REG - Malvern Inter. PLC - Final Results
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RNS Number : 1472I Malvern International PLC 12 May 2025
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
12 May 2025
Malvern International plc
("Malvern", the "Company" or the "Group")
Final results for the year ended 31 December 2024
Malvern International plc (AIM: MLVN), the global learning and skills
development partner, announces its final results for the year ended 31
December 2024.
Financial highlights
· Underlying revenue, excluding agent commission income, increased
38.4% to £14.74m (2023: £10.65m); statutory revenue, excluding agent
commission income, for the year was £14.74m (2023: £11.32m).
· Underlying operating profit of £0.22m (2023: £0.51m), with strong
performance from Higher Education ("HE") and Juniors.
· Underlying loss for the year was £0.13m (2023 profit: £0.15m),
resulting in an Underlying loss per share of 0.53 pence (2023 profit: 0.60
pence) with key contributors to the loss being underperforming Adult English
Language Training ("ELT") and forward investment associated with securing new
Pathway contracts.
· The Statutory loss before tax for the year was £0.15m (2023 loss:
£0.14m).
· Group debt reduced from £2.24m to £1.86m in 2024 due improved cash
flows with the remaining balance expected to reduce monthly across 2025.
· Continued investment in people, sales and marketing, compliance and
admissions to support future growth.
Richard Mace, Chief Executive Officer, said: "We continue to grow student
numbers in the Pathways and Juniors businesses. Students are achieving high
levels of attainment, and we are receiving positive feedback on student
satisfaction. Our investments in 2024 to leverage our success with the
University of East London ("UEL") have resulted in two new partnerships and a
pipeline of new opportunities. With both new international study centres in
addition to UEL due to welcome students from September 2025, we will see a
period of forward investment as we prepare to grow international student
numbers, creating a significantly larger organisation."
For further information, please contact:
Malvern International Plc www.malverninternational.com (http://www.malverninternational.com/)
Mark Elliott - Chairman Via our website
Richard Mace - Chief Executive Officer
Zeus (NOMAD & Broker) https://zeuscapital.co.uk/ (https://zeuscapital.co.uk/)
Mike Coe / James Bavister 0203 829 5000
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 provides on and off-campus in-sessional and pre-sessional
programmes to support international students in progressing to a wide range of
universities and undergraduate courses. Malvern assists its university
partners with international student recruitment and conversion, admissions,
fee collection, and course delivery, including teaching, orientation, and
student support.
English Language Teaching is provided to adults at Malvern House Schools,
accredited by the British Council and registered in the UK, with centres in
London and Manchester. For Juniors aged 13 to 18, fully immersive
residential English language centres and customised language programmes are
available at high-quality locations.
For further investor information go to www.malverninternational.com
(http://www.malverninternational.com/) .
CHAIRMAN'S STATEMENT
Our early investments in expanding sales teams and appointing key senior
leaders, while maintaining high standards in education and student support,
delivered strong top line growth in the Pathways and Juniors businesses.
However, the combination of underperformance in Adult ELT and forward
investment in securing new Pathways contracts contributed to the loss in
2024.
In Pathways, we saw student growth at UEL in 2024, solidifying its position as
one of the UK's largest International Study Centres. Negotiations regarding
a new long-term contract with UEL are progressing at a senior level. In the
interim, UEL have confirmed our continued delivery for the September 2025
intake, and we expect the formal agreement for the 2025/26 academic year to be
signed shortly. Following the year end, our strategy to expand University
Partnerships has progressed with the addition of two new partners: the
University of Wolverhampton and the University of Cumbria. Both universities
will welcome international students from September 2025, requiring further
investment in our sales and support functions. Importantly, these partnerships
allow us to collect a portion of course fees before delivery. As both
contracts are delivered on campus, we have no property commitments, ensuring
they will be cash flow positive from year one and are expected to contribute
to Group profits from FY2026. We have ambitious student targets and expect
these partnerships to significantly enhance long-term performance.
In ELT, Juniors had a strong summer season with year-on-year growth. However,
the Adult segment faced tough competition, price reductions, and declining
student weeks. With low barriers to entry, high fixed property costs, and
limited repeat business, our strategy for Adults is under review.
With excellent feedback from our 2024 Junior programmes, we are well
positioned to expand, adding new centres and offering both ELT and academic
programmes beyond London and outside the summer peak season. In 2025, we will
add three new Juniors centres, bringing the total to eleven, and with existing
capacity, we are targeting further revenue growth from this division.
Going forward, we are focused on improving utilisation across both fixed
(Adult ELT) and temporary (Juniors) centres to enhance overall ELT
performance. We are in discussions with centre providers to secure multi-year
contracts for Juniors programmes, ensuring long-term stability.
For Pathways, we have an established pipeline of opportunities for the coming
years and are in discussions about additional partnerships. However, our
primary focus for 2025 is to successfully deliver our first student cohorts
with new universities in September, build our partnership with UEL, and ensure
we have the necessary resources to provide exceptional service and outstanding
experiences for international students.
