The Kip McGrath Education Centres (ASX: KME) share price will be one to watch today after the education company upgraded its full-year guidance for revenue and EBITDA (earnings before interest, taxes, depreciation and amortisation).
The KME share price has fallen 13% in 2022 despite a few years of good results.
KME share price
In a very rare interview, Kip McGrath Education’s CEO, Storm McGrath, sat down with Owen Raszkiewicz on The Australian Investors Podcast to tell us about the business.
You can watch the podcast with Storm McGrath below. (Tip: be sure to subscribe to the podcast series on Apple, Spotify or Google to listen to the latest in ASX research and investor interviews).
KME CEO, Storm McGrath, on the Australian Investors Podcast
In an ASX filing on Wednesday morning, Kip McGrath said it expects to report a 25% increase in revenue for the full year, to around $24.2 million, with EBITDA rising 17% to between $5.8 million and $6.2 million.
KME owns and operates its own education centres, including offering online tutoring direct to students through its headquarters in Newcastle and the UK. However, it also has a huge franchisee network which is connected by master franchisees or ‘middle-men’. The top-performing franchisees and master franchisees often get repurchased by KME (the ASX-listed company) so that the parent company can benefit from their success.
“The tutoring landscape is evolving and we are increasingly working with government bodies to further develop our offerings, principally in the US with Tutorfly and through our key Master Franchisee in the Middle East.” – Storm McGrath, CEO
Management said they are currently launching their new software, which should support tutors and students with better tooling, automation and analytics. This could be important given the recent entry of competitors like Cluely Ltd (ASX: CLU).
At $0.88 per share, KME shares have a market capitalisation of around $50 million and trade on a dividend yield of approximately 2.5%, according to data from Morningstar.
