Ann: Results of Meeting, page-5

THE RE-OPENING PLAY HIDING IN PLAIN SIGHT

"Since November last year when accelerated vaccine approvals gave the world a clear path out of the COVID pandemic, investors have constantly been searching for “re-opening” beneficiaries; stocks whose operations took a hit during enforced lockdowns and travel restrictions but should ride the tailwinds of pent-up demand as normality resumes.

The market was quick to find the obvious beneficiaries and re-price them accordingly such as travel, hospitality and tourism stocks.However, other not so obvious beneficiaries continue to seemingly offer value to investors willing to dig deeper and understand their business models and industry dynamics post-Covid. I believe one such example is Kip McGrath Education Centres.

KIP MCGRATH EDUCATION CENTRES (ASX: KME)

Kip McGrath is a leading provider of tutoring services to K-12 students, primarily in Maths and English. The business was founded by Kip McGrath in 1976 and has expanded from one tutoring centre in Maitland, NSW to 537 centres in 11 countries (primarily Australia and the UK) largely through a franchise business model. It is currently managed by Kip’s son Storm, with the father and son duo still owning around 30% of the business between them.

COVID brought significant disruption to Kip McGrath’s business, with lockdowns and travel restrictions meaning face to face tutoring became impossible. Kip McGrath had been developing their Kip Online system for some years prior to COVID, but penetration was minimal as tutors and parents/students were generally wary of the learning outcomes compared to face to face lessons. Pre-COVID, just over 1% of lessons were hosted online, but as tutors and students were forced online during COVID in FY21 that number was 40% of lessons."

More at merewe@[email protected].@u/blog/the-re-opening-play-hiding-in-plain-sight/ dated 25/11/21