REG - Malvern Inter. PLC - Final Results
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RNS Number : 0996V Malvern International PLC 03 March 2026
3 March 2026
Malvern International plc
("Malvern", the "Company" or the "Group")
Final results for the nine months ended 30 September 2025
Malvern International plc (AIM: MLVN), the global learning and skills
development partner, announces its final results for the nine months ended 30
September 2025.
Financial highlights
· Underlying and statutory revenue, excluding university commission
income for the nine months to 30 September 2025 ('the Period'), was £14.12m
(12 months to 31 December 2024 ('FY2024'): £14.74m).
· Underlying operating profit was £0.38m (FY2024: £0.22m), with
growth from Higher Education and Juniors.
· Underlying profit was £0.09m (FY2024: loss £0.13m), resulting in an
Underlying profit per share of 0.39 pence (FY2024: loss 0.53 pence) with key
contributors to the profit delivered by Higher Education and Juniors.
· The statutory loss was £1.29m (FY2024; loss £0.15m), with
impairment of the full value of goodwill primarily relating to the Communicate
School, Manchester of £1.42m, following the closure of Adult English Language
Teaching ('ELT') in March 2026.
· Group debt reduced from £1.86m at FY2024 to £1.45m at the Period
end, due to ongoing repayment of the Term Loan.
· Net cash generated from operating activities during the Period
totalled £1.65m (FY2024: £0.17m); cash flow is expected to continue to
improve.
· Cash balance at the Period end was £1.89m (FY2024: £1.39m).
Operating highlights
· Three new long-term university partnership contracts awarded, with a
further contract awarded post Period end, now entering execution and scale
phase.
· Strong summer season from Junior division across nine centres.
· Continued investment in people, sales and marketing, and compliance
and admissions to scale the new contracts.
· Reshaped the ELT business to focus on scaling Junior divisions and
closing Adult ELT post-Period end.
Richard Mace, Chief Executive Officer, said: "During the Period we
successfully secured three new University Pathway contracts, and invested
further in the division. In the meantime, we continued to service the existing
partnerships, achieving high levels of student attainment and satisfaction. In
ELT, we had a busy summer season with Juniors, while Adult ELT remained
subdued. As a result, we made the decision to reshape ELT to focus on the
Junior market.
Our actions over the past two years have resulted in a more resilient and
diversified business, supported by long-term contracts, a capital-light
operating model, and a proven track record of delivery. Following the recent
fundraise of £1.95m net of expenses, we have the resources to develop and
scale up the four University Pathways contracts won over the last 12 months."
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 young learners through fully
immersive residential English language centres and customised language
programmes at high-quality locations.
For further investor information, go to www.malverninternational.com
(http://www.malverninternational.com/) .
CHAIRMAN'S STATEMENT
Our focus for 2025 was to secure new University Pathway contracts, enabling
us, as a smaller, more agile operator, to scale effectively. Additionally, we
continued to target growth in our Juniors offering by providing additional
centres and diversifying our product range.
Leveraging our success in rapidly establishing one of the largest
International Study Centres in the UK at the University of East London, we
were pleased to secure three long-term university partnerships, as well as a
one-year extension of our partnership with UEL.
We established a ten-year partnership with the University of Cumbria and a
five-year partnership with the University of Wolverhampton, with the first
cohort of students starting in September 2026. In July, we signed a five-year
contract to create an international student centre at Liverpool Hope
University, with the first cohort starting in January 2026.
With these contracts secured, our focus shifted to forward investment in
student recruitment, admissions, and compliance, as well as recruiting
teaching, student support, and pastoral care staff to maximise progression and
attainment rates. Alongside this, we continued to pursue a pipeline of
additional University Partnerships.
With the new University Partnerships signed, the Board decided to change the
Group's financial reporting date from 31 December to 30 September. The new
reporting date reflects a shift in the Group's focus towards the UK university
academic year, and will enable a clearer assessment of the operating and
financial performance of our partnerships. Consequently, this report covers
the nine months ended 30 September 2025 ('the Period').
