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  1. #11
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    Quote Originally Posted by steve fleming View Post
    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.
    Thanks Steve, have to be honest and say I purchased these as I have paid in NZ to another operation ( numberworks ) a reasonable sum over the past few years .So I was in the born2invest category mentioned above, however I do not think these guys have a monopoly there are a few operators in this space.I talked to a friend involved in private education , he explained that families still spent the money on the childrens education and cut back on holidays, dining out , and wine. Over the GFC they may have kept the kids in intermediate state school ( yr 7 & 8 ) instead of sending them off early to the secondary school private education. But now full on. So this is a space I am happy to be in .

  2. #12
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    I have not done any research on this but how would they stack up in terms of competition from the likes of the Khan Academy?

  3. #13
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    Quote Originally Posted by CAM View Post
    I have not done any research on this but how would they stack up in terms of competition from the likes of the Khan Academy?
    Neither have I, however using the Peter Lynch theory I would say "who?" Don't know them, Only know of Numberworks and KME. All else being equal more or less, you have to go for what you know.

  4. #14
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    Sorry I meant I do know them, and use them. Have my 6 year old on it. A guy at work has his 4 yeard old on it. Its free.
    Here is some info. http://en.wikipedia.org/wiki/Khan_Academy . But as an outtake...All resources are available for free to anyone around the world. Khan Academy reaches about 10,000,000 students per month and has delivered over 300,000,000 lessons
    What I was querying was whether KME have a slighly different business model so could co exist alongside something like this.

  5. #15
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    Gotcha now CAM

  6. #16
    ? steve fleming's Avatar
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    Quote Originally Posted by CAM View Post
    What I was querying was whether KME have a slighly different business model so could co exist alongside something like this.
    Models are pretty different.

    KME provides personalised tutoring/exam preparation to children based on the country’s/state syllabus. A mixture of face to face, online and blended tuition with qualified teachers/tutors.

    Khan provides a great service, but it is general online self-directed learning, so not personalised to the student or syllabus

    KME reckon they are a global market leader in tuition (based on their resources, systems and technology) but it’s a big market, room for a number of different players / education styles
    Share prices follow earnings....buy EPS growth!!



  7. #17
    percy
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    Well it has been a long weekend for me.Tried to buy 30,000 KME on Friday afternoon at 13 cents.I was the highest bidder.Was really after 60,000 at 15cents.At 5.30pm on Friday night NZ time seller appeared at 15cents.I could not get hold of my broker.Gone for the weekend,so I missed out.Left my bid in at 13cents.Then Steve started this thread.Bugger!!! Then today you all went ahead of me.Bugger again.Then at 4.45 I saw 94,000 go through at 15cents with one buyer for a 1,000 at 15 cents.I then put in my bid for 60,000 at 15cents.Going from what is left on the bid it looks as though I got 54,676.
    I rang the local Kip Mcgrath this morning.Woman has only had the franchise for a fortnight,however at a Barbie on Saturday she was talking with other local franchisee,who told her they were getting good growth and were looking to take on more franchises and put managers in.
    Just received the contract note,brought 60,000 at 15cents.

  8. #18
    ? steve fleming's Avatar
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    Quote Originally Posted by steve fleming View Post
    So the 90k order from Friday is now moved up to 18c….the seller wants out, so I still think he will come back down to 15c.
    Well that played out exactly as suspected.

    Sellers dropped into the 15c bid, with more to come…and no sellers left as order again removed at end of day

    Biggest volume day in KME in a while…..Wonder how many are left to come at 15c?
    Share prices follow earnings....buy EPS growth!!



  9. #19
    ? steve fleming's Avatar
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    Quote Originally Posted by percy View Post
    Well it has been a long weekend for me.Tried to buy 30,000 KME on Friday afternoon at 13 cents.I was the highest bidder.Was really after 60,000 at 15cents.At 5.30pm on Friday night NZ time seller appeared at 15cents.I could not get hold of my broker.Gone for the weekend,so I missed out.Left my bid in at 13cents.Then Steve started this thread.Bugger!!! Then today you all went ahead of me.Bugger again.Then at 4.45 I saw 94,000 go through at 15cents with one buyer for a 1,000 at 15 cents.I then put in my bid for 60,000 at 15cents.Going from what is left on the bid it looks as though I got 54,676.
    I rang the local Kip Mcgrath this morning.Woman has only had the franchise for a fortnight,however at a Barbie on Saturday she was talking with other local franchisee,who told her they were getting good growth and were looking to take on more franchises and put managers in.
    Just received the contract note,brought 60,000 at 15cents.
    Sorry Percy!....but at least you finally got your order filled!


    15c is a nice buy….I love these small, illiquid, profitable, fast growing type of stocks!


    The thing with illiquid micro-caps, when volume is there, you have to take the opportunities to grab it.


    Not saying this will do anything like MBE (as it lacks MBE’s supersized growth profile), but it is interesting to me that KME currently has the exact same historical valuation metrics as MBE did at 2c (m/c of $6m and EBITDA of $1.1m)
    Share prices follow earnings....buy EPS growth!!



  10. #20
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    Quote Originally Posted by percy View Post
    Well it has been a long weekend for me.Tried to buy 30,000 KME on Friday afternoon at 13 cents.I was the highest bidder.Was really after 60,000 at 15cents.At 5.30pm on Friday night NZ time seller appeared at 15cents.I could not get hold of my broker.Gone for the weekend,so I missed out.Left my bid in at 13cents.Then Steve started this thread.Bugger!!! Then today you all went ahead of me.Bugger again.Then at 4.45 I saw 94,000 go through at 15cents with one buyer for a 1,000 at 15 cents.I then put in my bid for 60,000 at 15cents.Going from what is left on the bid it looks as though I got 54,676.
    I rang the local Kip Mcgrath this morning.Woman has only had the franchise for a fortnight,however at a Barbie on Saturday she was talking with other local franchisee,who told her they were getting good growth and were looking to take on more franchises and put managers in.
    Just received the contract note,brought 60,000 at 15cents.
    What a nightmare! Maybe time for an on-line broker?

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