TIDMMLVN
RNS Number : 0575O
Malvern International PLC
29 September 2023
29 September 2023
Malvern International PLC
( " Malvern" the "Company")
Interim results for the six months ended 30 June 2023
Malvern International plc (AIM: MLVN), the global learning and
skills development partner, announces its interim results for the
six months ended 30 June 2023 ("H1 2023").
H1 2023 results
-- Revenues from operations increased 110% to GBP4.85m (H1 2022: GBP2.31m)
-- Operating profit (before depreciation, amortisation and
finance charges) of GBP0.58m (H1 2022: loss GBP0.34m).
-- Profit before tax from operating activities increased to
GBP0.22m (H1 2022: loss GBP0.68m), largely due to an increase in
strategic investment in the Company's sales structure and
significant recruitment travel to key feeder markets including
India and Nepal.
-- Profit per share from operating activities of 0.92p (H1 2022: loss 3.16p).
-- Cash at 30 June 2023 was GBP2.12m (FY 2022: GBP1.18m and H1
2022: GBP0.88m) and the Company's debt facility with BOOST&CO
remained at GBP2.6m.
Operating highlights
-- University Pathways student numbers increased by 247% in H1
2023 to 500 students (H1 2022: 144 students) studying in our
centres.
-- English Language Training ("ELT") centre revenues were 66% ahead of H1 2022.
-- Junior summer camps returned once again over the summer
months with a record number of camps and students. Payments in
advance for these camps account for the high level of cash held at
30 June 2023.
Commenting on the results and prospects, Richard Mace, Chief
Executive Officer, said:
"We are extremely pleased with our performance in H1 2023 which
has been driven by a combination of a strong return in the
international study market and our strategy to invest in our sales
and marketing function over the last three years. The momentum has
continued in the second half as we welcomed the new cohort of 450
University Pathways Students in September, and we experienced
record performances from our ELT and Junior Summer camps in July
and August.
We are also investing in highly experienced people in the
Pathways sector to continue to expand our reach, whilst improving
our systems of control and reporting. As a result of this
investment we are expecting break-even or a small loss for H2
2023.
Our forward bookings and revenue visibility in H2 2023 and for
the start of 2024 gives us confidence in Malvern's near and
longer-term prospects. We expect to see growth in all divisions in
2024."
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
For further information please contact:
Malvern International Plc www.malverninternational.com
Richard Mace - Chief Executive Via W H Ireland
Officer
NOMAD and Broker www.whirelandcb.com
WH Ireland Limited
Mike Coe / Sarah Mather +44 117 945 3470
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.
Juniors and summer camps - fully-immersive summer residential
English language camps and bespoke Company programmes for 13- to
18-year-old students.
For further investor information go to
www.malverninternational.com .
Chief Executive ' s review
Malvern has seen a significant improvement in revenues, student
numbers and business pipeline in H1 2023 and we are pleased to have
posted a small profit for the period.
The number of students studying in our University Pathways
programmes in H1 2023 (500) was significantly higher than H1 2022
(144), which included 461 at the University of East London (UEL)
International Study Centre. The performance in student recruitment
is driven by our expanded international sales team and our
expertise in managing and converting the student pipeline from
across the world. We continue to invest in staffing and operational
arrangements with a focus on learning, teaching and pastoral
excellence to maximise student attainment and progression. This
investment will increase once we have successfully concluded
negotiations for a contract longer than the one year that currently
exists.
During the period we ran joint marketing and recruitment trips
to India and Nepal with UEL. The response to these events was very
positive as we were able to showcase the quality of our offering to
this key audience.
English Language Training (" ELT ") centre revenues were 66%
ahead of H1 2022. The wider ELT market is still recovering from the
Covid-19 pandemic and is currently operating below 2019 levels.
Consequently, we are very pleased with our performance.
Junior Summer Camps returned this summer stronger than ever,
with five camps running during the June to August 2023 peak season.
Approximately 10% of revenues from our camps are recognised in H1
2023 period, with the remainder falling in the six months to 31
December 2023 (H2 2023).
We continued to strengthen our teams, with the addition of new
Heads of Marketing and Juniors. Emiliano Sallustri, the former Head
of Juniors was promoted to Commercial Director of ELT and Juniors
in January 2023.
Financial performance
Revenues from operations for H1 2023 more than doubled to
GBP4.85m (H1 2022: GBP2.31m). Revenue growth was driven by higher
student numbers in ELT and University Pathways, and to a lesser
extent Junior summer camps which are predominately recognised in
July and August (H2 2023).
Operating profit (before depreciation, amortisation and finance
charges) was GBP0.58m (H1 2022: loss GBP0.34m) with operating
profit margin at 12%. As with previous years, the operating profit
margin is typically higher in the first half of the year than in
the second half of the year due to the mix of revenues in each
respective period.
We are pleased to report a small profit before tax of GBP0.22m
(H1 2022: loss GBP0.68m), reflecting the improved trading
conditions. The profit per share from operating activities was 0.92
p (H1 2022: loss 3.16p).
We continue to maintain tight cost controls whilst making
strategic investments in increasing the depth of our teams, systems
and processes to support growth.
