ASX:KME

Stock Analysis Report

Kip McGrath Education Centres

Executive Summary

Kip McGrath Education Centres Limited provides supplementary English and maths education services in Australasia, the United Kingdom, Europe, and internationally.

Snowflake

Fundamentals

Outstanding track record with excellent balance sheet.

Risks

  • Kip McGrath Education Centres is not covered by any analysts.

Share Price & News

How has Kip McGrath Education Centres's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.9%

ASX:KME

-1.1%

AU Consumer Services

0.02%

AU Market


1 Year Return

85.0%

ASX:KME

33.1%

AU Consumer Services

4.8%

AU Market

KME outperformed the Consumer Services industry which returned 33.1% over the past year.

KME outperformed the Market in Australia which returned 4.8% over the past year.


Share holder returns

KMEIndustryMarket
7 Day0.9%-1.1%0.02%
30 Day18.7%-0.8%0.9%
90 Day14.4%10.3%6.8%
1 Year93.3%85.0%36.2%33.1%10.8%4.8%
3 Year317.2%258.1%11.8%4.5%38.0%20.1%
5 Year404.2%311.1%-5.7%-22.4%44.6%12.2%

Price Volatility Vs. Market

How volatile is Kip McGrath Education Centres's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Kip McGrath Education Centres undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Kip McGrath Education Centres's share price is below the future cash flow value, and at a moderate discount (> 20%).

Kip McGrath Education Centres's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Kip McGrath Education Centres is overvalued based on earnings compared to the AU Consumer Services industry average.

Kip McGrath Education Centres is overvalued based on earnings compared to the Australia market.


Price Based on Expected Growth

Unable to calculate PEG ratio for Kip McGrath Education Centres, we can't assess if its growth is good value.


Price Based on Value of Assets

Kip McGrath Education Centres is overvalued based on assets compared to the AU Consumer Services industry average.


Next Steps

Future Growth

How is Kip McGrath Education Centres expected to perform in the next 1 to 3 years based on estimates from 0 analysts?

0.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Unable to determine if Kip McGrath Education Centres is high growth as no revenue estimate data is available.

Kip McGrath Education Centres's earnings are expected to grow by 0.8% yearly, however this is not considered high growth (20% yearly).

Unable to compare Kip McGrath Education Centres's revenue growth to the Australia market average as no estimate data is available.

Kip McGrath Education Centres's earnings growth is positive but not above the Australia market average.

Kip McGrath Education Centres's earnings growth is positive but not above the low risk savings rate of 2.3%.


Earnings per Share Growth Estimates


Future Return on Equity

Unable to establish if Kip McGrath Education Centres will efficiently use shareholders’ funds in the future without estimates of Return on Equity.


Next Steps

Past Performance

How has Kip McGrath Education Centres performed over the past 5 years?

23.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Kip McGrath Education Centres has delivered over 20% year on year earnings growth in the past 5 years.

Kip McGrath Education Centres's 1-year earnings growth exceeds its 5-year average (47% vs 23.9%)

Kip McGrath Education Centres's earnings growth has exceeded the AU Consumer Services industry average in the past year (47% vs -1.5%).


Return on Equity

Kip McGrath Education Centres has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).


Return on Assets

Kip McGrath Education Centres used its assets more efficiently than the AU Consumer Services industry average last year based on Return on Assets.


Return on Capital Employed

Kip McGrath Education Centres has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Kip McGrath Education Centres's financial position?


Financial Position Analysis

Kip McGrath Education Centres's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Kip McGrath Education Centres's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Kip McGrath Education Centres's level of debt (4.8%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (26.5% vs 4.8% today).

Debt is well covered by operating cash flow (991%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 52x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 11.2x debt.


Next Steps

Dividend

What is Kip McGrath Education Centres's current dividend yield, its reliability and sustainability?

3.15%

Current Dividend Yield


Dividend Yield and Payments Analysis

Kip McGrath Education Centres's pays a higher dividend yield than the bottom 25% of dividend payers in Australia (2.53%).

Kip McGrath Education Centres's dividend is below the markets top 25% of dividend payers in Australia (5.79%).

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.5x coverage).


