Malvern International plc (“Malvern” or the “Company”), the global learning and skills development partner, is today issuing an update in respect of current trading and its year ended 31 December 2021 (“FY21”).
While the longer term industry fundamentals remain strong, unsurprisingly the dynamic situation around international travel throughout last year continued to affect the Company’s performance into the second half of 2021.
Revenues in the second half were as expected lower than the first half and costs were higher as we chose to invest and further strengthen our sales and marketing capability, with two sales staff recruited in China and the development of our Mandarin website hosted in China. China is the biggest student recruitment market to the UK for Higher Education and English Language Teaching (“ELT”). Investment in this region fits with our strategic goals.
As a result of these factors, the preliminary unaudited assessment of the Group’s trading for the full year indicates revenues of circa £2.4 million (FY20 £1.9 million) and a loss for the year of circa £1 million (FY20 £1.33 million). Unaudited Net debt as at 31 December was £5.8 million. The Company is delighted to announce separately this morning the successful renegotiation of its existing debt facility.
The number of ELT students across our sites in Manchester, London and Brighton grew back to approximately 80% of 2019 levels in Q4 2021. With fewer international students in 2021, we grew the proportion of UK-based students through a concerted sales and marketing effort, including upgrading our website; we will continue to leverage this audience. Malvern Online Academy (“MOA”) is supporting students with supplementary and hybrid learning where required.
In December 2021, all our schools were approved by the Kuwait Cultural Office (“KCO”), adding to the long-term partnership formed between our Manchester school and the KCO. As a result, Kuwaiti sponsored students can be accepted in London, Brighton, Manchester and on our London NCUK programme. The KCO, funded mainly through the Kuwait Ministry of Education, supports on average 8,000 students per year across the UK. The language students typically study for 36 weeks, and have provided our Manchester centre with a consistent number of students and recurring income stream over the last six years. With these approvals, we are looking to double the number of KCO-sponsored students we recruit across the Group to around 50 in the current year.
Current trading and outlook
There remains a clear back-log of demand for all our education services as demonstrated by an uptick in ELT student numbers in the first quarter of 2022, compared to the previous quarter. We currently have 144 students enrolled in University Pathways courses. Of these, 16 students are part of our first ever NCUK cohort and we are looking to build on this for the next academic year. Despite the traffic light system on international travel extending into the autumn of 2021 which coincided with application deadlines for key geographies, we still managed to enrol good student numbers. Our overall January pathway intake was 80 students compared with 43 last year.
Our pipeline of bookings for our ELT centres in London and Manchester are the strongest since the start of the pandemic and our expectation is to return to 2019 levels, exceeding this where possible, with Brighton enjoying a successful full first year of operations. Our biggest agents in the MENA region have indicated they expect students to return in larger numbers after Ramadan, late May. Therefore we are anticipating an influx of bookings from mid-April.
Provisional bookings for juniors are up significantly as we expect the Italian government funded INPS programmes to go ahead in summer of 2022. We see the foundations being laid in 2022 for this to be a major part of the business going forward. The Tempus Hungarian scheme has been delayed to 2023.
As part of our recruitment strategy we have continued to build our sales and marketing capability. In China – the biggest international student market to the UK for Higher Education and Junior summer camps – we have appointed two Regional Sales Managers based in Chengdu and Beijing and launched a Chinese website. In addition we have appointed a Sales Manager based in Indonesia and a Regional Director for MENA and Turkey. We are also in late stages of appointing an International recruitment advisor in India and one in Nepal. Both are growth markets for Higher Education student recruitment. We are expecting the new recruits to drive the growth of a global partner network and in turn our student numbers across Pathways and ELT adult and junior programmes.
Richard Mace, Chief Executive Officer, said: “January student numbers and the Government announcement to remove testing for fully vaccinated arrivals into the UK, provides us with confidence that student numbers will return to pre-pandemic levels this year. Our efforts to build our sales and marketing capabilities into key territories, as well as strengthening existing partnerships with embassies and key clients whilst maintaining tight control of costs, will help support the growth of student numbers across all our programmes. Malvern Juniors will return in the summer of 2022 with four centres currently running.”
“The UK international student market has continued to consolidate with fewer providers today than two years ago due to M&A activity and closures. As a business, we are well positioned to take advantage of the expected growth in overseas student numbers over the coming years.”
“These factors, combined with the separate announcement made today regarding the successful restructure of our debt facility with BOOST&CO. which releases valuable financial resources to pursue our objectives this year, makes us extremely well placed to build the business in 2022 and beyond.”