RedHill (ASX:RDH) operates a number of specialist businesses in the private tertiary education market in Australia. It delivers vocational and higher education courses in English language, creative digital technologies, and interior design to over 4,000 domestic and international students each year. RDH has been quietly growing both its revenue and EBITDA over the last few years. In FY15, RDH reported revenue of c.$23m (+18%) and EBITDA $3m (+11%). We forecast EBITDA growth of c.20% per annum over the next three years. We like RDH's focus on quality courses and student outcomes. It is with this in mind that they seek to increase their current capacity by 50% via expansion into Melbourne. We believe that the Melbourne opportunity is the catalyst to drive further growth in the business. RDH has consistently maintained their discipline and conservatism as evidenced by their net cash balance of c.$6m. We also admire their focus on organic growth over acquisitive growth. Click the link for our detailed thesis. (VIEW LINK)


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James Marlay

Interesting read Lachlan and thanks for taking the time to share with Livewire.