We are building a high-quality team that is successfully delivering on our
strategy. I would like to take this opportunity to thank our staff for their
professionalism, commitment, and dedication to the business.
In conclusion, we are pleased with our progress in creating a much more
significant business. While the Board continues to evaluate its approach to
Adult ELT, our growth in student numbers and centres is driving positive
momentum and we have a strong pipeline of further opportunities. Early
bookings for the summer peak season are strong, and our two new long-term
contracts demonstrate that we are meeting market demand.
Finally, our ability to collect cash upfront is enhancing cash flow stability,
enabling us to self-finance the investments needed to achieve our growth
plans.
Mark Elliott, Chairman
OPERATING REVIEW
Higher Education and University Pathways
The student intake at the International Study Centre at UEL for September 2024
was 489, a 9% increase from the previous year's 447. In 2024, we achieved a
42% increase in revenue, net of agent commission, which passes directly to our
agents, and currently have c.1,000 international students enrolled at UEL.
Students continue to achieve high levels of attainment and satisfaction, and
we are continuing our discussions with UEL regarding a potential longer-term
contract.
We were delighted to announce two new partnerships post year end with the
University of Wolverhampton and the University of Cumbria to expand the
universities' international Pathway and pre-masters programmes for
international students in preparation for undergraduate and post-graduate
degrees. We have ambitious growth targets and are aiming to reach over 650
international students annually across both universities within five years.
English Language Training
In ELT, the Juniors division saw another strong summer season with £6.03m
revenue from 3,405 students running across eight centres (FY2023: 2,478
students, £3.72m revenue and five centres).
Adult ELT tuition fee revenue, excluding agents' commission, decreased
approximately 10% to c. £1.69m (FY2023: £1.88m) as a result of price
competition leading to a reduction in course fees and student weeks in the
year-round schools. Despite investments in our sales function to increase
student numbers and take market share, Adult ELT continues to face tough
competition and a high fixed-cost base.
In addition, the industry is still some way off recovering to pre COVID-19
levels (currently 71%). The increase in employers' national insurance
contributions from April will further impact operating margins in the
business. The Board remains committed to Adult ELT since it shares many
resources and sales structures with Juniors and provides the education
accreditations required for Juniors and Pathways. However, the Board also
recognises that Adult ELT must operate from a lower cost base to remain
viable. The Board is reviewing all options to restore profitability to Adult
ELT operations.
Our people
We continue to invest in our teams, bringing in the resources and building a
senior leadership team that supports our growth ambitions.
In 2024, we employed 127 members of permanent staff, made up of 61 academic
staff and 66 support, sales, and leadership staff. During the peak summer
period, this increased by over 50 academic and 40 operation staff.
In the first half, we expanded our sales team with key appointments and
welcomed a new Marketing Director, Maya Frost, to strengthen sales and
recruitment efforts. In November, we appointed James Findley as Chief
Operating Officer. With a strong background in admissions, resource
management, and process optimisation, James is leading the Group's strategic
operations to drive sustainable growth and innovation. His focus is on
delivering meaningful learning experiences for international students while
ensuring seamless operations that enhance student experiences and support
long-term success.
To support our growing team, we promoted Kelly McGrath to Head of HR. We
remain committed to a "right people, right place, right time" approach,
ensuring we have the talent needed to drive success. Additionally, we have
implemented a robust Talent and Succession process, fostering long-term career
growth and development in a positive, rewarding, and innovative work
environment.
Financial and student administration
We continue to strengthen and streamline our administrative function. Our
admissions and compliance department plays a vital role in managing student
conversion and enrolments, ensuring compliance with regulatory requirements,
and supporting our recruitment strategy. We maintained high UK visa acceptance
rates, reflecting strong quality control in university recruitment and
applications.
In 2025, we are investing in new student management software to uphold high
standards as application volumes grow. Additionally, we are committed to
supporting high student attainment levels by closely monitoring academic
progress and ensuring students meet the requirements to progress to their
prospective degrees. This is essential for the long-term success of our
partnerships and attractiveness of universities to international students.
To achieve this, our centre administrative staff provide both academic and
pastoral support, maintaining regular contact with students and implementing
early intervention when needed.
Sales and marketing
We created a new Pathways marketing team in 2024, hiring a Marketing Manager
and a Marketing Executive. During the year, the team refreshed the Group's
marketing strategy. The team was responsible for Malvern's attendance and
involvement at over 100 student recruitment events and roadshows across all
key regions has been instrumental in the growth in student numbers.
Outlook
University Pathways continues to grow, with January's intake substantially
higher than the previous year at 495 students (January 2024: 319, January
2023: 245 students, January 2022: 80 students). With c. 1,000 students
studying on courses for the 2024/25 academic year, UEL is now one of the
largest international study centres in the UK.
Our investments in 2024 to leverage our success with UEL have resulted in two
new partnerships and we have an established pipeline of new opportunities.
