TIDMMLVN
RNS Number : 8024J
Malvern International PLC
26 August 2021
26 August 2021
Malvern International PLC
("Malvern", the "Group" or the "Company" )
Interim results for the six months ended 30 June 2021
Malvern International plc (AIM: MLVN), the global learning and
skills development partner, announces its interim results for the
six months ended 30 June 2021 ("H1").
Results
-- H1 revenues from continuing operations of GBP1.42m (H1 2020: GBP1.37m).
-- H1 operating profit (before depreciation, amortisation and
finance charges) of GBP9k (H1 2020: loss GBP53k)
-- H1 loss before tax on continuing operations was GBP0.35m (H1 2020: loss GBP0.44m).
-- Loss per share on continuing activities of 0.02p (H1 2020: loss 0.16p).
-- GBP1.70m gross raised (GBP1.60m net of expenses) by way of placing and subscription.
-- Cash as at 30 June 2021 was GBP1.28m (31 December 2020: GBP0.10m and 30 June 2020: GBP0.06m).
*In August 2020, the Group announced the closure of Singapore
operations. The Singapore company was formally placed in
liquidation in April 2021, this is reported in the current and
prior periods as a discontinued operation. Financial information
relating to the discontinued operation for the period to the date
of the closure is set out in note 7 of the interim statements.
Operating highlights and outlook
-- English Language Training ("ELT") schools are currently
operating at approximately 20% of pre-pandemic levels, in line with
management expectations.
-- Provisional bookings for ELT are encouraging, demonstrating
the pent-up demand in this area, however many student start dates
remain subject to easing of travel restrictions.
-- University Pathways deposits for 2021/22 academic year are
currently ahead of the previous year. However, with the current
restrictions in place for international travel, there has been a
significant level of deferrals to a January 2022 start .
-- The Group's NCUK offering was launched in H1 2021. Student
applications are currently being processed for September 2021 term
start and we have received the first deposits. The sales and
marketing teams are focused on building the brand and reputation of
this area of the business.
-- The Group received a significant number of bookings for the
2021 summer camps prior to being put on hold, which points to a
strong demand for our product. Our expectation is that this demand
will return for summer 2022 as the border restrictions are
relaxed.
-- It has been announced that the Hungarian Government's
Language Learning Scholarship Programme for Hungarian Students,
Tempus Public Foundation will open again for summer 2022. We can
expect to accept bookings for summer 2022 from December 2021.
Commenting on the results and prospects, Richard Mace, Chief
Executive Officer, said:
" We have continued to provide tuition to students throughout
the period through face-to-face, online and blended learning. While
the pandemic has continued to disrupt bookings and the timing of
start dates, we are pleased that we have managed to keep our ELT
schools open and that provisional bookings for both ELT and
University Pathways are rebuilding. There is a clear back-log of
demand for all our education services and we expect a robust return
once restrictions are eased and in-class teaching can resume. In
the meantime we continue to strengthen our sales and marketing
teams and ensure the quality of our education services remains
high."
This announcement contains information which, prior to its
disclosure by this announcement, was inside information for the
purposes of the Market Abuse Regulation
For further information please contact:
Malvern International Plc www.malverninternational.com
Richard Mace - Chief Executive Via Communications Portfolio
Officer
NOMAD and Broker www.whirelandcb.com
WH Ireland Limited
Mike Coe / Sarah Mather +44 20 7220 1666
Media enquiries
Communications Portfolio ariane.comstive@communications-portfolio.co.uk
Ariane Comstive +44 7785 922 354
Notes to Editors:
Malvern International is a learning and language skills
development partner, offering international students essential
academic and English language skills, cultural experiences and the
support they need to thrive in their academic studies, daily life
and career development.
University Pathways - on and off-campus university pathway
programmes helping students progress to a range of universities, as
well as in-sessional and pre-sessional courses.
Malvern House Schools - British Council accredited English
Language Training at English UK registered schools in London,
Brighton and Manchester.
