Kitchen sinking it ahead of the new CEO's arrival, but making all the right moves especially cauterising the Tutorfly wound.
Kip McGrath provides FY25 Trading Update (unaudited) and USA announcement
24 June 2025 : Kip McGrath Education Centres Limited (ASX:KME) today provides a trading update (unaudited) for FY25
and announces it is ceasing funding for and subsequently will exit from its USA Businesses.
Kip McGrath’s Executive Chair, Mr Damian Banks, said “Today we are announcing an underlying FY25 trading update as
well as a number of non-recurring charges to be taken during the half. We are also announcing that we will cease
funding and will therefore exit from the USA operations of Tutorfly and closure of our Frisco tutoring centre effective 27
June 2025. The expansion of the Kip McGrath business into the USA has proved to be uneconomic and likely to remain
so even if persevered with by the Company.
The Tutorfly business that was acquired to spearhead the USA expansion has not proved to be a sustainable business
model. Under the weight of operating losses (circa A$1.4m in FY25), the Board has decided against investing further
capital. We are grateful for the support of the students, parents, schools and our staff who have partnered with us.
As a consequence of this decision the USA operations will be reported as a discontinued business and our investment
and deferred tax assets will be either fully impaired or written off. In addition, we will recognise the exit costs as part
of the discontinued business.
The company has recently announced our new CEO, Melinda Smith will commence in the second half of 2025. The
company will be recognising the contractual entitlements, and legal and recruitment costs of the changeover of CEO as
outside of the underlying results.
Finally, the Company having transferred its registered office from Newcastle to Sydney, will recognise the vacated
Newcastle premises as an onerous lease, outside of the underlying results presented.”
