Little bit going on at Kip McGrath Education (KME) over the last week that deserves some attention
Firstly, they gave a trading update for the 4 months to 31 October showing a 2% gross revenue reduction YOY but confirmed their earlier forecast of an 'early double-digit' NPAT increase for the full year. This comes despite closing 10 underperforming centres and serves to highlight how reliable the core business continues to be. If we add 10% to FY25 NPAT from continuing operations, we get $2.52m NPAT on a current market cap of $31.4m which is a forward P/E of 8x. Seems relatively cheap. They also have over two years worth of NPAT in cash on hand ($5.6m) and are in the middle of a gentle share buyback, with the possibility of either increased dividends or other capital returns.
Secondly, previous CEO and son of the founder Storm McGrath just sold down his entire 9.3% holding in an off-market transaction at a 10% discount to market of $0.45. The buyer of most of these shares? It was @BkrDzn's old mate Harley Grosser and HD Capital Partners, who have gone substantial with a 7.5% holding. I imagine we'll see a well worded investment thesis on Livewire soon from Harley.
Thirdly, relatively new chairman Damian Banks bought a further $100k of stock last week which you always like to see.
So all in all, a few things seemingly moving in the right direction for KME
Disc - Held in RL