Malvern Online Academy - British Council accredited online
school, offering supported tuition to students from around the
world in English language, higher education, and professional
education.
Juniors and summer camps - fully-immersive summer residential
English language camps and bespoke group programmes for 13 to 18
year old students.
For further investor information go to
www.malverninternational.com .
Chief Executive's review
Trading in the six months ended 30 June 2021 ("H1") has been
significantly impacted by the effects of the Covid pandemic.
Nevertheless the Group has made good progress in the period.
Trading during the period for English Language Training ("ELT") and
University Pathways students was at its highest since the outbreak
of the pandemic in the UK in March 2020. ELT schools are currently
running at approximately 20% of pre-pandemic levels and student
numbers are expected to continue to rise, while University Pathways
delivered courses to 170 students during the 2021/22 academic
year.
During this time, Malvern Online Academy has provided tuition
both to students signed up to in-class courses in the form of
blended and remote learning, as well as providing full online
education.
Revenues from continuing operations for H1 were GBP1.42m (H1
2020: GBP1.37m). The loss before tax was GBP0.35m (H1 2020: loss
GBP0.44m). The loss per share on continuing activities was 0.02p
(H1 2020: loss 0.16p).
The Group has continued to implement strong cost control
measures throughout the period. In April, the Group raised GBP1.60m
after expenses by way of placing and subscription to support the
business through the prolonged period of difficult trading and to
build on the significant progress that has been made in many areas
of the business. Cash balances as at 30 June 2021 were GBP 1.28m
(31 December 20 20 : GBP 0.10 m and 30 June 2019: GBP0.43m).
Current trading
Language schools
There continues to be a significant backlog of demand for our
educational products. This is reflected in the growing number of
provisional bookings, which are subject to travel restrictions
being eased, for ELT in our London, Brighton and Manchester
schools. In light of this, the timing of individual start dates
remains dependent on each nation's approach to allowing
international travel to resume.
Malvern's schools continue to run at approximately 20% of
pre-pandemic levels which is in line with management expectations.
Forward bookings particularly from the Middle East are encouraging.
Middle East embassy bookings for Q4 are looking promising and
should continue to build as travel restrictions are eased. A number
of students quarantining in the UK, or yet to arrive, have elected
to commence their language course online. In light of Covid, the UK
government has extended concessions around student visa rules until
April 2022, which allow online studies to qualify for post-study
work rights.
Pathways
The demand for University Pathways courses is ahead of the
previous year, as reflected by the deposits taken by our university
partners for the September intake of the 2021/22 academic year.
However the delays in the easing of travel restrictions,
highlighted in our AGM update, and adjustments to admission
procedure timetables, have together resulted in a significant level
of start date deferrals to January 2022. As a result, September
2021 student numbers will be below last year but the number of the
students for the academic year as a whole is expected to be at a
higher level than 2020/21. We are partnering with UEL to refine the
admission process to assist in maximising acceptance numbers of
qualifying students for future cohorts.
The Group's first cohort of NCUK students are due to start in
the last week of September. Recruitment for this programme is on
budget. Our intention is to build our brand and reputation to grow
this area of the business. To support our NCUK offering we have
recruited an academic manager to ensure the quality of delivery of
courses. We are confident with the team we have in place for the
NCUK foundation programme that we have the platform for growth in
2022 and beyond.
Juniors
Due to anticipated international border issues we did not budget
for any summer camps in 2021. Not unexpectedly these have not gone
ahead. Pleasingly, before our plans for these camps were put on
hold, we had received a significant number of bookings pointing to
strong demand for our product. Our expectation is that this demand
will return for summer 2022 as border restrictions are relaxed. It
has been announced that the Hungarian Government's Language
Learning Scholarship Programme for Hungarian Students, Tempus
Public Foundation will open again for summer 2022. We can expect to
accept bookings for summer 2022 from December 2021. In 2019 we
received provisional bookings of approximately GBP1.5m for this
programme.
