Another company has been dragged into the controversy surrounding JobKeeper, with Mayfield Childcare planning to pay out $2.4 million in dividends despite claiming millions of dollars in taxpayer support in 2020.
Less than a week after furniture company Nick Scali came under fire for boosting its dividend on the back of JobKeeper payments, Mayfield Childcare revealed in its annual report that it made $4.5 million in net profit in 2020 – up 17.9 per cent on 2019.
That came after it received $12.4 million in taxpayer handouts.
On Monday, the company reversed an earlier decision to scrap its 2020 dividend. It will instead pay out 2 cents a share.
Mayfield joins a growing group of profitable companies that have held onto stimulus payments while funnelling profits to investors.
More are expected to join them as the corporate reporting season kicks into gear throughout February, with Treasurer Josh Frydenberg continuing to resist calls to reveal which profitable companies have socked away taxpayer cash.
In disclosures to the ASX, Mayfield revealed its revenue rose 3.6 per cent to $37.1 million in 2020. But it said it would have fallen 31.1 per cent without JobKeeper and other support payments provided to childcare providers.
The company received $4.3 million in JobKeeper handouts and $4.3 million under the Early Childhood Education and Care Relief Package, which provided free childcare to parents.
It was also awarded a $1.8 million transition payment after free childcare was scrapped in July and a further $2 million in a third round of support in September.
All that taxpayer dosh helped Mayfield increase its operating margins from 2 per cent to 25 per cent, sending earnings to $6.2 million.
Meanwhile, Mayfield’s wage costs fell 1.2 per cent in 2020 to $19.9 million, with JobKeeper covering 17.7 per cent of the $24.2 million it would have otherwise paid.
And the company retains a $8.7 million credit line.
In lieu of government transparency, investor disclosures like Mayfield’s are the only way taxpayers can find out which publicly-listed companies received JobKeeper handouts and went on to pay hefty dividends to shareholders – a practice Labor MP Andrew Leigh has dubbed “DividendKeeper”.
Last week, retailer Nick Scali revealed it had kept $3.6 million in wage subsidies despite booking a 90 per cent increase in profits to $40.6 million. It also increased its interim dividend by 60 per cent to 40 cents a share.
Others, including Toyota, Super Retail Group and Iluka Resources, have voluntarily handed back a combined $30.1 million.
Katie Hepworth, director of workers’ rights at the Australasian Centre for Corporate Responsibility, said companies risked “losing their social licence” by paying dividends after receiving JobKeeper.
“ACCR is concerned about reports that companies in receipt of JobKeeper are paying dividends to shareholders,” Dr Hepworth told The New Daily in an email.
“Stimulus measures were established to protect the long-term value of companies, and to ensure that they maintain a qualified and experienced workforce that would allow them to emerge successfully on the other side of this pandemic.”
Mayfield said the support the company received helped it deliver services to families during the pandemic.
“Federal government funding initiatives have clearly validated the sector fundamentals and the essential nature of early childhood education to our community,” Mayfield said in a statement on Monday.
Mayfield did not respond to a request for comment before deadline.