Lessons from the sector

Welcome Nurseries: what one group’s administration shows about financial resilience

Welcome Nurseries grew to 32 sites across the north of England, then went into administration in August 2022. We look at what was reported and the practical lessons on growth, leases and cash flow.

Reviewed by Nursery Advice editorial teamLast updated 25 September 2026Next review 25 March 2027Editorial standards

About this case study

This page summarises matters reported publicly in 2022 and information from official registers. We make no allegation beyond what was reported. If you believe anything here is inaccurate, please contact us and we will review it promptly.

Welcome Nurseries was, for a time, one of the fastest-growing nursery groups in the north of England. By summer 2022 it operated 32 sites. Within weeks, it was in administration and six of those sites were set to close.

Nothing in the public reporting suggests the problem was the quality of care. Parents quoted in local coverage praised the staff. The problem was financial: growth that the business could not fund once trading conditions changed.

That makes it a useful case study for any owner thinking about a second site, an acquisition or a new lease.

Timeline of what was reported

Key events, from public reporting

When	What happened
Pre-2020	The group expands through a series of acquisitions, partly funded by deferred payments to sellers.
2020–2021	The pandemic hits occupancy and income across the sector.
November 2021	A new town-centre site on Halefield Street opens.
16 July 2022	That site’s landlord repossesses the premises, citing repeated late rent.
Early August 2022	Joint administrators are appointed.
August 2022	A pre-pack sale transfers 26 sites to a newly formed buyer. Six sites are not included.
2024	Companies House records Welcome Nurseries Ltd as dissolved [1].

Sources for the timeline: Consultancy.uk (“Welcome Nurseries selects Begbies Traynor for administration”, 17 August 2022), the St Helens Star (“Parents ‘devastated’ as Welcome Nurseries closed for ‘not paying rent’”, 29 July 2022), and the Companies House register [1].

Why the group failed

Coverage of the administration explained that, after a run of pre-Covid acquisitions, the group was unable to meet its ongoing operating costs and repay the deferred consideration it owed. Deferred consideration is the part of a purchase price paid to the seller after completion, often in instalments.

Deferred payments make acquisitions easier to start, but they create fixed future debts. Those debts assume the acquired nurseries keep trading as they did before the sale. When occupancy fell during the pandemic, income dropped while the debts stayed the same.

The lease: where problems become visible

The first public sign of trouble was one site closing suddenly. The St Helens Star reported a “Notice of Forfeiture by the Landlord” taped to the gates. The landlord said rent had been paid on time only once since the nursery moved in eight months earlier. The company initially blamed hot weather for the closure, and planned reopening dates were put back twice.

For owners, the lesson is that rent is usually your second-largest cost after staff, and a commercial landlord can move quickly. Before you sign a lease:

Model rent at your realistic first-year occupancy, not your target.
Negotiate a rent-free or stepped-rent period while you build numbers.
Understand forfeiture and break clauses before you sign.
Keep at least three months of rent in reserve for each site.

Our nursery business plan template shows how to build a break-even model that includes these costs.

Communication with families and staff

Local reporting described parents being “left in the dark”, scrambling for other childcare while reopening dates slipped. Staff were worried about their jobs. However difficult the finances, silence does lasting damage to reputation and trust.

If you face a closure or a change of ownership, tell families and staff early, give them realistic dates, and point parents towards alternatives. Families can search nearby day nurseries on Nursery Advice.

What a pre-pack administration means

In a pre-packaged (pre-pack) administration, the sale of all or part of a business is agreed before the administrator is appointed, and completes immediately after. The Insolvency Service regulates insolvency practitioners and sets the rules for pre-pack sales [2].

In this case, the reporting said the pre-pack saved more than 300 jobs and continued care for around 450 children at the 26 transferred sites. The remaining six sites were due to close.

The wider sector pressure

Welcome Nurseries was not unusual in facing cost pressure. Funded hours now make up a large share of many providers’ income, and the hourly rates are set by local authorities from national funding. Our guide to funded hours rates for providers explains how rates are calculated and what that means for your pricing.

A financial resilience checklist

Before you expand

Question	Healthy answer
Break-even occupancy per site	Known, and comfortably below current occupancy.
Cash reserve	At least three months of fixed costs.
Deferred or loan repayments	Affordable at 15 percentage points below current occupancy.
Lease terms	Break clause, stepped rent, forfeiture terms understood.
Income mix	Funded and private income modelled separately.
Management capacity	Each site has a strong manager in place before you add another.
Monthly reporting	Occupancy, wage ratio and cash forecast reviewed every month.

How Nursery Advice helps protect occupancy

Occupancy is the number that makes or breaks nursery finances. A claimed Nursery Advice listing puts your fees, availability, photos and ethos in front of parents searching locally. Claim your listing or see what a claimed listing includes.

Related reading: nursery marketing ideas, and our case study on suitability lessons from Claire’s Children’s Nurseries.

Frequently asked questions

What happened to Welcome Nurseries?

The group went into administration in August 2022. A pre-pack sale transferred 26 of its 32 sites to a new buyer, and six sites were due to close. Companies House later recorded Welcome Nurseries Ltd as dissolved.

Why did Welcome Nurseries go into administration?

Public reporting said that, after a series of pre-Covid acquisitions, the group could not meet its operating costs and repay the deferred consideration it owed to sellers, after the pandemic affected trading.

How many children and staff were affected?

The pre-pack was reported to have saved more than 300 jobs and continued care for around 450 children at the transferred sites.

What is deferred consideration?

It is part of a business purchase price paid after completion, usually in instalments. It becomes a fixed debt for the buyer, whatever happens to trading.

Does Ofsted registration transfer when a nursery is sold?

Generally no. Registration belongs to the registered provider, so a new owner usually needs to register with Ofsted before running the setting.

How much cash reserve should a nursery hold?

There is no legal minimum, but many advisers suggest at least three months of fixed costs (wages, rent and utilities) to cover seasonal dips and late funding payments.

About this guide & sources

Every numerical claim in this guide is sourced from UK government, NHS or recognised charity publications. We re-check each source on the article’s review date.

Companies House — WELCOME NURSERIES LTD (12027560): company overview (retrieved 2026-09-25)
GOV.UK — The Insolvency Service (retrieved 2026-09-25)
legislation.gov.uk — Childcare Act 2006 (retrieved 2026-09-25)

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