Kip McGrath Education Centres Limited (KME) AI Stock Analysis

• Market Cap: AU$23.05M
• Dividend Yield: 1.23%
• Average Volume (3M): 36.51K
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.20
• Revenue Growth: 11.73%
• EPS Growth: 66.51%
• Country: AU
• Employees: 25
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Education & Training Services
• EPS (TTM): 0.04
• Shares Outstanding: 56,907,190
• 10 Day Avg. Volume: 35,279
• 30 Day Avg. Volume: 36,511
• PEG Ratio: 0.22
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.06
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Kip McGrath Education Centres Limited demonstrates strong revenue growth and a robust balance sheet, which are key strengths. However, the declining profit margins and negative free cash flow raise concerns about operational efficiency. The technical analysis suggests a bearish trend, but the RSI indicates that the stock may be nearing oversold conditions, offering potential upside. The stock's valuation is fair, providing a reasonable entry point for investors. Overall, while there are challenges, the company's solid financial foundation and potential for price recovery contribute to a moderate positive outlook.

Kip McGrath Education Centres Limited Business Overview & Revenue Model

Company Description

Kip McGrath Education Centres Limited (KME) is a global education company that specializes in providing personalized tutoring services for students of all ages. With a focus on core subjects such as mathematics and English, KME operates through a network of franchised and company-owned centers worldwide. The company aims to improve student learning outcomes by offering tailored educational programs designed to meet individual learning needs.

How the Company Makes Money

Kip McGrath Education Centres Limited makes money primarily through its franchise model, where franchisees pay fees to operate under the Kip McGrath brand. Revenue is generated from initial franchise fees as well as ongoing royalty payments, which are typically a percentage of the franchisee's revenue. Additionally, KME offers its own company-owned centers, contributing direct revenue from tutoring services. The company may also earn income from the sale of educational materials and resources. Partnerships with schools and other educational institutions can also supplement their revenue by expanding their reach and client base.

Kip McGrath Education Centres Limited Financial Statement Overview

Summary

Kip McGrath Education Centres Limited exhibits strong revenue growth and a stable balance sheet with low leverage, which provides a solid foundation for future growth. However, declining profit margins and negative free cash flow raise concerns about operational efficiency and cash management. The company should focus on improving cost controls and optimizing capital expenditures to enhance profitability and cash flow stability.

Income Statement

The company showed strong revenue growth with a 20.9% increase from the previous year. However, gross profit margin decreased slightly from 38.2% to 32.7%, indicating rising costs or pricing pressures. Net profit margin decreased from 7.2% to 4.1%, suggesting challenges in cost control. EBIT and EBITDA margins also declined, reflecting reduced operational efficiency.

Balance Sheet

Kip McGrath maintains a solid financial position with a debt-to-equity ratio of 0.16, indicating low leverage risk. The equity ratio improved to 68.0%, showing strong equity financing. Despite these strengths, return on equity decreased to 5.6%, suggesting lower profitability from equity investments.

Cash Flow

The company experienced a negative free cash flow growth, dropping from 2.8 million in 2023 to negative 1.6 million in 2024, reflecting increased capital expenditures. Operating cash flow to net income ratio was positive at 2.17, indicating good cash generation relative to net income, but free cash flow to net income was negative, highlighting cash flow volatility.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
32.71M	32.22M	26.65M	24.63M	19.24M	17.09M
	Gross Profit
16.12M	10.54M	10.18M	9.67M	8.09M	7.61M
	EBIT
7.59M	1.75M	2.51M	2.46M	1.95M	2.16M
	EBITDA
5.58M	6.61M	6.79M	6.21M	5.12M	5.21M
	Net Income Common Stockholders
2.00M	1.32M	1.92M	1.88M	1.73M	1.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.73M	5.40M	9.15M	7.63M	10.57M	12.18M
	Total Assets
35.42M	34.88M	37.11M	36.38M	30.73M	29.42M
	Total Debt
3.26M	3.69M	3.63M	3.15M	2.21M	3.27M
	Net Debt
-2.47M	-1.71M	-5.52M	-4.48M	-8.36M	-8.91M
	Total Liabilities
10.87M	11.18M	14.03M	14.45M	12.27M	11.57M
	Stockholders Equity
24.55M	23.70M	23.08M	21.92M	18.46M	17.85M
Cash Flow		Free Cash Flow
4.58M	-1.57M	2.81M	277.00K	1.37M	25.00K
	Operating Cash Flow
5.11M	2.86M	6.37M	5.05M	6.16M	3.32M
	Investing Cash Flow
-2.64M	-4.44M	-3.57M	-6.96M	-4.79M	-3.30M
	Financing Cash Flow
-3.17M	-2.18M	-1.28M	-1.04M	-2.63M	4.75M

Kip McGrath Education Centres Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.41
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:KME, the sentiment is Negative. The current price of 0.41 is below the 20-day moving average (MA) of 0.42, below the 50-day MA of 0.44, and below the 200-day MA of 0.43, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 40.81 is Neutral, neither overbought nor oversold. The STOCH value of 13.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:KME.

