Pinned straw:
After the stumbles of the past couple of years, this business has it all to prove to the market. Hopefully they come good for those who kept the faith.
@Valueinvestor0909 I think this summed it up perfectly: "It comes down to, do you have trust in the Management that the investment it is doing is effective or burning cash."
The market clearly lost faith over the last couple of years and rightfully so given you weren't just seeing the return in the numbers to reflect the cash being invested for growth.
That said, today's update is more promising on that front. 20% group revenue growth is strong, and while we have to make some small assumptions as not all figures are provided but it seems like franchise/corporate revenue has grown 16% with Tutorfly making up the rest. Even adjusting for the fact there is natural revenue growth as corporate growth can cannibalise franchise revenue, the underlying metrics are solid with mid single digit growth in lessons plus some fee increases helping too. It would have helped to get an updated centre number to see if the consolidation of uneconomic centres has finished.
The growth in contracted revenue and district partnerships for Tutorfly is positive, but based on the FY outlook it seems to still be loss making. That may be palatable if it isn't completely wiping out the core business profit growth, and momentum in the US continues.
The comment about higher costs impacting first half results is ominous, the business has a natural 1H/2H split which was amplified last year to 33%/67% at the PBT level with the commentary potentially suggesting that will get worse. Let's wait and see.