During the Period, the Board continued to review its strategy for the
loss-making Adult ELT, as it remained well below pre-COVID performance levels.
In February 2026, the Board decided to reshape the ELT operations to focus
exclusively on Junior ELT and young learner camps, closing Adult ELT schools
in Manchester and London in a deal with a competitor. The strategic closure
has led to a full value impairment of goodwill relating to the Communicate
School of £1.42m in the accounts, resulting in a Statutory loss of £1.29m in
the Period.
Further, while the immediate short-term cost of closure for the year ended 30
September 2026 is expected to be approximately £0.30m, the Board expects to
benefit from annual savings of between £0.30m and £0.60m from 30 September
2027 ('FY2027'), depending on the utilisation of the London King's Cross
premises.
We now have a significantly larger portfolio of university partnerships,
featuring multi-year agreements and improved payment terms, putting us in a
much stronger position compared to the beginning of 2025. The recent
announcement of a 15-year contract with London Metropolitan University further
enhances our outlook. Additionally, we have a robust pipeline within the
Juniors division and currently plan to conduct camps at 11 centres this
summer. With Adult (ELT) no longer impacting the Group performance and the
extra working capital available from a £1.95m (after expenses) fundraising in
February 2026 (to be received across February and March), we are better
positioned to scale the business quickly and take advantage of the operational
gearing that successful scaling-up will create.
For the 2025/26 academic year, the university student recruitment numbers are
expected to be 989 students, compared to 1,023 the previous year. This is due
to softening intake at UEL and a partial recruitment cycle for the new
partnerships secured during the Period. With these numbers established for
FY2026, we anticipate the Group will incur an operating loss for the current
financial year. However, with ongoing investment in Pathways, a full
recruitment cycle for the universities of Wolverhampton, Cumbria, and
Liverpool Hope, and the recent contract with London Metropolitan University,
we expect the new partnerships to contribute significantly to profitability in
FY2027 as we begin to scale student numbers.
The actions taken over the past two years have resulted in a more resilient
and focused business, supported by long-term contracts, a capital-light and
scalable operating model, and a proven track record of delivery. The Group's
focus is now firmly on execution: scaling student recruitment at pace,
delivering strong academic outcomes, and translating this growth into
sustainable shareholder value.
Mark Elliott, Chairman
OPERATING REVIEW
Higher Education and University Pathways
In another successful Period for our Pathways business, student numbers
increased 28.8% in the 2024/25 academic year. Students continue to achieve
high levels of attainment and satisfaction.
We secured a one-year extension of our partnership with UEL for the 2025/26
academic year. In 2025 we established three new long-term contracts with
universities, ranging from five to ten years in duration with the University
of Wolverhampton in January, the University of Cumbria in February, and
Liverpool Hope University in July. As expected, with a longer lead-in to the
start of the academic year, student recruitment numbers were highest for
Wolverhampton. We were also pleased to see a more than two-fold increase in
student intake at our NCUK centre.
The Group invested significantly in Pathways growth during the Period. This
investment in new partnerships included additional sales staff, recruitment
activities and IT systems in preparation for delivering to a larger portfolio
of university partners.
Our product offering is being well-received by our agent network. With the new
contracts in place, we are investing significantly in University Pathway
partnerships to create the structures needed to reach target student numbers
and progression rates.
In addition to the new partnerships secured during the Period, we were pleased
in January 2026 to secure a 15-year exclusive partnership (with the option to
terminate every five years) with London Metropolitan University to rapidly
expand its international student body from September 2026, providing a range
of recruitment, education, and support services.
University student recruitment numbers are expected to be 989 students for the
2025/26 academic year, compared to 1,023 the previous year. This is due to
softening intake at UEL and a partial recruitment cycle for the new
partnerships secured during the Period. However, with ongoing investment in
Pathways, a full recruitment cycle for the universities of Wolverhampton,
Cumbria, and Liverpool Hope, and the recent contract with London Metropolitan
University, we will begin to scale student numbers.
