TIDMMLVN
RNS Number : 2553H
Malvern International PLC
06 June 2017
6 June 2017
Malvern International PLC
("MLVN" or the "Company" and together with its subsidiaries,
the" Group")
Final results for the year ended 31 December 2016
Malvern International plc (AIM: MLVN), the provider of
educational services in the UK, Europe and Asia, announces its
results for the year ended
Key Points
-- Revenues GBP4.0m (2015:GBP4.8m)
-- Operating loss of GBP1.45m (2015: loss of GBP1.61m)
-- Loss before tax of GBP 1.34m (2015: loss of GBP 1.65m)
-- Loss per share of 1.84p (2015: loss 2.84p)
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
Enquiries:
Malvern International www.malverninternational.com
PLC
Haider Sithawalla +65 641 20733
Dr Sam Malafeh +65 838 60155
WH Ireland Limited (Nomad www.whirelandcb.com
and Broker)
Mike Coe
Ed Allsopp +44 (0)117 945 3470
CHAIRMAN'S STATEMENT
Overview
2016 was both challenging and exciting. The company responded to
the challenges which included severe competition, uncertainties
created by Brexit in Britain and changing policies in other markets
in three ways. First the two largest shareholders, namely KSP and
CG Group made available substantial funding, without interest for
the present to strengthen the balance sheet. Second, we recruited a
dynamic young educationist from New Zealand Dr. Sam Malafeh, as the
Deputy CEO of the Group in charge of operations. He has also
invested GBP 450,000 to indicate his commitment to the company.
Third, with new funding and new management we revamped our
offerings and now stand poised to launch IT related subjects
including courses related to cyber security and analytics in
partnership with specialists in these areas.
As part of the new strategy, the name of the Company was changed
from AEC Education Plc to Malvern International Plc on 13th
September 2016. This was to link the parent company to its
subsidiaries which have been operating under Malvern name. The
Mission of the group is to be a Global Learning and Skills
Development Partner to those who come to us to improve their
employable opportunities.
The new management team has also set up fresh guidelines on
quality assurance to take Malvern International Plc to a higher
international level that not only complies with the relevant
territory's regulatory requirements but also exceeds consumer and
market expectation. The quality improvement plan started in late
2016 and continues into 2017 with series of internal audits taking
place to assure the improvement.
Malvern International has also as mentioned earlier set up a new
learning technology division to offer technology based products to
other education providers looking for new ways of teaching/learning
methods and products. This is being done in collaboration with
Playware Studios in Singapore, which has patented digital learning
technology that has won several awards globally. At the same time,
we are also developing a number of other new programmes and these
will be announced as and when they are finalised for introduction
to the market in 2017 and 2018. The new products are expected to
bring additional returns to Malvern in 2017 and the years
ahead.
The implementation of the new strategy takes time and requires
investment towards improvement of the quality of the service
provided in different countries; this would involve a change in
management and operations, developing new programmes and new
technology products, and establishing a larger and stronger
international marketing team. Hence the performance of the Group
for the year 2016 was not much different from that in 2015.
However, the Board is confident that going forward we are on the
right track and the performance of the Group in 2017 onwards should
show significant improvement.
In July 2016, the Group disposed of its Dublin subsidiary in
which it had 55% interest for EUR660,000 (equivalent to GBP554,909)
to enable the Group to focus on its 100% owned UK operation. The
activities for Dublin have been classified as a discontinued
activity for the year ended 31 December 2016 and the comparatives
have been restated accordingly. The 50/50 partnership contract with
Cyprus ended in August 2016 and this was not renewed.
Financial results and business review
Group
In 2016 the total revenue for the continuing operations of the
Group was GBP3,992,581. This was 17% less than the Group revenue
from continuing operations in 2015 of GBP4,794,168. The fall was
mainly due to the fall of revenue in UK of GBP1.1m which was
partially offset by the increase in revenue from Asia of GBP0.3m.
As mentioned in previous reports, UK continued to be impacted by
restrictions of working hours allowed under student visas, the
terror threat and the uncertainty of the possible effects of
Brexit.
As a result of the decrease in revenue for the 2016 financial
year, the Group incurred a loss after tax of GBP1,373,410 on the
continuing business as compared to the loss of GBP1,669,763 in 2015
which included impairment charges of GBP900,000 made against
goodwill and intangible assets. In FY 2016, the impairment was at
GBP150,000
However, after taking the gain on the sale of shares in Dublin
operations and the six-month operating profit for Dublin totalling
GBP573,800, the Group comprehensive loss after tax in 2016 was
GBP820,681 (2015 - GBP1,718,798).
Hence net loss per share for the year on a continuing basis for
2016 was 1.84p compared to 2.84p for 2015 and the net cash at the
end of the year stood at GBP0.12m ( 2015 - GBP0.42m).
