Lets look at performance since 2011 when they sold their higher education business, and decided to focus on their tutoring business only, naturally if you sell a part of your business, revenues will fall. So lets look at some key metrics for the subsequent years : FY11, FY12 and FY13
|
FY11 |
FY12 |
FY 13 |
Revenue (m) |
6.435 |
7.912 |
9.644 |
EBITDA (m) |
-0.098 |
0.842 |
1.172 |
|
|
|
|
EBITDA margin (%) |
-2% |
11% |
12% |
|
|
|
|
rev growth % |
|
23% |
22% |
EBITDA growth % |
|
|
39% |
|
|
|
|
Cash flow from ops |
0.129 |
0.533 |
0.904 |
CF growth % |
|
313% |
70% |
The revenue, EBITDA and CF growth looks pretty compelling to me
This is since they have undertaken a series of initiatives to improve their online/cloud service offerings, and more importantly, focused on expanding those franchises that pay a franchise fee as a % of student fees (up to 20%), rather than a fixed fee. Post year end , they have rolled out further online offerings, plus their tie up with google
In these types of plays, you have to put a bit more effort to understanding the story.
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