English Language Training ('ELT')
The Juniors division saw another strong summer season with circa £6.52m
revenue from 3,471 students based across nine centres (FY2024: 3,405 students,
£6.03m revenue and eight centres). The Period also saw the launch of the
Global Futures Easter camp and Innovate Summer Academy.
We are very pleased with this performance, particularly the increase in
student numbers from Turkey and Latin America, resulting from our increased
sales and marketing in those regions.
Adult ELT tuition fee revenue, excluding agents' commission, decreased
approximately 10% to circa £1.33m (FY2024: £1.69m) as a result of price
competition leading to a reduction in course fees and student weeks in its
year-round schools. Following a thorough review, the Board decided to reshape
ELT to focus on the profitable Juniors segment, closing the Adult ELT in
February 2026. More information in relation to this closure can be found in
the Chairman's statement.
Our people
During the Period, we employed 195 permanent staff members, including 19 in
Adult ELT. These numbers increase substantially with temporary staff during
the peak summer season.
Following the announcement of our partnership with the Universities of
Wolverhampton and Cumbria, we hired an additional 33 staff members during the
Period to support these contracts and deliver our services. We continue to
invest in our teams, ensuring we have the resources needed to scale our
business.
New initiatives introduced during this Period included a focus on Mental
Health Awareness, a salary sacrifice pension scheme, and offering LinkedIn
Learning to all employees to support their personal and professional growth.
We also implemented training programmes to enhance soft skills and career
development, along with a rewards and recognition process that features
quarterly winners.
In collaboration with the marketing department, we rolled out our internal
corporate rebranding, which included a new Mission, Vision, and Values. These
were communicated to all staff, and we continue to ensure that they are
understood and incorporated into our daily activities.
The senior leadership team has been strengthened over the past two years with
individuals who bring significant experience in scaling international higher
education partnerships; the management is focused on disciplined execution as
the Group moves into its next phase of growth.
Sales and marketing
2025 was a pivotal year for the sales and marketing departments. Following a
strategic brand audit, Malvern refreshed its brands across corporate, and the
Juniors and Pathway divisions to resonate better with target audiences. This
was a wide-scope brand refresh, including an updated new look and updating
our corporate values, mission and vision. To align with the new branding, new
websites have been launched across our portfolio offering clear, informative,
and easy-to-use access to our programmes and services.
A joined-up marketing strategy, working alongside our sales team, is
strengthening our international student recruitment agent network, increasing
sales leads across a wider range of sending markets.
To mark the launch of the three new pathway partnerships in 2025, Malvern held
launch events across our key target markets in South Asia, East Asia, MENA and
West Africa. Our sales teams have run regional roadshows and attended key
industry events to expand our agent and partnership networks, including ICEF
Berlin, ICEF Japan and Korea, Alphe UK, Alphe Frankfurt, NAFSA US, and EAIE
Europe.
These efforts are positioning the Group to build student numbers for the
2026/7 academic year and beyond.
Financial and student administration
Our admissions and compliance department plays a vital role in managing
student conversions and enrolments, ensuring regulatory compliance, and
supporting our recruitment strategy. In 2025, we introduced a new student
management software to uphold high standards as application volumes grow. As a
result, we maintained high UK visa acceptance rates, reflecting strong quality
control in university recruitment and applications.
Achieving high student attainment levels is a key contractual requirement in
our university partnership contracts. We therefore closely monitor academic
progress and ensure students meet the requirements to progress to their
prospective degrees. This is essential for the long-term success of our
partnerships and the 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.
Outlook
The financial year ending 30 September 2026 ('FY2026') is expected to be a
period of preparation and investment, as the Group positions itself for
accelerated growth in subsequent years.
The Group has secured four new long-term university partnerships in the last
12 months, which are expected to make a meaningful contribution to
profitability from FY2027 onwards. Marketing activity for the London
Metropolitan University centre has commenced, with early engagement from the
agent network proving encouraging. In addition, FY2026 will represent the
first full recruitment cycle across several existing university partners,
providing an opportunity to continue building student volumes.
