Company Report
Last edited 3 years ago
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#Small US Acquisition
stale
Added 3 years ago

KME has taken a 70% stake in the US based business Tutorfly.com. (‘Tutorfly’). McGrath will take a 70% stake in the business for an initial payment of USD 500,000 via its newly incorporated subsidiary, Tutorfly Holdings Inc. The remaining 30% will be held by the founders through their existing company, Tutorfly Inc. Kip McGrath will make a further payment of USD 500,000 to Tutorfly Inc. when Tutorfly achieves USD20,000 per month net revenue targets (calculated as revenue less tutor fees). 

Under the Agreement Kip McGrath grants an option for Tutorfly Inc. to sell its remaining 30% stake to Kip McGrath for USD 2,000,000 in cash, an equivalent number of Kip McGrath shares or a mixture of cash and shares.

Tutorfly is an incubator tutoring business concentrating on the peer-to-peer section of the market, which achieved rapid growth during its initial start-up phase. The business has developed a scalable technology stack which demonstrated rapid growth in the 2020/21 US school year, increasing quickly from 1,300 to 5,500 active students, peaking at 3,200 hours of tutoring per month. 

KME is dipping the toe into the US market which is considerably larger than the Australian market.   This may or may not be a good move as I'm assuming that competition will be fierce.  At least the bet is quite small and the upside potential large.

 

#Company Updates
stale
Added 3 years ago

17 Aug 21: KME provided a company update mainly about the buyback of the Scotland franchise.  This transaction is expected to have a positive impact on EBITDA of $100,000 for the 2022 financial year.

However, of importance, the company’s unaudited results for FY2021 indicate revenue is over 10% higher than last year, while EBITDA and NPAT are in line with the prior year’s result.  The company said, given the difficult ongoing trading conditions globally with the COVID19 pandemic, the Board is pleased with these results.

 

Doesn't looklike the shift to online lessons has impacted KME financials yet.

#Trading Update - Online shift
stale
Added 4 years ago

29 May 20: Prior to Covid-19, 36,000 face to face lessons and 550 online lessons per week.  Last week, 20,000 online lessons and 2,400 face to face lessons.  While total lessons are still down, shown a significant shift in the way business will be delivered in the future.

 

Made significant changes to the costs base and remain CF positive.  Rev for 10 months to 30 Apr is $14.3m, +12.4% pcp and expected to be ahead of last year for FY20.  Cash position similar to start of FY.  EBITDA is slightly lower than previous 10 months. 

 

Reached a pivotal point in how we deliver education.  Exponentially accelerated this change from what we believed would take years to months.