During 2016, the Board has undertaken an impairment review of
the carrying value of its goodwill and intangible assets within the
consolidated financial statements of the investments held within
the Group in accordance to the process set out in 2015, which takes
into consideration our business plan and growth strategies for the
Group going forward. Based on this review, an impairment provision
of GBP150,000 was made for the year 2016.
Subsidiaries
With the sale of shares in Dublin and the discontinued business
arrangement in Cyprus, the European Sector now comprises only the
UK operations. The Southeast East Asia/Middle East sector comprises
Singapore and Malaysia. Brief summary of these two sectors is set
out below:
United Kingdom (Malvern House)
The revenue of the United Kingdom operations in 2016 was down by
45% to GBP1.3m compared to the revenue of GBP2.4m in 2015. Despite
this sharp drop in sales, UK was able to contain its operating
losses before tax to GBP433k which was only worse than the
operating losses in 2015 of GBP384k by GBP49k . This was achieved
through cost cutting measures that were undertaken during the past
couple of years.
Despite the poor performance of the UK operations in 2016 and in
the past years, the Board is still very positive about its
potential going forward. It recognises that UK and especially
London will continue to be a popular destination for education.
Although the student numbers coming to UK have been falling because
of the reasons already mentioned earlier in this and past
statements, they can be increased again if the courses offered are
widened to include skills development programmes This will attract
not only overseas students but also UK residents. Hence the main
thrust of the Strategic Plan mentioned earlier is to widen the
scope of the programmes offered and strengthen the marketing
network with strong management control and supervision.
Southeast Asia comprises Singapore and Malaysian operations.
The total revenue for Southeast Asian operations in 2016 was
GBP2.7m compared to GBP2.3m in 2015. This was an increase of 14%.
However, despite this increase in revenue the sector incurred an
operating loss of GBP311K as compared to the operating loss for the
2015 financial year of GBP80k due to higher operating costs in
Malaysia and further provisions for bad debts. The Malaysian
operations made a marginal operating profit of GBP20K and the rest
of the losses came from Singapore operations.
The Group has invested heavily in Singapore to prepare for the
re-application of Edu Trust Certification which enables the
operation not only to enrol overseas students but also to offer
overseas diploma and degree programmes. The application for this
certification has now been made and the inspection is expected to
take place soon. Once this certification is obtained Singapore will
be able to drive up its revenue by offering a wide range of
programmes that have been developed or are in the process of being
developed both to attract students in Singapore and from other
countries.
The Malaysian operation is progressing well and is expected to
continue to be profitable going forward. The Malaysia operation has
also been through some changes to create a more sustainable
business aligned with the new strategy of the group. The Board is
also looking at the possibility of further expansion of the
operations to the different states in Malaysia.
Dividend
The Board does not propose the payment of a final dividend for
the year ended 31 December 2016 (2015: nil).
Prospects
The past few years have been difficult years for the Group.
However, the Board is confident that with the reorganised
management and marketing teams and proper and gradual
implementation of the New Strategic Plan (which covers development
and marketing of new and wider range of programmes), the impact on
the performance of the Group will be positive going forward and
bring the Group to profitability within a year or two.
Acknowledgements
On behalf of the Board I would like to thank all staff members
for their continued dedication, commitment, and cooperation during
what has been a very difficult period. We look forward to their
continuing support going forward in implementing the new plans to
bring back the Group to profitability in the years ahead.
We also would like to extend our appreciation and thanks to all
our business partners, students, associates and valued shareholders
for their support throughout the year and look forward to the same
in the years ahead.
Finally, I would like to personally thank all members of the
Board for their time and guidance at the Board level and the
various committee levels in which they serve.