The Company intends to deploy a significant portion of the £1.95m raised
(after expenses) to scale its new Pathway partnerships. This investment is
expected to drive a material increase in operational gearing from FY2028. In
the near term, FY2026 Pathway revenues and margins will be impacted by
transitional changes to the Group's Pathway portfolio as it repositions
towards higher-quality, longer-term partnerships.
The reshaping of the Group's ELT strategy via the exit from Adult ELT,
enabling greater focus on faster-growing, cash generative, and profitable
segments will deliver annual cost savings of approximately £0.30m from
FY2027, increasing to up to £0.60m if the London King's Cross facility is
fully utilised following the exit. Immediate short-term exit costs, largely
staff redundancies, are expected to be circa £0.30m.
Taken together, these factors mean FY2026 is expected to be loss-making at the
operating level. From FY2027 onwards, the Group's financial performance is
expected to improve materially as student numbers scale across the new Pathway
partnerships. With a strengthened leadership and a proven track record in
executing Pathway contracts, the Directors are confident that the business
will return to profitability in FY2027. This is supported by strong demand, a
scalable operating model, and increasing operational leverage, is well
positioned to deliver substantial profit growth in the years that follow.
Richard Mace, Chief Executive Officer
FINANCIAL REVIEW
Financial performance
Underlying and Statutory revenue, excluding university commission income, for
the nine months ended 30 September 2025 ('the Period') was £14.12m (12 months
ended 31 December 2024 ('FY2024'): £14.74m). The Group's strongest-performing
areas continued to be Higher Education and Juniors, delivering an Underlying
operating profit of £0.38m (FY2024: £0.22m).
The Underlying profit for the Period was £0.09m (FY2024 loss: £0.13m),
resulting in an Underlying profit per share of 0.39 pence (FY2024: loss 0.53
pence). Student numbers in Higher Education and University Pathways increased
28.8% in the 2024/25 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 partially
offsetting the positive growth from increases in student numbers.
The Statutory loss for the Period was £1.29m (FY2024: loss £0.15m). The
driver for this was the impairment for the full value of goodwill relating to
the Communicate School, Manchester of £1.42m, following the closure of Adult
ELT in March 2026. Other non-Underlying items included share-based payments
and ongoing staff restructuring totalling £0.04m, offset by a favourable
warrants revaluation of £0.06m.
Operating costs
Group salaries and benefits during the Period were £3.74m, compared to
£3.89m in FY2024. The higher annualised cost base reflects the forward
investment in staffing to support a larger portfolio of Pathway partnerships.
This investment included new sales, admissions, conversion, centre, and
teaching staff to deliver growth in student numbers and pass rate targets, as
well as to secure additional HE partners.
Group Underlying other operating expenses during the Period were £2.39m
compared to £2.77m in FY2024. On an annualised basis, costs have increased,
primarily due to investment in Pathways IT systems and recruitment activities
to support the new university partnerships. IT spend increased by £0.16m
during the Period, which included the implementation of two new Pathway
systems. These systems will significantly improve our ability to convert
students at higher rates and ensure all students are thoroughly assessed, so
we can select the best-qualified students for our courses.
Financial position
We continue to make incremental improvements to our Financial Position. Group
debt continues to be reduced by operating cash flow, down from £1.86m at the
start of the Period to £1.45m at 30 September 2025. We expect to continue to
reduce this balance monthly throughout FY2026. Net cash generated from
operating activities during the Period totalled £1.65m (FY2024: £0.17m);
cash flow is expected to continue to improve.
In addition, we continue to clear the remaining historical supplier balance of
£0.14m from the COVID years (London rent arrears).
The cash balance at the end of the Period was £1.89m (FY2024: £1.39m), of
which £1.44m is payable by the Group for summer accommodation costs due to
late invoicing. In November 2025, we received a £2.23m payment from a large
customer, in line with the typical payment cycle for that customer. We
continue to manage expenditure tightly. Cash flow is expected to continue
improving in 2026 and into 2027, as fees for the new University Partnerships
are collected directly from students.
With the net proceeds of £1.95m from the recent successful fundraise, the
Group has sufficient working capital to scale the four contracts won over the
last 12 months.
