Half-year Report

Malvern International plc (AIM: MLVN), the global learning and skills development partner, is pleased to announce its interim results for the six months ended 30 June 2019.

Financial highlights

  • Revenues increased 28% to £3.33m (2018: £2.61m) slightly ahead of management expectations.
  • Adjusted EBITDA was £0.38m (H1 2018: loss of £0.22m) excluding one-off integration and restructure costs of £0.08m¹. If IFRS 16 had not been implemented, the adjusted EBITDA for H1 2019 would have been break even.
  • Impairment of £1.07m applied to the intangible assets of the Malaysia operation, reflecting the continued difficult trading conditions.
  • Loss before tax £1.46m² (H1 2018: loss of £0.37m).
  • Loss per share³ on continuing activities of 0.60p (H1 2018: 0.29p).
  • Placing completed in February 2019 raising £606,000 before expenses.
  • Cash as at 30 June 2019 was £0.43m (H1 2018: £3.11m, H2 2018: £0.11m).
  • Strong second half expected in UK and Singapore due to natural seasonality of the business; as at 30 June 2019 booked forward revenues for H2 stood at £4.10m (as at 30 June 2018: £3.10m).

¹ One-off integration and restructure costs of £0.08m relate to Singapore and Malaysia respectively.

² Including impairment from Malaysia of £1.07m.

³ Calculated using weighted average number of shares in issue during the period 256,459,444 (H1 2018: 125,763,888).

Operational highlights

  • The UK has continued to show an improved performance delivering an operating profit of £0.60m (H1 2018: £0.09m) on revenues of £2.03m (H1 2018: £1.08m).
  • Performance in South East Asia was mixed resulting in an operating loss of £0.30m on revenues of £1.30m. Trading in Singapore remained consistent for the period as compared to last year whilst Malaysia continued to perform below expectations.
  • Pursued our strategy to diversify our offering and establish new partnerships, including:
    • taking full operational control of a former joint venture to develop further Malvern Juniors, which runs summer camps, for a nine year period.

    • growing forward bookings in our first year working with University of East London, with approximately £0.50 million of sales due to fall in H2;

    • forming a partnership with Wrexham Glendwr University, Wales, to deliver International Foundation Year and pre-sessional English courses;  

    • opening a new English language site in Brighton, expanding the chain of our language schools in the UK;

    • offering new courses in Singapore and securing larger contracts with leading accounting firms; and

    • increasing cross-selling opportunities between UK and South East Asia.

Post period highlights

  • Secured a loan agreement with Boost & Co Ltd with £2.60m drawn on 27 August 2019 to repay a shareholder loan and provide additional working capital.  An option to draw down up to a further £4.00m, subject to certain conditions, is available to fund a permitted acquisition;
  • the Board has made the decision to seek a buyer for the Malaysian operation; and
  • strengthened the Board with the appointment of Mark Elliott as a Non-Executive Director in July 2019.