Gopinath Pillai
Chairman
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2016
2016 2015
restated
GBP GBP
Revenue
Sale of services 3,992,581 4,794,168
Other income 52,104 261,467
4,044,685 5,055,635
Cost of services sold 2,210,611 2,418,647
Salaries and employees' benefits 1,158,797 1,292,034
Amortisation of brand, licences
and trademarks 158,333 165,165
Depreciation of plant and equipment 77,579 101,244
Other operating expenses 1,744,219 1,788,167
Impairment of goodwill - 404,352
Impairment of intangible assets 150,000 495,648
Operating loss (1,454,854) (1,609,622)
Share of results of associated
companies and joint ventures 49,898 965
Finance costs 61,919 (36,960)
Loss before income tax (1,343,037) (1,645,617)
Income tax charge (30,373) (24,146)
Loss for the year from continuing
activities (1,373,410) (1,669,763)
Profit for the year from discontinued
activities 573,800 262,431
Loss for the year (799,610) (1,407,332)
Attributable to:
Equity holders of the Company (799,610) (1,525,426)
Non-controlling interest - 118,094
(799,610) (1,407,332)
2016 2015
restated
Loss per share on continuing
activities (in pence)
Basic (1.84) (2.84)
Diluted (1.84) (2.84)
Profit /(loss) per share on discontinued
activities (in pence)
Basic 0.77 0.42
Diluted 0.77 0.42
Loss per share attributable to
equity holders of the Company
(in pence)
Basic (1.07) (2.42)
Diluted (1.07) (2.42)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
2016 2015
GBP GBP
Loss for the year (799,610) (1,407,332)
Foreign currency translation
movements (21,071) (311,466)
Total comprehensive income for
the year (820,681) (1,718,798)
Attributable to:
Equity holders of the parent (820,681) (1,857,769)
Non-controlling interest - 138,971
Total comprehensive income for
the year (820,681) (1,718,798)
STATEMENTS OF FINANCIAL POSITION
Group
2016 2015
GBP GBP
TOTAL ASSETS
Non-Current Assets
Property, plant and
equipment 188,835 348,251
Investment in subsidiary - -
companies
Investment in joint
ventures - 89,675
Intangible assets 2,144,264 2,445,611
Development Expenditure 1,505 -
Goodwill 1,312 1,312
Deferred tax asset - 17,120
2,335,916 2,901,969
Current Assets
Inventories 3,129 9,142
Trade receivables 460,939 575,952
Other receivables
and
prepayments 619,993 804,003
Tax recoverable 32,539 13,020
Amounts due from - -
subsidiary companies
Amounts due from
joint ventures 27,841 32,428
Amounts due from - -
related parties
Cash and cash equivalents 116,541 416,268
1,260,982 1,850,813
Total Assets 3,596,898 4,752,782
EQUITY AND LIABILITIES
Non-Current Liabilities
Financial liabilities 24,447 7,492
Deferred taxation
liability - 3,323
24,447 10,815
Current Liabilities
Trade payables 170,675 535,940
Deferred income 243,297 756,282
Other payables and
accruals 809,824 1,487,997
Amounts due to a - -
subsidiary
Amounts due to related
parties 1,223,256 1,589,052
Financial liabilities 4,823 31,383
Provision for income
tax 9,626 18,949
2,461,501 4,419,603
Total liabilities 2,485,948 4,430,418
Share capital 6,823,838 5,362,491
Share premium 896,111 896,111
Retained earnings (7,785,081) (6,964,400)
Translation reserve 1,005,522 965,602
Capital reserve 170,560 170,560
1,110,950 430,364
Non-controlling interests - (108,000)
Total equity 1,110,950 322,364
Total Equity and
Liabilities 3,596,898 4,752,782
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
Share Share Share-Based Retained Translation Capital Attributable Non-
Capital Premium Payment Earnings Reserve Reserve To Equity controlling Total
Reserve Holders Interests
of the
Company
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2015 5,362,491 896,111 - (5,444,476) 1,297,945 170,560 2,282,631 (246,971) 2,035,660
Loss for the year - - - (1,525,426) - - (1,525,426) 118,094 (1,407,332)
Total other comprehensive
income - - - - (332,343) - (332,343) 20,877 (311,466)
Total comprehensive
income for the
year - - - (1,525,426) (332,343) - (1,857,769) 138,971 (1,718,798)
Unclaimed dividends - - - 5,502 - - 5,502 - 5,502
Balance at 31
December 2015/
1 January 2016 5,362,491 896,111 - (6,964,400) 965,602 170,560 430,364 (108,000) 322,364
Loss for the year - - - (820,681) - - (820,681) 108,000 (712,681)
Total other comprehensive
income - - - - 39,920 - 39,920 - 39,920
Total comprehensive
income for the
year - - - (820,681) 39,920 - (780,761) 108,000 (672,761)
New Share Issues - - - 5,502 - - 5,502 - 5,502
--- --- --- ------ ------ ------ 1,461,347 - - - - - 1,461,347 - 1,461,347
Balance at 31
December 2016 6,823,838 896,111 - (7,785,081) 1,005,522 170,560 1,110,950 - 1,110,950
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015
restated
GBP GBP
Cash Flows from Operating
Activities
Loss before income tax from
continuing activities (1,343,037) (1,645,617)
Profit/(loss) before income
tax from discontinued activities 573,800 262,431
Adjustments for:
Amortisation of intangible
assets 158,333 165,165
Depreciation of property, plant
and equipment 77,579 150,016
Impairment of goodwill - 404,352
Impairment of intangible assets 150,000 495,648
Loss on disposal of plant and
equipment 43,533 9,920
Non-cash elements of profit (308,082) -
on discontinued activities
Interest expense 61,919 43,747
Others - 965
(585,955) (113,373)
Changes in working capital:
Receivables 120,356 (137,221)
Payables (817,411) (63,954)
Inventories 3,424 (2,424)
Related parties and associated
companies 683,662 632,497
(595,924) 315,525
Taxation 7,797 (24,867)
Net cash used from operating activities (588,127) 290,658
Cash Flows from Investing Activities
Interest received - -
Dividends received
Purchases of property, plant and - -
equipment (45,899) (90,649)
Purchase of trademarks and licences - -
Net cash used in investing activities (45,899) (90,649)
Cash Flows from Financing Activities
Interest paid (61,919) (43,747)
Repayment of term loan - (37,204)
Finance leases (9,605) (38,964)
Unclaimed dividends returned - 5,502
New Share Issues 428,992 -
Net cash generated by/(used in)
financing activities 357,468 (114,413)
Effect of foreign exchange rate
changes on
consolidation (23,169) (30,074)
Net decrease in cash and cash equivalents (299,727) 55,522
Cash and cash equivalents at the
beginning of the
Year 416,268 360,746
Cash and cash equivalents at the
end of the year 116,541 416,268
NOTES
1. General Information
Malvern International plc (the "Company") is a public limited
liability company incorporated in England and Wales on 8 July 2004.