Daniel Fisher, Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
9 months ended 30 September 2025 12 months ended 31 December 2024
Note Underlying Non-Underlying Statutory Underlying Non-Underlying Statutory
£ £ £ £ £ £
Revenue
Sale of services 3 14,119,540 - 14,119,540 14,741,924 316 14,742,240
University commission income 3 1,132,480 - 1,132,480 1,890,258 - 1,890,258
Total revenue 15,252,020 - 15,252,020 16,632,182 316 16,632,498
Cost of sales
Cost of services sold (7,516,385) (7,671) (7,524,056) (7,719,088) 16,034 (7,703,054)
University commission expense (1,157,119) 13,273 (1,143,846) (1,848,132) 20,180 (1,827,952)
Total cost of sales (8,673,504) 5,602 (8,667,902) (9,567,220) 36,214 (9,531,006)
Gross profit 6,578,516 5,602 6,584,118 7,064,962 36,530 7,101,492
Other income 4 173,178 - 173,178 136,017 - 136,017
Administrative expenses
Salaries and employee benefits (3,736,128) (37,007) (3,773,135) (3,894,221) (47,369) (3,941,590))
Depreciation and amortisation of assets (247,798) - (247,798) (317,431) 884 (316,547)
Impairment of goodwill 8 & 9 - (1,419,350) (1,419,350) - - -
Other operating expenses 6 (2,386,724) 63,341 (2,323,383) (2,764,877) (719) (2,765,596)
Total administrative expenses (6,370,650) (1,393,016) (7,763,666) (6,976,529) (47,204) (7,023,733)
Operating profit/(loss) 381,044 (1,387,414) (1,006,370) 224,450 (10,674) 213,776
Finance costs 5 (284,829) - (284,829) (355,133) (3,696) (358,830)
Profit/(loss) before tax 96,215 (1,387,414) (1,291,199) (130,683) (14,370) (145,054)
Income tax charge (5,240) - (5,240) - (6,077) (6,077)
Profit/(loss) for the Period being total comprehensive income/(expenses) 90,975 (1,387,414) (1,296,439) (130,684) (20,447) (151,131)
attributable to owners of the parent
Total comprehensive income/(expense) for the Period 90,975 (1,387,414) (1,296,439) (130,684) (20,447) (151,131)
Attributable to:
Equity holders of the parent 90,975 (1,387,414) (1,296,439) (130,684) (20,447) (151,131)
Profit/(loss) per share attributed to equity holders of the Company (in pence)
Basic 7 0.39 (5.68) (5.29) (0.53) (0.06) (0.59)
Diluted 7 0.39 (5.68) (5.29) (0.53) (0.06) (0.59)
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
Group Company
Note 9 months ended 30 September 2025 12 months ended 31 December 2024 9 months ended 30 September 2025 12 months ended 31 December 2024
£ £ £ £
TOTAL ASSETS
Non-current assets
Property, plant, and equipment 123,215 71,525 - -
Intangible assets 76,139 16,080 - -
Goodwill 9 - 1,419,350 - -
Investment in subsidiaries - - 107,155 1,419,350
Right-of-use assets 1,266,698 1,406,850 - -
Total non-current assets 1,466,052 2,913,805 107,155 1,419,350
Current assets
Inventories 36,016 19,624 - -
Trade receivables 373,847 791,743 - -
Other receivables and prepayments 2,766,460 1,565,947 161,313 131,736
Amounts due from subsidiaries - - 8,749 -
Cash and cash equivalents 1,893,357 1,391,605 6,153 4,733
Total current assets 5,069,680 3,768,920 176,215 136,469
Total assets 6,535,732 6,682,725 283,370 1,555,819
EQUITY AND LIABILITIES
Non-current liabilities
Term Loan 10 794,699 1,023,238 772,259 992,282
Warrants 10 290,622 353,963 290,622 353,963
Lease liabilities 10 1,242,290 1,532,549 - -
Total non-current liabilities 2,327,611 2,909,750 1,062,881 1,346,245
Current liabilities
Trade payables 730,234 1,462,756 99,199 88,310
Contract liabilities 3,424,907 3,080,256 - -
Other payables and accruals 4,066,899 1,899,193 327,919 292,755
Amounts due to the subsidiary - - 7,320,816 5,772,490
Lease liabilities 10 613,782 563,460 - -
Term Loan 10 556,445 670,763 542,813 653,516
Total current liabilities 9,392,267 7,676,428 8,290,747 6,807,071
