Kip McGrath Education Centres H1 2023 report

Kip McGrath Education Centres Limited (ASX: $KME) has reported a 20.1% increase in revenue for the first half of 2023, driven by strong growth in all key markets. The global corporate business now operates 35 centres, up from 26 in the previous year, and has seen a 25% revenue increase from student lessons.

Managing Director and Chief Executive Officer's report

The Managing Director and Chief Executive Officer, Storm McGrath, expressed disappointment with the overall results, citing specific factors that impacted EBITDA by $1.2M. These included additional costs of $250,000 for recent corporate centre acquisitions, a $490,000 loss from scaling costs and delayed revenue in the Tutorfly business, and the loss of revenue from a large Abu Dhabi schools' contract. Despite these challenges, the global network revenue for the half year was $53.9M, up 5% from the same period last year, with sturdy growth in the US and UK markets.

Outlook and Future Plans

Looking ahead, Kip McGrath Education Centres anticipates a strong global tuition market and parent demand, with a focus on restoring margins through technology enhancements. The company expects Tutorfly's profitability to improve in the second half, aided by the new centre scheduled to open in Dallas. Despite the disappointing half-year result, the company foresees the full-year profit for FY24 to be in line with the prior year. The Board has resolved not to pay an interim dividend, emphasizing the focus on maintaining a cash position to fund current commitments and future opportunities.