The Company was admitted to AIM on 10 December 2004. Its registered
office is Witan Gate House, 500-600 Witan Gate West, Milton Keynes
MK9 1SH and its principal place of business is in Singapore. The
registration number of the Company is 05174452.
The principal activities of the Company are that of investment
holding and provision of educational consultancy services. The
principal activity of the group is to provide an educational
offering that is broad and geared principally towards preparing
students to meet the demands of business and management. The
specific principal activities of the subsidiary companies are set
out in note 12 to the financial statements. There have been no
significant changes in the nature of these activities during the
year.
2. Segmental Information
All revenue and profit before taxation arises from operations in
the education sector. Reportable segments are based on the
geographical area where operations are based comprising Europe (UK
and Cyprus) and South East Asia/Middle East (Malaysia and
Singapore). These segments represent the respective sub-groups of
Malvern House Group Limited (Europe) and Malvern Singapore (South
East Asia/Middle East).
The segmental analysis is as follows:
Europe Asia Total
2016 GBP GBP GBP
Revenue from external customers 1,314,904 2,677,677 3,992,581
Depreciation, write offs
and amortisation (92,852) (293,060) (385,912)
Loss before taxation (528,355) (814,682) (1,343,037)
Taxation charge - (30,373) (30,373)
Profit on discontinued activities 573,800 - 573,800
Loss for the year 45,445 (845,055) (799,610)
Segmental assets 1,018,926 2,577,972 3,596,898
Segmental liabilities (1,022,332) (1,463,617) (2,485,948)
Additions to non-current
assets 3,653 42,246 45,899
2015-restated
Revenue from external customers 2,446,734 2,347,434 4,794,168
Depreciation, write offs
and amortisation (1,044,024) (122,384) (1,166,408)
Loss before taxation (1,548,300) (97,317) (1,645,617)
Taxation charge (1,100) (23,046) (24,146)
Profit on discontinued activities 262,431 - 262,431
Loss for the year (1,286,969) (120,363) (1,407,332)
Segmental assets 1,988,438 2,764,344 4,752,782
Segmental liabilities (3,178,018) (1,252,400) (4,430,418)
Additions to non-current
assets 17,120 - 17,120
Note that the Segmental liabilities figure for South East Asia
and the Middle East is shown as a net asset due to the treatment of
the amount due from Europe to South East Asia for funding being
shown as a liability in the former and an asset in the latter.
3. Earnings/(Loss) Per Share
The basic and diluted earnings/(loss) per share on continuing
activities was based on the loss attributable to shareholders of
GBP1,373,410 (2015-restated: loss of GBP1,787,857) and the weighted
average number of ordinary shares in issue during the year of
74,592,510 shares (2015: 63,051,043 shares).
The basic and diluted earnings/(loss) per share on discontinued
activities was based on the profit attributable to shareholders of
GBP573,800 (2015-restated: GBP262,431) and the weighted average
number of ordinary shares in issue during the year of 74,592,510
shares (2015: 63,051,043 shares).
There were no outstanding options in 2016.
4. Annual Report
The Annual Report will be sent to shareholders by close of
business on or around 6 June 2017. Additional copies will be
available to the public, free of charge, from the Company's website
www.malverninternational.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UNAWRBSANRRR
(END) Dow Jones Newswires
June 06, 2017 04:30 ET (08:30 GMT)
Malvern (LSE:MLVN)
Historical Stock Chart
From Apr 2024 to May 2024
Malvern (LSE:MLVN)
Historical Stock Chart
From May 2023 to May 2024