Total liabilities 11,719,878 10,586,178 9,353,628 8,153,316
Equity attributable to equity holders of the Company
Group Company
Note 9 months ended 12 months ended 31 December 9 months ended 12 months ended 31 December
30 September 2025 2024 30 September 2025 2024
£ £ £ £
Share capital 11 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 30,624 17,141 30,624 17,141
Retained earnings (23,333,642) (22,042,443) (27,222,731) (24,736,487)
Translation reserve (2,977) - - -
Total equity (5,184,146) (3,903,453) (9,070,258) (6,597,497)
Total equity and liabilities 6,535,732 6,682,725 283,370 1,555,819
As permitted by Section 408 of the Companies Act 2006, the profit and loss
account of the parent company is not presented as part of these financial
statements. The parent company's loss for the financial Period amounted to
£3,177,280 (FY2024: £2,042,440).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Retained Translation reserve* Other
capital premium earnings reserves Total
£ £ £ £ £
Balance at 1 January 2024 11,323,899 6,797,950 (21,895,871) - 12,190 (3,761,832)
Total comprehensive expense for the year - - (151,131) - - (151,131)
Deferred tax - - 4,559 - - 4,559
Share option expense (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)
Total comprehensive expense for the Period - - (1,296,439) - - (1,296,439)
Foreign exchange translation differences - - - (2,977) - (2,977)
Share option expense (EMI options) - - - - 13,483 13,483
Balance at 30 September 2025 11,323,899 6,797,950 (23,338,882) (2,977) 30,624 (5,184,146)
*Translation reserve represents the foreign exchange differences arising from
the translation of transactions and balances between the newly established
Nepal entity, where accounting records are maintained in Nepalese Rupees
('NPR'), and the UK parent company, which reports in Pounds Sterling ('GBP').
CONSOLIDATED STATEMENT OF CASH FLOWS
9 months ended 12 months ended
30 September 2025
31 December 2024
£ £
Cash flows from operating activities
Loss after income tax from (1,296,439) (151,131)
Adjustments for:
Depreciation of tangible assets 245,142 328,067
Amortisation of intangible assets 2,656 -
Assets written off 5,047 -
Deferred tax adjustment 5,240 -
Impairment of goodwill 1,419,350 -
Fair value movements - warrants (63,341) (61,318)
Share-based payments 13,483 4,951
Net impairment (charge)/credit on trade receivables (273,572) 158,702
Increase in stocks (16,391) (11,459)
Taxation adjustment - 4,559
Finance cost 263,372 354,854
304,547 627,225
Changes in working capital
(Increase)/decrease in receivables (507,630) (1,152,026)
Increase in payables 1,861,000 694,716
Net cash flows generated in operating activities 1,657,917 169,915
Cash Flows from investing activities
Purchases of property, plant, and equipment (80,565) (27,597)
Investment in intangible assets (143,880) (16,080)
Net cash used in investing activities (224,445) (43,677)
Cash flows from financing activities
Repayment of lease liabilities (427,297) (297,739)
Additional loan - 22,336
Repayment of Term Loan (384,943) (515,003)
Interest payments (116,506) (140,726)
Net cash used in financing activities (928,746) (931,132)
Net change in cash and cash equivalents 504,729 (804,894)
Cash and cash equivalents at the beginning of the Period 1,391,605 2,196,499
Exchange losses on cash and cash equivalents (2,977) -
Cash and cash equivalents at the end of the Period 1,893,357 1,391,605
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. The specific principal activities of the
subsidiary companies are set out in note 13 to the financial statements. There
have been no significant changes in the nature of these activities during the
Period.