With both international study centres due to welcome students from September
2025, we will see a period of forward investment. Both partnerships enable a
large proportion of course fees to be collected before course delivery each
academic year. Therefore, we expect the partnerships to be cash flow positive
in 2025 and contribute to profits from FY2026. We aim to grow international
student numbers sustainably at both universities, creating a significantly
larger organisation.
In Juniors, we are now taking bookings and will be running eleven centres in
2025, compared to eight in 2024. This includes our first Easter programme and
one academic programme to be held at University College London during the
summer. These two new programmes align with our strategy to build
out-of-season revenues and extend our geographic reach. Our focus for 2025 is
to improve centre utilisation across all three divisions.
Against this backdrop, we are focused on delivering increasing revenues and
consistent and sustainable profits from long term contracts.
Richard Mace, Chief Executive Officer
FINANCIAL REVIEW
Financial performance
Underlying revenue, excluding agent commission income, increased 38.4% to
£14.74m (2023: £10.65m). Statutory revenue for the year excluding agent
commission income was £14.74m (2023: £11.32m). The strongest performing
areas of the Group continues to be Higher Education (HE) and Juniors. Strong
revenue performance from this section of the Group delivered an Underlying
operating profit of £0.22m (2023: £0.51m).
The Underlying loss for the year was £0.13m (2023 profit: £0.15m), resulting
in an Underlying loss per share of 0.53 pence (2023 profit: 0.60 pence) with
key contributors to the loss being underperforming Adult ELT and forward
investment associated with securing new Pathway contracts. The growth of HE
and Juniors are currently the drivers of profitability. Student numbers
increased 28.7% in the 2024/25 HE academic year driving up profits from this
part of the Group. Underperforming Adult ELT and forward investment associated
with securing new Pathway contracts were the key contributors to the loss in
2024. Despite investments in our sales function to increase student numbers
and take market share, Adult ELT continues to face tough competition and a
high fixed-cost base.
The Statutory loss for the year was £0.15m (2023 loss: £0.16m). A favourable
warrants revaluation (£0.06m) was offset by Non-Underlying costs of
finalising the closure of Malvern House Brighton, share-based payments, and
ongoing staff restructuring costs across the Group, which together amounted to
£0.07m.
Operating costs
Group Underlying salaries and benefits increased in 2024 to £3.89m (2023:
£2.69m). This rise can be attributed to forward investment (£0.3m) in
staffing in line with the Group's strategy to secure new HE partners and grow
student numbers at existing partners. The significant increase in Juniors
revenue also resulted in increased delivery costs, including £0.29m in
increased centre staff costs. In addition, market challenges around cost of
living, salary expectations, and staff retention, have also contributed to a
rise in our wage bill.
Group Underlying other operating expenses increased to £2.77m in 2024 (2023:
£2.04m). A significant proportion of this increase can be attributed to the
investment (£0.28m) in growing the Pathways division. This included legal
fees incurred in developing and negotiating new university Pathway contracts,
consultants used to accelerate work on winning the new partnerships and
exploring the US market, accreditation costs, new systems, and website
improvements. Travel costs also increased by £0.22m. This spend is having a
direct contribution to rising revenues. In-person meetings and events with
agents remains a key component to growing student numbers. Travel spend is
also important to unlock new markets to diversify our student nationality mix
- which is a strategic aim of the Group.
Total Statutory operating expenses were £6.71m (2023: £5.19m).
Consolidated Statement of Financial Position
We continue to make incremental improvements on the Consolidated Statement of
Financial Position. Top line revenue growth has translated to an improved cash
position. A true representation of this improvement was evidenced during the
year when the Group's BOOST & Co debt was reduced from £2.24m to £1.86m
in 2024. We expect to continue to reduce this balance monthly across 2025.
In addition, we continue to reduce the only remaining historical supplier
balance from the COVID-19 years - the London rent arrears. In total, £0.09m
was paid in 2024, leaving a remaining balance of £0.18m, to be cleared on an
agreed payment plan by the end of 2026.
The cash balance at the end of the financial year was £1.39m (2023: £2.20m)
- of which £0.91m is payable by the Group for summer accommodation costs due
to late invoicing. We continue to manage expenditure tightly. Cash flow is
anticipated to improve in 2025 when we begin collecting fees directly from the
students under the new Pathway partnership agreements.
