In June last year Nord Anglia was eighth in Nursery Chains' league table of private providers, with 25 nurseries under the Princess Christian brand supplying 2,610 places. A solid, if not spectacular, mid-table performer - more Charlton than Chelsea - with a modest long-term objective to have 50 nurseries by 2010.
Then in September 2003, without great fanfare, the company acquired nine Petits Enfants nurseries. But it was early this summer that Nord Anglia revealed its expansionist plans by snapping up, at a cost of more than 73m, all 39 Leapfrog nurseries and 28 belonging to the ailing Jigsaw chain, propelling it up the table and making it one of the industry's big hitters (see box).
Small wonder that chief executive Andrew Fitzmaurice is bullish about the company's nursery business. 'It's obviously been pretty spectacular in terms of the increase in the number of units. We have trebled the number of units and more than trebled the number of places. It's been enormous growth,' he says.
While Asquith Court, through its recent merger with Kidsunlimited, retains top position as the newly-created Nursery Years Group, with 10,336 places, Nord Anglia is now the second largest provider of nursery places, with 9,833.
Mr Fitzmaurice says he is confident about Nord Anglia's future prospects and excited by recent Government initiatives, especially the 50 childcare voucher tax and national insurance breaks due to come in next April for approved care.
'The Government is obviously very committed to the early years and appears to be priming the pump through tax breaks so that people can use the private sector to deliver nursery care,' he adds.
Partnering the public sector But vouchers are not the only Government policy he is keen to embrace.
While some in the private sector are wary of the impact on their own businesses of the Government's spate of early years and childcare initiatives, such as children's centres and extended schools, and many chains shied away from involvement in what they regarded as the overly bureaucratic Neighbourhood Nurseries Initiative, Mr Fitzmaurice foresees Nord Anglia's nursery division working in partnership with the public sector.
He explains, 'Like most of these things, you can see them as a threat or an opportunity. The Government wants to spend significant amounts of money and to develop early years education and childcare throughout the country.
'We very much want to help them deliver that agenda, whether it is through providing places that they pay for in a direct way, running nurseries on their behalf in local authorities or NHS trusts, or in developing the children's centres. It might be that some of our nurseries can be turned into children's centres, or we can operate children's centres for the Government.'
Leapfrog brand In its year-end update produced in September, Nord Anglia said, 'The integration of the acquired businesses has proceeded satisfactorily and the initial trading performance of the enlarged nursery division is in line with management expectations.'
It added, 'Looking ahead one of the key attractions of the nursery business is that future trading performance can be predicted with a relatively high degree of accuracy as individual units mature.'
Mr Fitzmaurice says the company's confident outlook is underpinned by the belief that it has acquired a priceless asset in Leapfrog's central management, which he regards as 'the best in the industry'. And, he says, regional managers from the Jigsaw and Princess Christian nurseries are 'all of one voice, motivated, pleased with the structure and support they get from the centre. There is a real buzz about the place'.
A lead role in implementing the Leapfrog brand has fallen to Tracey Storey, the company's operations and human resources director, who was previously a part of the top management at Leapfrog prior to the takeover.
She says, 'The small central office team that we had to support the 39 Leapfrog nurseries has grown signficantly. There are several staff from the Jigsaw and Princess Christian teams who are integrating well with the Leapfrog team.'
Operating out of Leapfrog's Burton-on-Trent head office, she is part of a managerial trio with two colleagues from Leapfrog, finance director Mike Butcher and property director Ralph Minott. 'Our strength is that we work as a group of three across all these departments and they are not managed in isolation,' she says.
Ms Storey envisages that fully integrating policies and procedures and bringing the Jigsaw and Princess Christian nurseries fully under the Leapfrog brand will take around two years. Parental terms and conditions have been harmonised across all the nurseries and the process among staff should be finished by January next year.
She says that once the process is complete, many employees will enjoy enhanced salary and benefits packages, with improved holidays and greater access to training, professional development and career progression.
'Our salary packages are in the upper quartile of earnings and should meet people's aspirations,' she adds. But she concedes that 'in pure salary terms' the private sector will not be able to compete with Sure Start nurseries, which are offering more money and luring staff away from existing providers, including Leapfrog in the south-west.
'As an organisation we need to continually review the needs of staff within the sector as a whole. But I firmly believe job satisfaction is not just about salaries, it is also about the building in which the staff work,' she adds.
Leapfrog's purpose-built nurseries, she says, are subject to regular refurbishment. As part of the rebranding process, the Jigsaw and Princess Christian nurseries will be refurbished 'to bring them up to Leapfrog's standard'.
Undercover documentary But it has not been all plain sailing for the expanded chain. In August the BBC's 'Nurseries Undercover' documentary included secretly filmed footage of staff at a Petits Enfants nursery in Teddington, London, flouting basic hygiene regulations. It also claimed that staff had had their morning and afternoon breaks cut.
Mr Fitzmaurice says that it was 'very unfortunate that a nursery that we had acquired had not met the standards we set ourselves'. He says the film footage pre-dated the process of bringing all the nurseries up to the Leapfrog standard, adding, 'I am not sure whether staff missed breaks, but I can absolutely assure you that it is not the policy of our company.'
A bout of bad publicity will clearly not dent his belief that the best publicists and most effective advocates of a nursery business are parents, happy that their children are being cared for properly. They form part of what he regards as 'a virtuous circle', which creates a successful nursery.
Its constituent parts are a quality nursery, delivering quality daycare and good educational standards, and happy children. 'It's through your customers, your parents, that your reputation grows. You get more children coming to a nursery, filling it up and making it a successful business,' Mr Fitzmaurice says.
Boosting occupancy Raising occupancy levels in the Jigsaw and Princess Christian nurseries to the 80 per cent achieved in Leapfrog settings is a key priority. But he recognises that lifting occupancy above 90 per cent is harder because of the sessional nature of most nurseries and the increasing demand from working parents for flexible childcare, which results in nurseries being fuller on Tuesdays, Wednesdays and Thursdays.
'It is difficult to push beyond 90 per cent. But 80 per cent indicates a very successful nursery business,' he adds.
With the process of incorporating all the nurseries under the Leapfrog brand well-advanced and with a strong management team in place, Mr Fitzmaurice confirms that the company intends to keep growing its business.
'It could be through acquisition, it could be through further organic growth. There are a number of ways.' One of those 'ways' may well be via the latest Government initiatives. Watch this space.
FACTS ABOUT NORD ANGLIA
* Founded in 1972 by Kevin McNeany, now the non-executive chairman.
* April 2004: announces proposed acquisition of Leapfrog and its 39 nurseries for 60m. Leapfrog's former executive chairman Derek Mapp provides consultancy services for Nord Anglia but steps down at the end of August.
* May 2004: buys 28 Jigsaw nurseries for 13.2m on the day Jigsaw goes into administration.
* June 2004 sells its UK Schools business and declares that it will concentrate on its international schools. New school buildings in Shanghai, Budapest, Bratislava and Moscow opened in September.
* September 2004: reveals that it has lost some careers guidance contracts for 14- to 19- year-olds operated by Connexions partnerships which have reverted to local authority providers.