Cash balances at 30 June 2023 were GBP2.12m (31 December 2022:
GBP1.18m and 30 June 2022: GBP0.88m). The growth of our Juniors
division in 2023 has led to an improved cash position in Q2 2023
relative to the prior year. We are also receiving payment sooner
from our Juniors agents and managing the outgoings around this.
These improvements help to support the broader Group's working
capital requirements.
The Company's debt facility with BOOST&CO remained at
GBP2.6m at 30 June 2023.
Considering these factors, the Board believes the Company's
working capital position is sufficient to fund the ongoing
investments in the business.
Summary and outlook
We are pleased with our performance in H1 2023, as we have taken
advantage of improved market conditions following our investment in
the business over the last three years. UEL University Pathways
enrolments for September 2023 increased by 96% to c. 450 students
(September 2022: 230 students) around a third of this income will
be recognised in H2 2023, and two thirds in H1 2024. We expect this
momentum to continue and we are currently anticipating the number
of starters in January 2024 to be ahead of the 230 students who
started in January 2023.
The peak months of July and August for ELT were c. 20% higher
than in the same months in 2022, reflecting a return in confidence
in the market with more Middle East and North Africa ("MENA")
students travelling, supported by relaxed visa conditions for Saudi
Arabian students coming to the UK and large groups of Italian
students in our London centre.
We delivered five Junior Summer camps to c. 2,500 students in
July and August 2023 (2022: 976 students) - a record for the
Company - and we are already taking bookings for 2024.
Our significantly improved results are allowing us to invest in
experienced higher education personnel to drive future sales, to
build expanded sales and marketing teams together with associated
business development , develop our teaching staff and operational
delivery, and grow our agent network . T he Company views these
investments as essential to maximise current opportunities and to
build on the solid base we now have for 2024 and bey ond. The scale
of this key strategic programme means we are expecting break-even
or a small loss for H2 2023.
Richard Mace
Chief Executive Officer
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2023
Six Six
months ended months ended Year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
Note Unaudited Unaudited Audited
Revenue 4,851 2,308 6,512
Cost of services sold & operating expenses (4,193) (2,687) (7,013)
Cost of services sold & operating expenses -
Exceptional Item 4 (115) - -
-------------- -------------- -------------------
Total cost of services sold and operating expenses (4,308) (2,687) (7,013)
Depreciation & amortisation (179) (188) (372)
Other income 35 39 84
Operating profit / (loss) before finance costs 399 (528) (789)
Finance costs (177) (148) (295)
Profit/(Loss) before taxation 222 (676) (1,084)
Income tax charge 2 - -
-------------- -------------- -------------------
Profit/(Loss) after tax for the period / year 224 (676) (1,084)
-------------- -------------- -------------------
Profit/(Loss) attributable to equity holders 224 (676) (1,084)
Total comprehensive profit/(loss) for the period / year 224 (676) (1,084)
-------------- -------------- -------------------
Profit/(Loss) per share Pence Pence Pence
Basic 3 0.92 (3.16) (4.95)
Diluted 3 0.80 (2.75) (4.95)
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
As at
As at As at 31 December
30 June 2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non-current assets
Property, plant & equipment 28 39 31
Goodwill 1,419 1,419 1,419
Right-of-use assets 2,046 2,384 2,215
-------------- -------------- --------------
3,493 3,842 3,665
Current assets
Debtors 706 945 406
Prepayments 1,310 224 1,136
Cash at bank and in hand 2,119 881 1,182
-------------- -------------- --------------
4,135 2,050 2,724
Total Assets 7,628 5,892 6,389
-------------- -------------- --------------
Non-current liabilities
Term loan 1,623 2,583 2,053
Warrants 190 225 190
Deferred tax liability 10 10 10
Lease liabilities 2,307 2,891 2,625
-------------- -------------- --------------
4,130 5,709 4,878
Current liabilities
Trade payables 460 346 417
Contract liabilities 3,574 1,812 2,200
Other payables and accruals 1,400 852 1,641
Convertible loan notes - 227 -
Provision for income tax (2) 5 -
Lease liabilities 588 386 451
Term loan 888 11 436
-------------- -------------- --------------
6,908 3,639 5,145
Total Liabilities 11,038 9,348 10,023
-------------- -------------- --------------
Equity
Share capital 11,331 11,252 11,331
Share premium 6,798 6,619 6,798
Reserves (21,539) (21,327) (21,763)
-------------- -------------- --------------
(3,410) (3,456) (3,634)
-------------- -------------- --------------
Total Equity and Liabilities 7,628 5,892 6,389
-------------- -------------- --------------
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2023
Share Capital Share Premium Retained Convertible Total Reserves Attributable
Earnings Loan Reserve to Equity
Holders of the
Company
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------------- -------------- ---------------- ---------------- --------------- ---------------
Balance at 1
January 2022 11,217 6,604 (20,679) 29 (20,650) (2,829)
Total
comprehensive
income for the
period - - (676) - (676) (676)
-------------- -------------- ---------------- ---------------- --------------- ---------------
Balance at 30
June 2022 11,217 6,604 (21,355) 29 (21,326) (3,505)
-------------- -------------- ---------------- ---------------- --------------- ---------------
Direct costs
relating to
issue of
shares - (25) - - - (25)
New shares
issued 25 175 - - - 200
New shares from
share based
payments
including EMI
Options 4 - - - - 4
CLN Reserve
transferred to
Share Premium
Account - 29 - (29) (29) -
Convertible
Loan Notes 85 15 - - - 100
