Capitalising on strategic investment as sector recovers
Malvern International plc (AIM: MLVN), the global learning and skills development partner, is pleased to provide a trading update for the six months ended 30 June 2022 (“H1”), ahead of announcing its interim results in the first half of September 2022.
Malvern has seen a significant improvement in student numbers and business pipeline in H1 with revenues around 60% ahead of H1 2021.
The Company is seeing the benefits of its strategic investment over the last two years in its brand, sales and marketing, management team, processes, partnerships, products and student offering. The Board believes Malvern is in a strong position to grow its market share for the remainder of 2022 and beyond. Pre-booked and delivered revenues for H2 2022 are showing a three-fold increase on H2 2021 and are ahead of like-for-like pre-pandemic levels of H2 2019. Pre-bookings indicate that the Group can expect further growth in revenues in 2023.
Management continue to maintain strong cost controls as the Group recovers from the COVID-19 period and continues to have the option of BOOST&CO’s (“BOOST”) support for its working capital requirements as required.
University Pathways has seen a significant increase in student numbers for September 2022 and recruitment for January 2023 is also looking strong. Around 230 new starters are joining our International Study Centre at The University of East London (“UEL”) in September 2022, a significant increase on the 46 new starters in September 2021. Approximately one third of this income will be recognised this year and the remaining two thirds will be recognised in H1 2023.
The increase is the result of the expansion of the international sales team, improved processes to manage and convert the student recruitment pipeline, and significant recruitment travel to key feeder markets including joint marketing trips to India and Nepal with UEL.
These markets are expected to grow further and, following the recent reintroduction of priority and super priority visas in India, the Group is currently projecting to have over double the number of pathway students studying in our International Study Centres in 2022/23 compared to the previous academic year.
Our NCUK centre is expected to run with a cohort of around fifteen students in September 2022 with more joining in January 2023. The Board expect these numbers to build as the Group develops a brand presence in the key regions of China, Nigeria and South East Asia.
English language teaching (“ELT”)
The ELT industry has bounced back after international borders reopened following two years of travel restrictions. This is evidenced through revenues across the Group’s three ELT centres during the Company’s busiest summer period, coming in slightly ahead of the pre-pandemic level in 2019.
The MENA market was the first big market to return. This was helped by the Government’s announcement in early May 2022 that Saudi Arabia and Bahrain nationals can apply to travel to the UK for tourism, business, study or medical treatment for up to six months with an electronic visa waiver from 1 June 2022. The initiative has made it easier for visitors from the Gulf to enter the UK and is intended to deepen the UK’s partnership with these countries, enhance diplomatic ties and economic prosperity.
Looking forward, the Board is confident for the outlook for ELT in 2023 and beyond. Malvern is currently working with the biggest agencies in Brazil, Saudi Arabia, Kuwait and Italy, and the pipeline of bookings is strong. The focus for the remainder of 2022 is to capitalise on the Group’s momentum, to continue to foster good relations and build Malvern’s agent network across other key regions.
As expected the Italian funded INPS programmes went ahead in July and August 2022. The Company delivered programmes to 976 students, generating revenues of c.£1.35m after two years of no activity.
The team had a successful British Council inspection in July 2022. The feedback so far has been excellent with the formal report due in September 2022. The next full inspection is due in 2026.
The Board feels that this is a great result and together with a large increase in the number of agents working on behalf of the Group, giving it a solid base to build on for 2023 and beyond.