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


Next Steps

Management

What is the CEO of Kip McGrath Education Centres's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Storm McGrath (49yo)

12.5yrs

Tenure

AU$401,876

Compensation

Mr. Storm McGrath, MBA, has been the Chief Executive Officer of Kip McGrath Education Centres Ltd. since 2007 and served as its Joint Managing Director, Managing Director and Joint Chief Executive Officer. ...


CEO Compensation Analysis

Storm's remuneration is about average for companies of similar size in Australia.

Storm's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

3.3yrs

Average Tenure

The tenure for the Kip McGrath Education Centres management team is about average.


Board Age and Tenure

6.3yrs

Average Tenure

The tenure for the Kip McGrath Education Centres board of directors is about average.


Insider Trading

No 3 month individual insider trading information.


Recent Insider Transactions

BuyAU$23,76303 Apr 19
Diane Pass
EntityIndividual
Role
Member of the Board of Directors
Shares25,000
Max PriceAU$0.95
SellAU$36,35905 Feb 19
Kip McGrath
EntityIndividual
Role
Co-Founder & Non-Executive Chairman
Chairman of the Board
Shares45,710
Max PriceAU$0.80
BuyAU$49,72622 Oct 18
Trevor Folsom
EntityIndividual
Role
Member of the Board of Directors
Shares65,000
Max PriceAU$0.77
SellAU$35,28010 Oct 18
Kip McGrath
EntityIndividual
Role
Co-Founder & Non-Executive Chairman
Chairman of the Board
Shares45,000
Max PriceAU$0.78

Ownership Breakdown


Management Team

  • Storm McGrath (49yo)

    Chief Executive Officer

    • Tenure: 12.5yrs
    • Compensation: A$401.88k
  • Kip McGrath (72yo)

    Co-Founder & Non-Executive Chairman

    • Compensation: A$142.15k
  • Peter Hepp

    IT Manager

    • Tenure: 3.3yrs
    • Compensation: A$149.45k
  • Brett Edwards

    Company Secretary & CFO

    • Tenure: 7.8yrs
    • Compensation: A$236.62k
  • Brad Leach

    IT Development Manager

    • Tenure: 1.5yrs
    • Compensation: A$136.48k
  • Chris Lee

    Australian Operations & Sales Manager

    • Tenure: 1.4yrs
    • Compensation: A$47.42k
  • Jackie Burrows

    Chief Executive Officer UK Business

    • Compensation: A$163.77k
  • Catherine Cook

    Global Curriculum & Training Manager

    • Tenure: 3.3yrs
    • Compensation: A$179.76k
  • Julie Russell

    Global Marketing Manager

    • Tenure: 3.3yrs
    • Compensation: A$159.66k

Board Members

  • Kip McGrath (72yo)

    Co-Founder & Non-Executive Chairman

    • Tenure: 7.8yrs
    • Compensation: A$142.15k
  • Ian Campbell (70yo)

    Non Executive Director

    • Tenure: 9.9yrs
    • Compensation: A$72.15k
  • Trevor Folsom

    Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: A$62.15k
  • Di Pass

    Non-Executive Director

    • Tenure: 2.4yrs
    • Compensation: A$62.15k

Company Information

Kip McGrath Education Centres Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kip McGrath Education Centres Limited
  • Ticker: KME
  • Exchange: ASX
  • Founded: 1974
  • Industry: education services
  • Sector: consumer services
  • Market Cap: AU$50.210m
  • Shares outstanding: 45.23m
  • Website: Click here

Location

  • Kip McGrath Education Centres Limited
  • 6 Newcomen Street
  • Level 3
  • Newcastle
  • New South Wales
  • 2300
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KMEASX (Australian Securities Exchange)YesOrdinary SharesAUAUDAug 2003
KMECHIA (Chi-X Australia)YesOrdinary SharesAUAUDAug 2003

Biography

Kip McGrath Education Centres Limited provides supplementary English and maths education services in Australasia, the United Kingdom, Europe, and internationally. It sells franchises and offers services to ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/07/20 10:33
End of Day Share Price2019/07/19 00:00
Earnings2018/12/31
Annual Earnings2018/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.