• Revenue up 1.6% to $15.2m, EBITDA up 3.9% to $4.3m
• Dividend increased to 1.0c per share
• Lesson numbers down 5% but average lesson charge up 8.5%

Kip McGrath Education Centres has reported its H1 FY26 results, with revenue up 1.6% to $15.2m and EBITDA up 3.9% to $4.3m. The company has also increased its dividend to 1.0c per share, up from 0.5c per share in H1 FY25. The revenue growth was driven by a 2.9% increase in franchise revenue, partially offset by flat corporate revenue. By region, APAC revenue grew 0.7%, while UK revenue grew 3.6% (2.6% in constant currency). The company's cash flow remained strong, with investing outflows mainly due to technology capex and financing outflows consisting of a share buyback, lease payments, and the FY25 final dividend. Centre numbers decreased from 469 at December 2024 to 437 at December 2025, with gold centres consolidating from 328 to 321 and silver & other centres falling from 88 to 79. Lesson numbers declined 5%, driven by an 8.6% drop in the UK, while APAC remained flat. However, the average lesson charge increased by 8.5% from $57.50 to $62.40, reflecting the value parents place on the company's service offering. The franchise fee percentage also increased from 17.9% to 18.1% and is expected to plateau at 18.5% to 19.2% over the medium term. Network revenue has continued to grow, up 2.9% to $54.1m.

For FY26, lesson numbers are expected to be down by mid-single digits, driven by the impact of H1 centre closures on the full year. Revenue is expected to be flat, with business mix and price changes being offset by the impact of a strengthening AUD on the translation of UK revenue and lower lesson numbers. Expenses are expected to decrease by low-single digits due to cost control and the impact of a strengthening AUD on the translation of UK expenses. NPAT is expected to increase by early double digits. Capex is expected to be circa $1.4m, consisting of technology ($1.0m), centre acquisitions ($0.2-$0.3m), and other ($0.1m).

The company has identified several key initiatives to focus on in 2026, including a policy review, curriculum review and refresh, lead generation and nurturing, improved customer service, policy change and implementation framework, systems and resources, franchisee collaboration, and consistent clear communication. These initiatives are aimed at improving the company's strengths, improving franchisee satisfaction, increasing lesson numbers, and supporting retention.