Significant improvement in student numbers and revenues
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 2023 (“H1”) ahead of its interim results to be announced in September 2023.
Revenues more than doubled to c.£4.8m in H1 2023 compared to £2.3m in H1 2022. The Group is expected to announce a return to profit for the first half of the year (H1 2022: Loss £0.7m). This is the result of strong University Pathways student intakes in September 2022 and January 2023 as well as a 40% increase in English language teaching (“ELT”) revenues in H1 2023 compared to H1 2022.
Forward bookings and outlook
Momentum has continued into H2 2023 with the number of students starting courses for September expected to be materially ahead of the previous year. Approximately 440 new students will be joining the International Study Centre at The University of East London (“UEL”) compared to 230 in September 2022 and 46 starters in September 2021. Around one third of this income will be recognised in H2 2023, with the remainder recognised in H1 2024.
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.
In order to continue to expand our University Partnerships division, underpinned by enhanced systems of control and reporting, the Company has invested in support from highly experienced consultants in this sector.
The UEL International Study Centre contract has automatically extended for the 2023/24 academic year, as anticipated, whilst we continue negotiations regarding the intended longer term extension to our contract.
Our NCUK centre is expected to run with a cohort of around ten students in September 2023 with a bigger cohort joining in January 2024. These numbers remain low but the Board expects to build on them as the Group develops a brand presence in the key regions of China, Nigeria and South East Asia.
English language teaching (“ELT”)
Our peak months in July and August are currently c.20% higher than in the same months in 2022, reflecting a return in confidence in the market as a result of more Middle East and North Africa (“MENA”) students travelling, supported by relaxed visa conditions for Saudi Arabian students coming to the UK with the introduction of the electronic visa waiver from 1 June 2022.
As expected the Italian government funded programmes went ahead this summer. We also welcomed a much wider nationality mix with groups from MENA, Commonwealth of Independent States (“CIS”) and Latin America (“LATAM”) regions and Taiwan. The Company delivered programmes to over 2,000 students in July and August 2023 (2022: 976), generating revenues of c.£3.7m (2022: c.£1.4m). This income will be recognised in H2.
The Board feels that this is a very good result and, together with a large increase in the number of agents, the Group has a solid base on which to keep building for 2024 and beyond.
Loan facility and working capital
As at 30 June 2023, the Company’s debt facility with BOOST&CO remained at £2.6m and cash balances were £2.1m, which includes payments on account for Juniors. The Board believes the Group’s working capital position is more than sufficient to fund ongoing investments in the business.