-------------- -------------- ---------------- ---------------- --------------- ---------------
Total
Comprehensive
income for the
period - - (408) - (408) (408)
-------------- -------------- ---------------- ---------------- --------------- ---------------
Balance at 31
December 2022
/ 1 January
2023 11,331 6,798 (21,763) - (21,763) (3,634)
-------------- -------------- ---------------- ---------------- --------------- ---------------
Total
comprehensive
income for the
period - - 224 - 224 224
-------------- -------------- ---------------- ---------------- --------------- ---------------
Balance at 30
June 2023 11,331 6,798 (21,539) - (21,539) (3,410)
-------------- -------------- ---------------- ---------------- --------------- ---------------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Six Six
months ended months ended Year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash flows from operating activities
Profit/(Loss) after tax 224 (676) (1,084)
Adjustments for:
Depreciation of tangible assets 179 188 372
Fair value movements - - (40)
Share based payments - - 4
Loss on disposal of tangible assets - - 1
Impairment of trade receivables 54 132 114
Finance cost 177 148 295
Interest paid - (13) (41)
Tax paid - (16) -
-------------- -------------- -------------------
634 (237) (379)
Changes in working capital
Decrease / (increase) in debtors & prepayments (529) (307) (659)
Increase / (decrease) in creditors 1,108 1,118 2,171
-------------- -------------- -------------------
Net cash generated from operating activities 1,213 574 1,133
-------------- -------------- -------------------
Cash flows from investing activities
Purchase of property, plant and equipment (7) (8) (15)
-------------- -------------- -------------------
Net cash used in investing activities (7) (8) (15)
-------------- -------------- -------------------
Cash flows from financing activities
Decrease in finance lease liabilities (269) (176) (473)
New share issue - - 176
Term loan - Net - 114 (15)
-------------- -------------- -------------------
Net cash used in financing activities (269) (62) (312)
-------------- -------------- -------------------
Net increase in cash and cash equivalents 937 504 805
Cash and cash equivalents at beginning of period / year 1,182 377 377
-------------- -------------- -------------------
Cash and cash equivalents at end of period / year 2,119 881 1,182
-------------- -------------- -------------------
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION FOR THE SIX
MONTHS ENDED 30 JUNE 2023
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 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT
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 Company 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 Group's unaudited interim results for the 6 months ended 30
June 2023 ("Interim Results") are prepared in accordance with the
Group's accounting policies which are based on the recognition and
measurement principles of the UK-adopted International Accounting
Standards in conformity with the requirements of the Companies Act
2006. As permitted, the Interim Results have been prepared in
accordance with the AIM rules and not in accordance with IAS 34
"Interim financial reporting" and therefore the interim information
is not in full compliance with International Accounting
Standards.
The interim condensed consolidated financial statements are
prepared under the historical cost convention as modified to
include the revaluation of certain financial instruments. The
accounting policies adopted in the preparation of the interim
condensed consolidated financial statements are consistent with
those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 31 December
2022. The principal accounting policies of the Group have remained
unchanged from those set out in the Group's 2022 annual report and
financial statements. The Principal Risks and Uncertainties of the
Group are also set out in the Group's 2022 annual report and
financial statements and are unchanged in the period.
The financial information for the 6 months ended 30 June 2023
and 30 June 2022 has not been audited and does not constitute full
financial statements within the meaning of Section 434 of the
Companies Act 2006.
The Group's 2022 financial statements for the year ended 31
December 2022 were prepared under UK-adopted International
Accounting Standards. The auditor's report on these financial
statements was unqualified and did not contain statements under
Sections 498(2) or (3) of the Companies Act 2006 and they have been
filed with the Registrar of Companies. However, the auditor's
report did draw attention to a material uncertainty in relation to
going concern.
3. Profit/(Loss) per share
The basic profit/(loss) per share is calculated by dividing the
profit/(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 24,442,400 (H1 2022: 21,382,000).
The diluted profit/(loss) per share is calculated by dividing
the profit/(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 (24,442,400 units) as at 30 June 2023,
diluted for the effect of share options (1,965,000 units) and
warrants (1,725,113 units) in existence during the period was
28,132,513 (H1 2022: 24,567,112). The weighted average number of
shares in issue for H1 2022 was restated from 2,138,199,951 to
21,382,000 for effect of the share combination that took place in
November 2022.
4. Exceptional Item
The separate reporting of exceptional items helps to provide an
indication of the Group's underlying business performance.
In H1 2023, the Group is reporting a charge (GBP0.11m) related
to revenue from the prior year. This is due to the late reporting
of actual course attendance by a major customer. We are currently
engaging with them over establishing better reporting systems from
them to enable more prompt accounting for sales credits when
required.
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END
IR FLFSEALITFIV
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