China
As part of our recruitment strategy we have appointed our first
sales manager in China, in Chengdu, with a second sales manager
post to be in place in Q4 2021. Our Chinese website is being
developed and will be ready for the next student recruitment
campaign in late 2021 / early 2022. China is the biggest
international student market to the UK for Higher Education
provision and junior summer camps.
Outlook
There is a clear back-log of demand for all our education
services and we expect a robust return once restrictions are eased
and in-class teaching can resume. Clearly a degree of uncertainty
over the gradual opening of international travel remains, but in
the meantime we are providing online and blended tuition where it
is required. Our high quality team continue to build relationships
with universities, agents, embassies and within countries
worldwide.
Our fundraising in April 2021, along with strong cost-control
measures has allowed us to weather the disruption caused by Covid
to date, to strengthen our sales and marketing teams and contribute
to other planned growth initiatives such that as restrictions ease
we expect the number of students across the Group to grow
substantially.
Richard Mace
Chief Executive Officer
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2021
Six Six
months ended months ended Year ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Note Unaudited Unaudited Audited
Revenue 1,424 1,366 1,901
Cost of services sold & operating
expenses (1,573) (1,612) (3,232)
Other Income 158 193 418
Operating profit / (loss) 9 (53) (913)
Finance costs (147) (178) (302)
Depreciation & amortisation (207) (204) (414)
Loss before taxation (345) (435) (1,629)
Income tax charge - - (31)
-------------- -------------- -------------
Loss for the period / year
from continuing operations
(1) (345) (435) (1,660)
Discontinued operations (1) 7 (21) 252 (480)
-------------- -------------- -------------
Loss for the period / year (366) (183) (2,140)
-------------- -------------- -------------
Loss attributable to equity
holders (366) (183) (2,140)
Loss for the period / year (366) (183) (2,140)
Translation movement (5) (272) 16
-------------- -------------- -------------
Total comprehensive loss for
the period / year (371) (455) (2,124)
-------------- -------------- -------------
Continuing operations (345) (435) (1,660)
Discontinued operations (26) (20) (464)
-------------- -------------- -------------
Total loss attributed to equity
holders (371) (455) (2,124)
-------------- -------------- -------------
Loss per share on continuing
activities Pence Pence Pence
Basic (2) 4 (0.02) (0.16) (0.23)
Diluted (2) 4 (0.02) (0.16) (0.23)
(1) The closure of the Singapore school was completed in August
2020 and all operations in the territory have now ceased (liquidation
commenced in April 2021). In line with the 2020 annual financial
accounts, the Group continues to present the Singapore operations
as discontinued.
(2) Calculated at the weighted average number of shares in issue
during the period at 1,648,655,085 (H1 2020: 263,776,243).
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
As at
As at As at 31 December
30 June 2021 30 June 2020 2020
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non-current assets
Property, plant & equipment 66 104 81
Goodwill 1,419 1,419 1,419
Right-of-use assets 2,426 2,800 2,613
3,911 4,323 4,113
Current assets
Inventory - - -
Debtors 542 1,413 1,033
Prepayments 133 289 162
Cash at bank and in hand 1,276 63 104
-------------- -------------- -------------
1,951 1,765 1,299
Assets classified for disposal 10 - 2
-------------- -------------- -------------
Total Assets 5,872 6,088 5,414
-------------- -------------- -------------
Non-current liabilities
Term loan 2,547 2,515 2,532
Warrants 64 68 64
Convertible loan notes 224 - 273
Lease liabilities 2,313 2,668 2,491
-------------- -------------- -------------
5,148 5,251 5,360
Current liabilities
Trade payables 408 457 604
Contract liabilities 221 269 676
Other payables and accruals 1,221 891 1,230
Amount due to related parties - - 40
Convertible loan notes 100 322 50
Provision for income tax 10 10 10
Lease Liabilities 354 344 351
Term Loan 19 - -
-------------- -------------- -------------
2,333 2,293 2,961
Liabilities directly associated
with assets classified
for disposal 211 - 218
-------------- -------------- -------------
Total Liabilities 7,692 7,544 8,537
