Education entrepreneur Kip McGrath has retired from his namesake company with tutoring centres around the world, leaving a lasting legacy that began more than four decades ago in the Hunter Valley of NSW.
The announcement comes shortly the board forecast net profit after tax for Kip McGrath Education Centres (ASX: KME) would be up 30 per cent year-on-year in FY19 at $2.6 million.
The outgoing chairman co-founded the business with his wife Dugnea McGrath in 1976, starting out in the family garage and growing the group to teach literacy and numeracy around Australia and the world.
KME has more than 560 tutoring centres of which more than 140 are in Australia, with a presence as well in New Zealand, Asia, the Middle East, Africa and Europe.
Like so many the company fell on hard times during the GFC, but has steadily recovered with a strong performance in particular since January 2017 with its share price more than tripling in value.
In his chairman's address at the KME AGM in October, McGrath highlighted 41 per cent profit growth in FY18 representing the seventh consecutive year of profit growth.
"The reason for this increase in profit is an increase in the number of students taught. This is not only a good outcome for the company, but it is good for our franchisees with most increasing student numbers," he said at the time.
"It doesn't cost the company much more to service the franchise network with increased student numbers, so we have shown a significant improvement in margins. This trend should also continue in future years.
"Onscreen tutoring (online tutoring) continues to be a likely contributor to increased profit in the future. We are attempting to reproduce the 'in-centre' experience online."
In yesterday's resignation announcement, McGrath said he was leaving KME in a strong position, and as its largest shareholder he looked forward to the exciting business plan being executed and a continuation of growing profits.
"'It was during a stay in hospital last week I realised I no longer had the enthusiasm for the role I have had up until now," he said.
"I believe at my age it is time to fully retire and enjoy the time I have left. However, as the founder of the business I have knowledge about the business and how the educational content should be best delivered.
"I have therefore agreed to make myself available to the board to offer advice if they consider this to be necessary."
The board thanked McGrath for his "enormous contribution" over 42 years in building a business that now provides over 1.3 million lessons a year to students in 14 countries worldwide.
Director Ian Campbell, who has been a director of KME since 2009, will step into the chairman role.
The co-founder's son Storm McGrath has also been appointed as a director.
Business News Australia
Get our daily business news
Sign up to our free email news updates.