• Underlying FY25 revenue expected to grow 6.3-7.3% ex-US
• Underlying FY25 EBITDA expected to grow 15.7-21.4%
• Exiting unprofitable USA operations, recognizing $5m asset write-off

Kip McGrath Education Centres Limited (ASX:KME) has provided a trading update (unaudited) for FY25, as well as announced that it is ceasing funding for and subsequently exiting its USA Businesses. The company's Executive Chair, Damian Banks, stated that the expansion into the USA has proved to be uneconomic and is unlikely to become profitable even with further investment. The Tutorfly business acquired to spearhead the USA expansion has not proven to be a sustainable model, leading to operating losses of around A$1.4m in FY25. As a result, the Board has decided against investing further capital and will exit the USA operations, which will be reported as a discontinued business. This decision will result in the recognition of a A$5.0m asset write-off, as well as exit costs. The company also announced the upcoming commencement of a new CEO, Melinda Smith, in the second half of 2025, and the recognition of associated contractual entitlements, legal, and recruitment costs outside of the underlying results. Additionally, the company will recognize the vacated Newcastle premises as an onerous lease. Despite these one-time charges, the company's underlying FY25 performance is expected to be strong, with revenue growth of 6.3-7.3% (excluding the USA) and EBITDA growth of 15.7-21.4%.

Revenue Guidance (unaudited): Total Revenue $31.0m - $31.3m, US Revenue (discontinued) $0.4m, Underlying Revenue (ex US) $30.6m - $30.9m Underlying and Statutory EBITDA Guidance (unaudited): Underlying EBITDA $8.1m - $8.5m, USA Discontinued EBITDA $(2.0)m, Statutory EBITDA $0.4m -$0.8m including $0.6m exit costs