Ann: Appendix 4E and 30 June 2017 Annual Report, page-13

@WHY @long-haul @Fire Bull
This is the best opportunity I have seen on the ASX in years and have acquired a reasonable position.

The accounting masks very strong FCF generation and the FCF yield I am getting at between 15 and 20% assuming that the intangible expense is sustaining capex which I am not sure that it is. The improving business is being masked by a shift from lower margin student lessons' revenue decline and higher margin franchising fees. @WHY has answered his/her own question - the EBITDA HoH mild improvement is more or less solely due to increased marketing spend and it remains to be seen what the ROI of that incremental spend will be, but it is needed for there to be any growth from this model.

There is almost no risk acquiring at these prices and a substantial reward if things pay off.

What I am however curious about from anyone who knows- what are the terms for franchisees/ and how does it compare to Kumon. It seems clear to me that KME offers a superior service to Kumon for students but am not sure that the franchises are better off- until they hit the sweet spot of profitable franchises compared to competitors the growth may be middling... irrespectively on that sort of yield you can afford to wait and see what happens and let the dividends roll in...

Interested to hear others thoughts?