-------------- -------------- -------------
Equity
Share capital 11,193 10,310 10,310
Share premium 6,575 5,782 5,782
Reserves (19,588) (17,548) (19,217)
-------------- -------------- -------------
(1,820) (1,456) (3,125)
Total Equity and Liabilities 5,872 6,088 5,414
-------------- -------------- -------------
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2021
Share Share Retained Translation Capital Convertible Total Attributable
Capital Premium Earnings Reserve Reserve Loan Reserves to Equity
Reserve Holders of
the Company
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ---------- ----------- ---------- ------------ --------- ------------ ---------- -------------
Balance at 1
January
2020 9,364 5,431 (17,564) 272 171 28 (17,093) (2,298)
Total
comprehensive
income for
the
period - - (183) (272) - - (455) (455)
New share
issue 946 351 - - - - - 1,297
---------- ----------- ---------- ------------ --------- ------------ ---------- -------------
Balance at 30
June
2020 10,310 5,782 (17,747) - 171 28 (17,548) (1,456)
---------- ----------- ---------- ------------ --------- ------------ ---------- -------------
Total
comprehensive
income for
the
period - - (1,957) 288 - - (1,669) (1,669)
Direct costs - - - - - - - -
relating
to issue of
shares
---------- ----------- ---------- ------------ --------- ------------ ---------- -------------
Balance at 31
December
2020 / 1
January
2021 10,310 5,782 (19,704) 288 171 28 (19,217) (3,125)
---------- ----------- ---------- ------------ --------- ------------ ---------- -------------
Total
comprehensive
income for
the
period - - (366) (5) - - (371) (371)
Direct costs
relating
to issue of
shares - (90) - - - - - (90)
New share
issue 883 883 - - - - - 1,766
---------- ----------- ---------- ------------ --------- ------------ ---------- -------------
Balance at 30
June
2021 11,193 6,575 (20,070) 283 171 28 (19,588) (1,820)
---------- ----------- ---------- ------------ --------- ------------ ---------- -------------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2021
Six Six
months ended months ended Year ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash flows from operating activities
(Loss) / profit after tax from
Continuing activities (345) (435) (1,660)
Discontinued activities (21) 252 (480)
Adjustments for:
Depreciation & amortisation 207 204 414
Fair value movement on warrants - (57) (62)
Fair value movement on convertible loan
reserve - 6 -
Share based payments - - 175
Loss on disposal of discontinued operations (20) (398) -
Loss on disposal of tangible assets - - (115)
Impairment of trade receivables - - 124
Finance cost 147 178 302
Interest paid (54) (49) (51)
Tax paid - - -
-------------- -------------- -------------
(86) (299) (1,353)
Changes in working capital
Decrease in debtors & prepayments 520 278 95
Increase / (decrease) in creditors (848) 101 219
Decrease in inventories - 2 6
Decrease in related parties (40) (43) (7)
-------------- -------------- -------------
Net cash used in operating activities (454) 39 (1,040)
-------------- -------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment (5) - -
Investment in Intangible Assets - - -
Net cash used in investing activities (5) - -
-------------- -------------- -------------
Cash flows from financing activities
Decrease in finance lease liabilities (18) (259) (195)
New share issue 1,651 100 1,156
Term loan (2) 100 100
-------------- -------------- -------------
Net cash used in financing activities 1,631 (59) 1,061
-------------- -------------- -------------
Net increase in cash and cash equivalents 1,172 (20) 21
Effect of foreign exchange rate changes
on consolidation - - -
Cash and cash equivalents at beginning
of period / year 104 83 83
-------------- -------------- -------------
Cash and cash equivalents at end of
period / year 1,276 63 104
-------------- -------------- -------------
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION FOR THE SIX
MONTHSED 30 JUNE 2021
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 100 Avebury Boulevard, Milton Keynes, MK9 1FH and its
principal place of business is in the UK. 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. There have
been no significant changes in the nature of these activities
during the period
2. Significant accounting policies
Basis of preparation
The accounting policies adopted are consistent with those of the
previous financial year.
