves on offering food from commercial kitchens, dinners for children, music rooms, and playgrounds with chickens and vegetable gardens.
A creditor’s report, obtained by Daily Mail Australia, showed Precious Cargo owed $19.9million to creditors, who included landlords, suppliers and almost $2million to the tax office.
‘It won’t be able to be repaid,’ Mr Heard said.
A chain of childcare centres based on the Montessori teaching method has gone into liquidation
Mayfield Childcare in August settled on a $4.8million deal to buy seven Adelaide childcare centres, so Precious Cargo could pay off a Commonwealth Bank loan.
Cheryl Shigrov founded Precious Cargo Education in 2006 after volunteering at her son’s Montessori preschool as play group co-ordinator and teacher’s assistant
But the buyer, listed on the Australian Securities Exchange, also took on $528,260 in parental bonds and $1.1million in employee entitlements which also included wages.
Precious Cargo also owed $1.245million to Eastwood Securities, a property mortgage company, and had $14.456million worth of loans within the group.
The South Australian government was owed $54,384 in payroll tax.
The total liabilities added up to $19.912million, with the company having assets of just $263,306.
Precious Cargo’s website said it had 400 staff but Mr Heard put the employee figure at 300.
Mayfield Childcare in July announced it would buy seven Precious Cargo centres in Adelaide for $4.8million during the September quarter, with this transaction including business goodwill of $467,264.
The deal, settled on August 16, included the brand name and intellectual property for the centres at Blackwood, Collinswood, Lockleys, Marion, St Peters, Westbourne Park and Woodville Park.
These centres still feature of Precious Cargo’s website.
Mayfield Childcare had told the Australian Securities Exchange it had declined to acquire the other four ‘underperforming’ Precious Cargo centres that were initially in liquidation under insolvency firm Meertens.
Nine Precious Cargo centres in Adelaide were placed into liquidation on Tuesday
These centres had been sold in late 2023 and early 2024, and included Myrtle Bank in Adelaide, Heatherton in Melbourne, and Welland in Adelaide.
Precious Cargo had previously sold two centres at Woodcroft and Aldinga more than a decade ago.
Cheryl Shigrov founded Precious Cargo Education in 2006 after volunteering at her son’s Montessori preschool as play group co-ordinator and teacher’s assistant.
‘I am also a strong advocate of better pay and conditions for educators, including through the child care industry’s union, United Voice,’ she said.
‘My vision is to create a business model that gives back to the community and offers a unique and interconnecting range of businesses that support the improvement of humanity.’
Precious Cargo’s initial liquidation announcement with the Australian Securities and Investments Commission, affecting 11 centres, was made in early June, two days before the Fair Work Commission awarded a 15 per cent pay increase to childcare workers.
Prime Minister Anthony Albanese in August announced his government would set aside $3.6billion to fund this double-digit pay increase, which will see the first 10 per cent rise come into effect in December followed by the other 5 per cent in December 2025.
Adelaide-based business advisory firm Heard Phillips Lieberenz told Daily Mail Australia work-from-home arrangements had destroyed the profitability of the company, as average occupancy levels for its businesses plunged to just 61 per cent
This will see childcare worker pay rise by $103 a week before Christmas, increasing to at least $155 a week from December 2025.
Ms Shigrov in June made it clear financial issues, unrelated to industrial relations, had led to her winding up her childcare centres.
‘In recent years there have been some challenges that the company has not been able to overcome that have been experienced sector-wide,’ she told her Facebook followers.
‘In my role, I as director, take responsibility for not being able to navigate these challenges.
‘To our children, families and staff, I apologise that my journey has come to a close, but ask that you work together with the administrators and I to find a way forward to preserve Precious Cargo and bring it back to a thriving entity.’
The Montessori teaching method, which Precious Cargo subscribed to, focuses on letting children choose their own activities, with an emphasis on creativity and age-tailored lessons.