Daniel Fisher, Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2024 2023
Note Underlying Non-Underlying Statutory Underlying Non-Underlying Statutory
£ £ £ £ £ £
Revenue
Sale of services 3 14,741,924 316 14,742,240 10,650,073 671,767 11,321,840
Agent commission 3 1,890,258 - 1,890,258 936,089 - 936,089
Total revenue 16,632,182 316 16,632,498 11,586,162 671,767 12,257,929
Direct costs
Cost of services sold (7,719,088) 16,034 (7,703,054) (5,191,668) (429,722) (5,621,390)
Agent commission expense (1,848,132) 20,180 (1,827,952) (893,784) (21,473) (915,257)
Total direct costs (9,567,220) 36,214 (9,531,006) (6,085,452) (451,195) (6,536,647)
Gross profit 7,064,962 36,530 7,101,492 5,500,710 220,572 5,721,282
Other income 4 136,017 - 136,017 51,631 - 51,631
Salaries and employee benefits (3,894,221) (308) (3,894,529) (2,694,714) (191,125) (2,885,839)
Staff restructure payments - (42,110) (42,110) - - -
Depreciation of plant and equipment (317,431) 884 (316,547) (311,314) (223,964) (535,278)
Other operating expenses 6 (2,764,877) (62,037) (2,826,914) (2,040,566) (33,610) (2,074,176)
Share-based payments - (4,951) (4,951) - (5,133) (5,133)
Warrants 6 - 61,318 61,318 - (225,518) * (225,518) *
Operating profit/(loss) 224,450 (10,674) 213,776 505,747 (458,778) 46,969
Finance costs 5 (355,134) (3,696) (358,830) (359,921) 168,170 (191,751)
Profit/(loss)before tax (130,684) (14,370) (145,054) 145,826 (290,608) (144,782)
Income tax charge - (6,077) (6,077) - (15,256) (15,256)
Profit/(Loss) for the year being total comprehensive income/ (expenses) (130,684) (20,447) (151,131) 145,826 (305,864) (160,038)
attributable to owners of the parent
2024 2023
Note Underlying Non-Underlying Statutory Underlying Non-Underlying Statutory
£ £ £ £ £ £
Total comprehensive income/ (expense) for the year (130,684) (20,447) (151,131) 145,826 (305,864) (160,038)
Attributable to:
Equity holders of the parent (130,684) (20,447) (151,131) 145,826 (305,864) (160,038)
Profit/(loss) per share attributed to equity holders of the Company (in pence)
2024 2023
Note Underlying Non-Underlying Statutory Underlying Non-Underlying Statutory
£ £ £ £ £ £
Basic 7 (0.53) (0.06) (0.59) 0.60 (1.19) (0.59)
Diluted 7 (0.53) (0.06) (0.59) 0.60 (1.19) (0.59)
* The warrants for the prior year have been separately disclosed from the
Other Operating Expenses.
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
Group Company
Note 2024 2023 2024 2023
£ £ £ £
TOTAL ASSETS
Non-current assets
Property, plant, and equipment 71,525 68,310 - -
Intangible asset 16,080 - - -
Goodwill 1,419,350 1,419,350 - -
Investment in subsidiaries - - 1,419,350 1,419,350
Right-of-use assets 1,406,850 1,710,534 - -
Total non-current assets 2,913,805 3,198,194 1,419,350 1,419,350
Current assets
Inventories 19,625 8,166 - -
Trade receivables 791,743 440,541 - -
Other receivables and prepayments 1,565,947 918,994 131,736 116,485
Amounts due from subsidiaries - - - 70,403
Cash and cash equivalents 1,391,605 2,196,499 4,733 2,273
Total current assets 3,768,920 3,564,200 136,469 189,161
Total assets 6,682,725 6,762,394 1,555,819 1,608,511
EQUITY AND LIABILITIES
Non-current liabilities
Term loan 9 1,023,238 1,811,784 992,282 1,765,039
Warrants 9 353,963 415,281 353,963 415,281
Lease liabilities 9 1,532,549 2,086,428 - -
Total non-current liabilities 2,909,750 4,313,493 1,346,245 2,180,320
Current liabilities
Trade payables 9 1,462,756 1,495,664 88,310 96,730
Contract liabilities 3,080,256 2,460,265 - -
Other payables and accruals 1,899,193 1,523,053 292,755 184,781
Amounts due to subsidiary - - 5,772,490 3,410,452
Lease liabilities 9 563,460 418,267 - -
Term loan 9 670,763 313,484 653,516 296,236
Total current liabilities 7,676,428 6,210,733 6,807,071 3,988,199
Total liabilities 10,586,178 10,524,226 8,153,316 6,168,519
Equity attributable to equity holders of the Company
Group Company
Note 2024 2023 2024 2023
£ £ £ £
Share capital 10 11,323,899 11,323,899 11,323,899 11,323,899
Share premium 6,797,950 6,797,950 6,797,950 6,797,950
Other reserves 11 17,141 12,190 17,141 12,190
Retained earnings (22,042,443) (21,895,871) (24,736,487) (22,694,047)
Total equity (3,903,453) (3,761,832) (6,597,497) (4,560,008)
Total Equity and Liabilities 6,682,725 6,762,394 1,555,819 1,608,511
The Statutory loss for the year as per the financial statements of the parent
company on 31 December 2024 was £2,042,440 (2023: Loss £2,076,836).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Retained Other
Capital * Premium Earnings Reserves Total
£ £ £ £
Balance at 1st January 2023 11,323,899 6,797,950 (21,762,885) 7,057 (3,633,979)
