Childcare centre operator Kidicorp said today the termination of its arrangements with Peppercorp last month may explain its share price fall.
NZX has asked the company to explain a 26 per cent, 6c, fall in Kidicorp's share price since March 10 and whether it was still complying with disclosure rules.
"The directors confirm that they believe the company is complying and are not aware of any reason behind the recent decline," company secretary Bruce Woodward said in a letter of response to NZX.
"However, they suspect that it may be a consequence of the earlier announcement on February 25 that the company had terminated the management agreement entered into between Kidicorp and Peppercorn Management Group of Australia."
The agreement, whereby Peppercorn was appointed to manage childcare centres in New Zealand owned by Kidicorp, was terminated subsequent to the takeover of Peppercorn by the Australian company, ABC Learning Centres.
ABC has acquired a 5.4 per cent stake in Kidicorp through Child Care Centres Australia Ltd (CCA), which it took over last year, and has told Kidicorp it was "non-commital" on retaining the stake.
Kidicorp shares were up 1c to 18c today. They have traded between 16c and 30c in the last year.
- NZPA