This interim consolidated financial information for the six
months ended 30 June 2021 has been prepared in accordance with IAS
34, 'Interim financial reporting'. This interim consolidated
financial information is unaudited and is not the Group's statutory
financial statements and should be read in conjunction with the
annual financial statements for the year ended 31 December 2020,
which have been prepared in accordance with International Financial
Reporting Standards (IFRS) and have been delivered to the Registrar
of Companies. The auditors have reported on those accounts; their
report was unqualified, but did include, without qualifying their
report, references to which the auditors drew attention by way of
emphasis of matter in respect of the preparation of the financial
statements on a going concern basis.
The interim consolidated financial information for the six
months ended 30 June 2021 is unaudited. In the opinion of the
Directors, the interim consolidated financial information presents
fairly the financial position, and results from operations and cash
flows for the period. Comparative numbers for the six months ended
30 June 2020 are unaudited.
This interim consolidated financial information is presented in
GBP sterling, rounded to the nearest thousand.
3. Dividend
No interim dividend for this financial year is proposed.
4. Loss per share
The basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the relevant period. The
weighted average number of shares in issue during the period was
1,648,655,085 (H1 2020: 263,776,243).
The diluted loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the relevant period
diluted for the effect of share options and warrants in existence
at the relevant period. The weighted average number of shares in
issue diluted for the effect of share options and warrants in
existence during the period was 1,648,655,085 (H1 2020:
263,776,243).
5. Share capital
On 1 April 2021 the Group announced the issue of 620,150,000 new
ordinary shares through placing and a subscription to the Company
of 230,000,000 new ordinary shares at a price of 0.20 pence per
share to raise net proceeds of GBP1.60m. As at 30 June 2021, the
total number of Ordinary Shares held in the Company was
2,087,467,240 (30 June 2020: 1,204,967,240).
6. Subsequent events
In August 2021, the Company announced that it had allotted
21,551,724 new ordinary shares of 0.1p each pursuant to the
conversion of GBP50,000 of the loan notes at a conversion price of
0.232 pence per share (being the average price of the five business
days prior to the conversion date) that were otherwise redeemable
on 31 July 2021. Following the loan note conversion, a further
GBP272,817 Loan Notes remain outstanding of which a further
GBP50,000 is redeemable or convertible on each of 31 January 2022
and 31 July 2022 with the final balance redeemable or convertible
on 31 December 2022.
7. Discontinued operations
The financial details related to Singapore operations are for
the half year ended 30 June 2021. Following the decision to close
the Singapore operations in August 2020, the company was formally
placed in liquidation in April 2021.
i) Financial performance of discontinued operations
Six months ended Six months
30 June 2021 ended 30 June
GBP'000 2020
GBP'000
Revenue - 629
Other income 5 104
Expenses (26) (1,051)
---------------------- ---------------
Loss for the period (21) (318)
---------------------- ---------------
Other comprehensive income - 570
---------------------- ---------------
Total Comprehensive income (21) 252
---------------------- ---------------
ii) Assets and liabilities of entities classified for
disposal
Six months ended Six months
30 June 2021 ended 30 June
GBP'000 2020
GBP'000
Asset classified for disposal - -
Property plant and Equipment - 2,027
Other receivables - 312
Cash & cash equivalent 10 6
----------------- ---------------
Total assets classified for disposal 10 2,345
----------------- ---------------
Liabilities directly associated with assets - -
classified for disposal
Trade creditors (145) (699)
Other payables (66) -
Lease liability - (1,929)
----------------- ---------------
Total liabilities (211) (2,628)
----------------- ---------------
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END
IR FLFLRTIIEFIL
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