Total comprehensive expense for the year - - (160,038) - (160,038)
Add: tax adjustments for prior years - - 27,052 - 27,052
Share-based payments (EMI options) - - - 5,133 5,133
Balance at 31st December 2023 11,323,899 6,797,950 (21,895,871) 12,190 (3,761,832)
Total comprehensive expenses for the year - - (151,131) - (151,131)
Deferred tax adjustments for 2024 - - 4,559 - 4,559
Share-based payments (EMI options) - - - 4,951 4,951
Balance at 31 December 2024 11,323,899 6,797,950 (22,042,443) 17,141 (3,903,453)
COMPANY STATEMENT IN CHANGES IN EQUITY
Share Share Retained Other
Capital Premium Earnings Reserves Total
£ £ £ £
Balance at 1st January 2023 11,323,899 6,797,950 (20,617,212) 7,057 (2,488,306)
Total comprehensive expense for the year - - (2,076,835) - (2,076,835)
New share from share-based payments (Inc. EMI Options) - - - 5,133 5,133
Balance at 31st December 2023 11,323,899 6,797,950 (22,694,047) 12,190 (4,560,008)
New share from share-based payment (incl. EMI options) - - - 4,951 4,951
Total comprehensive expense for the year - - (2,042,440) - (2,042,440)
Balance at 31st December 2024 11,323,899 6,797,950 (24,736,487) 17,141 (6,597,497)
CONSOLIDATED STATEMENT OF CASH FLOWS
2024 2023
£ £
Cash flows from operating activities
Loss after income tax from (151,131) (160,038)
Adjustments for:
Depreciation of tangible assets 328,067 523,938
Fair value movements- warrants (61,318) 225,518
Fair value movements- loan write back - (94,216)
Share based payments 4,951 5,133
Profit/(loss) on disposal of tangible assets - 1,141
Impairment of trade receivables 158,702 23,116
Increase in stocks (11,459) (8,166)
Taxation adjustment 4,559 -
Finance cost 354,854 191,752
Interest paid (140,726) (142,610)
Tax paid - 16,771
486,499 582,339
Changes in working capital:
(Increase)/decrease in receivables (1,152,026) 158,389
Increase/(decrease) in payables 694,716 1,219,396
Net cash flows generated by operating activities 29,189 1,960,124
Cash flows from investing activities
Purchases of property, plant, and equipment (27,597) (58,184)
Investment in website design (16,080) -
Net cash used in Investing Activities (43,677) (58,184)
Cash flows from financing activities
Repayment of lease liabilities (297,739) (557,017)
Additional loan 22,336 43,679
Term loan (515,003) (373,734)
Net cash used in financing activities (790,406) (887,072)
Net change in cash and cash equivalents (804,894) 1,014,868
Cash and cash equivalents at the beginning of the year 2,196,499 1,181,631
Exchange losses on cash and cash equivalents - -
Cash and cash equivalents at the end of the year 1,391,605 2,196,499
COMPANY STATEMENT OF CASH FLOWS
2024 2023
£ £
Cash outflows from operating activities
Loss before income tax (2,042,440) (2,076,836)
Share based payments 4,951 5,133
Fair value movements - warrants (61,318) 225,518
Fair value movements - loan write back - (94,216)
Finance cost 195,836 58,609
Interest paid (139,267) -
(2,042,238) (1,881,792)
Change in working capital
(Increase)/decrease in receivables (10,421) (74,714)
Increase/(decrease) in creditors 99,555 183,739
Decrease in amounts owed by group undertakings 70,403 -
Increase in amounts due to subsidiaries 2,362,037 2,077,641
Net cash generated by operating activities 479,336 304,874
Cash flows from financing activities
Repayment of term loan (499,212) (359,381)
New loan 22,336 43,679
Net cash used in financing activities (476,876) (315,702)
Cash flows used in investing activities - -
Net increase/(decrease) in cash and cash equivalents 2,460 (10,828)
Cash and cash equivalents at the beginning of the year 2,273 13,101
Cash and cash equivalents at the end of the year 4,733 2,273
Notes to the financial statements
1. General information
Malvern International plc (the "Company") is a public limited company
incorporated in England and Wales on 8 July 2004. The Company was admitted to
the AIM on 10 December 2004. Its registered office is 3rd Floor 1 Ashley Road,
Altrincham, Cheshire, United Kingdom, WA14 2DT. The registration number of the
Company is 05174452.
The principal activity of the Group 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 year.
2. Significant accounting policies
Basis of Preparation
These financial statements of the Group and Company are prepared on a going
concern basis, in accordance with International Financial Reporting Standards
(IFRS) and IFRIC interpretations issued by the International Accounting
Standards Board (IASB) and adopted by the United Kingdom, in accordance with
the Companies Act 2006.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses.