Kip McGrath Education Centres Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KME	75 Outperform	AU$23.05M	11.47	8.55%	1.23%	11.73%	66.51%
IEL	66 Neutral	€2.68B	28.17	16.90%	2.09%	-11.89%	-41.91%
GEM	64 Neutral	AU$1.05B	15.51	7.43%	4.23%	3.24%	21.10%
Sector *	61 Neutral	$6.92B	11.84	3.00%	3.95%	2.60%	-21.94%
SXL	55 Neutral	€170.33M	―	-71.41%	1.66%	-7.85%	-3088.82%
JAN	47 Neutral	AU$38.98M	―		―	6.10%	51.94%
AKG	45 Neutral	AU$15.91M	―	-17.65%	―	-0.14%	67.13%

Kip McGrath Education Centres Limited Corporate Events

Leadership Change at Kip McGrath Education Centres

Kip McGrath Education Centres Limited announced that Storm McGrath has ceased to be a director as of May 5, 2025. This change in leadership could impact the company’s strategic direction and stakeholder relations, as McGrath held significant direct and indirect interests in the company’s securities.

Kip McGrath Announces CEO Transition

Kip McGrath Education Centres Limited announced the end of Mr. Storm McGrath’s tenure as CEO and Managing Director after nineteen years. To ensure continuity, Non-Executive Chair Damian Banks will take on the role of Executive Chair during the transition period as the company searches for a new CEO, expected to be appointed later in 2025.

Kip McGrath Education Centres Cancels 60,000 Performance Rights

Kip McGrath Education Centres Limited announced the cessation of 60,000 performance rights, which were canceled by mutual agreement between the entity and the holder. This move may impact the company’s capital structure and could reflect strategic adjustments in its financial or operational strategies.

Kip McGrath Announces CFO Transition

Kip McGrath Education Centres Limited has announced a change in its executive team, with Brett Edwards stepping down as Chief Financial Officer effective April 11, 2025. Roxana Lupou, the current Global Financial Controller, will serve as Interim CFO, bringing over 20 years of financial leadership experience to the role. This transition may impact the company’s operations and market positioning as they begin the search for a permanent CFO.

Kip McGrath Director Increases Stake Through DRP

Kip McGrath Education Centres Limited announced a change in the director’s interest, with Storm McGrath acquiring additional shares through a Dividend Reinvestment Plan. This change in shareholding reflects the director’s increased stake in the company, potentially signaling confidence in the company’s future performance and stability, which may positively impact stakeholder perceptions.

Kip McGrath Education Centres Lists New Securities on ASX

Kip McGrath Education Centres Limited has announced the quotation of 64,671 fully paid ordinary securities on the Australian Securities Exchange (ASX). This move is part of the company’s strategy to enhance its financial standing and potentially expand its market presence, impacting its operations and stakeholders positively.

Kip McGrath Updates Dividend Reinvestment Plan Dates

Kip McGrath Education Centres Limited announced an update regarding its dividend distribution, specifically changing the last date for lodgement of election notices for the Dividend Reinvestment Plan (DRP) to March 14, 2025. This update reflects the company’s commitment to maintaining clear communication with its shareholders and ensuring accurate information dissemination, which is crucial for its market operations and stakeholder relations.

Kip McGrath Director Increases Stake in Company

Kip McGrath Education Centres Limited announced a change in the director’s interest, with Damian Banks acquiring an additional 100,000 indirect securities through an on-market trade, increasing his total indirect holdings to 800,000. This acquisition reflects a strategic move by the director, potentially indicating confidence in the company’s future prospects and stability, which may have implications for stakeholders and the market perception of the company’s performance.

Kip McGrath Education Centres Issues Investor Update Highlighting Investment Risks

Kip McGrath Education Centres Limited has released an investor update, emphasizing the informational nature of the presentation and cautioning against relying on it for investment decisions. The update highlights the inherent risks associated with investing in the company and disclaims any guarantees regarding future performance or returns, urging potential investors to conduct their own due diligence.

Kip McGrath Announces Dividend Distribution for 2025

Kip McGrath Education Centres Limited has announced a dividend distribution of AUD 0.005 per share for its ordinary fully paid securities. The dividend relates to the financial period ending on June 30, 2025, with key dates including an ex-date of March 12, 2025, and a payment date of March 27, 2025. This announcement reflects the company’s financial health and commitment to returning value to its shareholders, potentially impacting its market positioning and stakeholder relations positively.

Kip McGrath Reports Strong Financial Turnaround and Declares Dividend

Kip McGrath Education Centres Limited reported a significant financial turnaround for the half-year ended December 2024, with revenues increasing by 2.4% to $15.25 million and a remarkable 955.6% rise in profit after tax to $616,000. The company declared a fully franked interim dividend of 0.5 cents per share, reflecting its improved financial health and commitment to shareholder returns.

Kip McGrath Announces FY25 Half Year Investor Webinar

Kip McGrath Education Centres Limited announced an upcoming investor webinar hosted by CEO Storm McGrath and CFO Brett Edwards, scheduled for February 27, 2025. The webinar will follow the release of the FY25 Half Year Report, providing insights into the company’s performance and future outlook, potentially impacting its market positioning and stakeholders.