The estimates and associated assumptions are based on historical experience
and factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making judgements about carrying values of
assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Alternative performance measures (APMs)
The consolidated financial statements include APMs as well as Statutory
measures. The APMs used by the Group are not defined terms under IFRS and may
therefore not be comparable with similarly titled measures reported by other
companies. They are not intended to be a substitute for, or superior to, IFRS
measures. All APMs relate to the current year's results and comparative
periods where provided.
This presentation is also consistent with the way that financial performance
is measured by management and reported to the Board, the basis of financial
measures for senior management's compensation schemes and provides
supplementary information that assists the user in understanding the financial
performance, position and trends of the Group. See note 8 for a reconciliation
of Statutory information to Underlying information.
Going concern
The financial statements have been prepared on a going concern basis. The
directors consider the going concern basis to be appropriate having paid due
regard to the Group and Company's projected results during the twelve months
from the date the financial statements are approved and the anticipated cash
flows, availability of loan facilities and mitigating actions that can be
taken during that period.
The Group produced an Underlying loss for the year £130,684 (2023: Underlying
profit £145,826). BOOST&Co is the Group's term loan provider. The current
debt in the accounts of Malvern International Plc is, £1.86m. BOOST&Co
Limited, acting on behalf of IL2 (2018) Sarl, have again provided a letter of
comfort to provide ongoing financial support to the Company for any short-term
working capital requirement should that become necessary. It is the present
policy of BOOST&Co to ensure that the Company has adequate financial
resources to meet their obligations and to enable it to continue as a going
concern for a period of at least 12 months from the date of the signing of the
financial statements.
The Company has not required any cash from BOOST&Co, or shareholders, in
the past two years which highlights the sustained growth and the Company's
significantly improved financial position post COVID.
The significant revenue growth seen in 2024, in combination with the
visibility of University Pathways revenue in H1 2025 gives the Board
confidence about Malvern's short- and long-term prospects. In addition, the
Company signed two new Pathway partners in Q1 2025, with the first intake of
students due in September 2025.
In our Pathway division, student numbers are up c. 32% on the prior academic
year (2023/24 v 2024/25), which reflects the significant investment in this
division. Our Junior summer camps continue to experience rapid growth,
delivering c. £6.03m (2023: £3.7m) in revenue to the Company. Pre-bookings
for 2025 summer camps are very encouraging and revenue growth is expected as
an outcome.
Profit and cash flow projections for the Company indicate that the company is
expected to maintain profitability in 2025. The Directors therefore continue
to adopt the going concern basis in preparing the financial statements.
Despite significant revenue growth in 2024 and forecasts for 2025, UK and
global macroeconomic factors continue to create uncertainty in the Group's
forecasts. The continued commitment from the Group's lenders in the form of
the letter of support provides confidence to the Group in respect of future
funding. However, there still remains a material uncertainty with respect to
the going concern status of the Group.
3. Revenue
i. Sale of services
2024 2023
£ £
Course fees 13,137,635 9,753,210
Application fees, registration and examination fees 122,320 170,468
Training fees, course materials and others 122,307 125,264
Accommodation fees 1,359,978 1,272,898
14,742,240 11,321,840
ii. Agent commission income
2024 2023
£ £
Agent commission income 1,890,258 936,089
Agent commission is received from a university partner. A significant portion
is then passed directly to the Group's agents.
iii. Segments
The directors consider that the Group has a single business segment, being the
sale of education services. The operations of the Group are managed centrally
with group-wide functions covering sales and marketing, finance and
administration. Geographically, operations are all UK based. Revenue from
customers who individually accounted for more than 10% of total Group revenue
amounted to £ 7,058,850 (2023: £4,366,043).
4. Other income
2024 2023
£ £
Rental income 137,069 32,400
R&D credits* (19,182) 19,231
Interest Income 16,674 -
Other Income 1,456 -
136,017 51,631
*A R&D credit was refunded to HMRC during the year.
5. Finance costs
2024 2023
£ £
Interest in leases (IFRS 16) 157,559 147,084
Brighton Interest charge and adjustment for early lease termination - (168,170)
Interest in term loan 197,292 212,694
Other finance costs 3,979 143
358,830 191,751
6. Operating expenses
2024 2023
£ £
Auditor's remuneration:
- Fees payable to the Company's auditors for statutory audit 67,345 51,675
- Fees payable to the Company's auditors for statutory audit of 55,100 37,495
subsidiary company
- Non-audit fees for taxation compliance fees - 9,500
Consultant Fees:
- Non-audit fees for taxation compliance fees 8,500 -
Administrative and marketing expenses 2,360,413 1,887,783
Expected credit losses - trade receivables 335,556 181,939
Fair value movement- warrants (61,318) 225,518
Fair value movement- loan write-back - (94,216)
2,765,596 2,299,694
7. Loss per share
The basic and diluted statutory loss per share attributable to equity holders
of the Company is based on the statutory loss attributable to shareholders of
£151,131 (2023: statutory loss of £160,038). The weighted average number of
ordinary shares in issue during the year is 24,442,400 shares (2023:
24,442,400 shares). The Statutory loss per share (in pence) attributed to
shareholders is 0.59 (2023: statutory loss per share of 0.59).
8. Reconciliation of statutory information to Underlying information
Underlying information is provided because the Directors consider that it
provides assistance in understanding the Group's underlying performance.
Further details in relation to alternative performance measures (APMs) are
contained within note 2.
The following table includes details of non-Underlying items and reconciles
Statutory information to Underlying information:
Sale of services Agent commission Income Revenue Direct costs Gross profit Operating profit Finance costs (Loss) / profit before tax
2024 £ £ £ £ £ £
Statutory results 14,742,240 1,890,258 16,632,498 (9,531,006) 7,101,492 213,776 (358,830) (145,054)
Malvern House Brighton ((a)) 316 - 316 36,214 36,530 (24,931) (3,696) (28,628)
Share-based payments ((b)) - - - - - (4,951) - (4,951)
Warrants ((c)) - - - - - 61,318 - 61,318
Staff restructure payments ((e)) - - - - - (42,110) - (42,110)
Underlying results 14,741,924 1,890,258 16,632,182 (9,567,220) 7,064,962 224,450 (355,134) (130,684)
Sale of services Agent commission Income Revenue Direct costs Gross profit Operating profit Finance costs (Loss) / profit before tax
2023 £ £ £ £ £ £
Statutory results 11,321,840 936,089 12,257,929 (6,536,647) 5,721,283 46,969 (191,751) (144,782)
Malvern House Brighton ((a)) 671,767 - 671,767 (451,195) 220,572 (325,392) 168,170 (157,222)
Share-based payments ((b)) - - - - - (5,133) - (5,133)
Warrants((c)) - - - - - (225,518) - (225,518)
Loan write-back ((d)) - - - - - 97,265 - 97,265
Underlying results 10,650,073 936,089 11,586,162 (6,085,452) 5,500,711 505,747 (359,921) 145,826
a) Malvern House Brighton
During the year, the Malvern House Brighton was closed. The decision was made
following a review of the viability of the school, informed by current
operations, overhead costs, projected student numbers, financial performance
and the further investment required for the school to achieve profitability
which it had yet to do.
b) Share-based payments
The Company has an Enterprise Management Incentive share option scheme for
certain directors and employees. Under the scheme, participants have been
awarded options to acquire up to a prescribed level of shares.
c) Warrants
As part of the term loan, BOOST & Co. was issued warrants over 1,840,949
shares. These warrants are exercisable at the Strike Price at any time over
the following 10 years since the inception of term loan in August 2019. The
warrants are revalued at fair value annually, any movement is expensed in the
Consolidated Statement of Comprehensive Income.
d) Loan write-off
A loan associated with the Group's past business activities in Malaysia was
written off during the prior year.
e) Staff restructure payments
The management of the Group are completing a staff review to ensure that we
are using our resources as efficiently as possible.
9. Financial liabilities
Group Company
2024 2023 2024 2023
£ £ £ £
Non-current liabilities
Term loan 1,023,238 1,811,784 992,282 1,765,039
Warrants 353,963 415,281 353,963 415,281
Lease liabilities 1,532,549 2,086,428 - -
2,909,750 4,313,493 1,346,245 2,180,320
Current liabilities
Term loan 670,763 313,484 653,515 296,236
Lease liabilities 563,460 418,267 - -
Trade and other payables 1,462,756 1,495,664 88,310 96,730
2,696,979 2,227,415 741,825 392,966
Total 5,606,729 6,540,908 2,088,070 2,573,286
Term Loan
In August 2019, Malvern received a Term Loan from BOOST & Co. for
£2,600,000. This loan originally carried an interest rate as the higher
of (a) 10% per annum, or (b) 8% per annum plus LIBOR. The loan was
restructured in March 2022, the new terms includes a 12-month payment and
interest holiday with monthly payments commencing from March 2023 over a
five-year period, with the interest being set at 7% for the first two years
and 10% for the subsequent three years. There are no early repayment penalties
on this facility.
During 2020, the Group took advantage of the Government-backed Bounce Back
Loan Scheme (BBLS), benefiting from a total of £100,000 to be repaid over a
six year period with a 2.5% fixed rate of interest. The first 12 months of
this lending facility are free of any obligation to pay capital or interest.
The balance outstanding at 31 December 2024 is £48,203 (2023: £63,993).
Warrants
As part of the term loan, BOOST & Co. were issued warrants
over 1,840,949 shares. These warrants are exercisable at the Strike Price at
any time over the following 10 years since the inception of the term loan in
August 2019.
As at the date of the financial position, the Group has fair valued these
warrants at £353,963 (2023: £415,281). The following estimates were used
to calculate this fair value:
· Annualised volatility of 65% (2023: 83%), which is consistent with a
lifetime and post-COVID adjustment. This is a reduction on last year but the
pandemic related volatility can now be viewed as an outlier and not consistent
with the expected long term evolution of the share price.
· Maturity of 56 months applied, reflecting the duration over which
BOOST & Co. could exercise these warrants.
· Risk free rate of 4.014% (2023: 3.64%), being the Yield on
UK 5-year Government bonds.
· Strike price of £0.10 for the share warrants issued in 2019 and 2020
and strike price if £0.106 for warrants issued thereafter
10. Share capital
Allotted, called up and fully paid
No. of ordinary shares Nominal value of ordinary shares No. of deferred shares Nominal value of deferred shares Nominal value of all shares
At 31 December 2023 - 0.1p ordinary shares and 0.1p, 1p & 5p deferred 24,442,400 244,424 3,025,620,350 11,079,475 11,323,899
shares
Additions during the year ― ― ― ― ―
At 31 December 2024 - 0.1p ordinary shares and 0.1p, 1p & 5p deferred 24,442,400 244,424 3,025,620,350 11,079,475 11,323,899*
shares
* Excludes the accumulated share-based payment balance. The Share based
payments are booked in to equity under Other Reserves for £17,141 (2023:
£12,190).
The Company has an EMI share option scheme for certain Directors and
employees.
11. Share-based payments and share options
The Company has an EMI share option scheme for certain directors and
employees. Under the scheme, participants have been awarded options to acquire
up to a prescribed level of shares following a 3-year vesting period if the
Company's share price has met the pre-determined target conditions. There are
two market-based conditions, each accounting for 50% of the share options
awarded to the employee. In addition, the mid-market share price of the
Company on the AIM Market of the London Stock Exchange, must stay at or above
the exercise price, for 40 consecutive business days.
The Group used the Black Scholes valuation framework for all share options
awarded pre-2024. These options have also been valued using the Monte Carlo
valuation method to validate the reasonableness of the results. The results
from the Monte Carlo valuation were not considered materially different from
the Black Scholes valuation.
The inputs into the Black Scholes model as at 31 December 2024 are as follows:
Grant date EMI options* Exercise price (pence)* Strike price on grant date (pence)* Vesting period (years) Expected volatility Risk free rate Fair value Deemed probability of achieving market condition
02/12/2020 308,750 50 15 3 12.30% 0.35% 0.34 5.02%
02/12/2020 308,750 90 15 3 12.30% 0.35% 0.74 0.37%
18/01/2022 60,000 50 15 3 11.98% 0.35% 0.35 5.30%
18/01/2022 60,000 90 15 3 11.98% 0.35% 0.75 0.37%
01/09/2022 223,750 60 22 3 10.45% 0.26% 0.38 1.10%
01/09/2022 223,750 110 22 3 10.45% 0.26% 0.87 0.00%
As with options containing performance-based market targets, the probability
of achieving the set condition is factored into the determination of the
value. These will not be re-measured at subsequent reporting dates.
The vesting probabilities presented are products of lognormal distribution
modelling over a 3-year period, to determine the likelihood of the vesting
condition being reached based off the scaled mean and standard deviation from
a prior 365-day period.
The Group has used the Monte Carlo valuation framework for all share options
awarded in 2024.
The inputs into the Monte Carlo model as at 31 December 2024 are as follows:
Grant date EMI options Hurdles Strike price on grant date (pence) Expiry Volatility Option price Share price
(pence)
(years)
(pence)
(pence)
30/11/2022 192,500 60 10 5 50% 2.93 12
30/11/2022 192,500 110 10 5 50% 1.34 12
15/11/2023 143,750 115 23.5 5 70% 10.4 24.5
15/11/2023 143,750 150 23.5 5 70% 10.4 24.5
11/10/2024 244,717 115 18 5 66% 6.6 18
11/10/2024 244,717 150 18 5 66% 5.6 18
For options with hurdles, early exercise is assumed to take place as soon as
the 40-day hurdle requirement is triggered after the 3-year vesting period.
The Monte Carlo simulation uses 50,000 iterations to enhance the accuracy of
the predicted outcome.
Year ended 31 December 2024
Number of options Weighted average strike price
Outstanding at 1 January 2024 2,140,000 17.01p
Granted during the year 489,434 18p
Exercised during the year - -
Forfeited during the year (382,500) -
Outstanding at 31 December 2024 2,246,934 19.70p
Exercisable - -
Of the options outstanding at 31 December 2024, 670,000 (2023: 860,000)
options have an exercise price of 15 pence, 415,000 (2023: 567,500) options
have an exercise price of 22 pence, 385,000 (2023: 425,000) options have an
exercise price of 10 pence, 287,500 (2023: 287,500) options have an exercise
price of 23.5 pence and 489,434 (2023: 0) options have an exercise price of 18
pence.
The aggregate charge for share options recognised in the Group financial
statements in the year was £4,951 (2023: £5,133).
12. Subsequent events
Malvern International Plc has entered into new long-term partnerships with the
University of Wolverhampton and the University of Cumbria post year end 2024.
The annual report and accounts together with the notice of AGM to be held on
11 June 2025, are expected to be uploaded to the Company's website and posted
to shareholders in due course.
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