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 parent company's financial statements have also been prepared in
accordance with UK-adopted IFRS and 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
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 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 Group's
financial performance, position and trends. See note 11 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 profit for the 9 months to 30 September
2025 of £0.09m (FY2024: Underlying loss £0.13m).
Growth Lending (formerly BOOST&Co) is the Group's Term Loan provider.
The current debt in Malvern International Plc's accounts is £1.45m. Growth
Lending Limited, acting on behalf of IL2 (2018) Sarl, has again provided a
letter of comfort to provide ongoing financial support to the Company for
any short-term working capital requirements should it become necessary. It
is the present policy of Growth Lending to ensure that the Company has
adequate financial resources to meet its obligations and to continue as a
going concern for at least 12 months from the date of signing the financial
statements.
Before February 2026, the Company has not required any cash from Growth
Lending or shareholders in the past three years, highlighting the
Company's ability to cover its liabilities and historical debts with
operating cash flow. Current forecasts indicate that the Company will not
require further funding in the next 12 months.
Revenue growth continued in 2025, ending the 9-month period to September 2025
at circa 96% of the preceding 12 month period in 2024. Three new Pathway
partnerships were signed in 2025, and one post Period end in January
2026, with the first intake of students for two of these partnerships due in
September 2025, the third partnership in January 2026 and finally, the most
recent partnership signed will start in September 2026. In
all four partnerships, Malvern will collect cash directly from the
students. The visibility of University Pathways revenue in FY2026 gives
the Board confidence in Malvern's short and long-term prospects.
Despite recruitment restrictions in the Pakistan market for our Pathway
division due to concerns about visa refusals and student withdrawals, student
numbers have remained resilient compared with the prior academic year
(September 25 vs. September 2024), reflecting the significant investment in
this division. Our Junior summer camps continue to experience growth despite a
downturn in Chinese students across the industry, delivering £6.46m (FY2024:
£6.03m) in revenue to the Group. Pre-bookings for FY2026 summer camps are
very encouraging, and revenue growth is expected to follow.
Increased investment in the Pathways division and the start-up cost of the new
Pathway partnerships are expected to result in a loss in FY2026. Future profit
and cash flow projections indicate that the Company is expected to return to
profitability in FY2027. Significant improvements in cash flows are expected
to follow. The long-term 5 to 15-year Pathway contracts give the Directors
comfort to continue adopting the going concern basis in preparing the
financial statements.
To help the Company accelerate the growth of the Pathways division, reshape
the ELT division and to provide additional working capital to cover cash flow
seasonality, the Company is undertaking a fundraise. This fundraise
has generated £1.95m in new cash and will be finalised in March 2026.
UK and global macroeconomic factors continue to create some uncertainty in
the Group's forecasts. Despite this, significant revenue growth was
achieved in 2025 and is expected to continue through FY2026. The security of
the four new long-term Pathway contracts and the continued commitment from
the Group's lenders, in the form of a letter of support, provide the Group
with confidence in respect of future funding.
3. Revenue
i. Sale of services
9 months ended 12 months ended
30 September 2025
31 December 2024
£ £
Course fees 12,943,319 13,137,635
Application fees, registration and examination fees 91,035 122,320
Training fees, course materials and others 172,974 122,307
Accommodation fees 912,212 1,359,978
14,119,540 14,742,240
ii. University commission income
9 months ended 12 months ended
30 September 2025
31 December 2024
£ £
University commission income 1,132,480 1,890,258
University 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 £6,069,119 (FY2024: £7,058,850).
4. Other income
9 months ended 12 months ended
30 September 2025
31 December 2024
£ £
Rental income 133,060 137,069
R&D credits* - (19,182)
Interest income 23,110 16,674
Other income 17,008 1,456
173,178 136,017
*A R&D credit was refunded to HMRC during the Period.
5. Finance costs
9 months ended 12 months ended
30 September 2025
31 December 2024
£ £
Interest in leases (IFRS 16) 106,194 157,559
Interest in Term Loan 157,178 197,292
Other finance costs 21,457 3,979
284,829 358,830
6. Operating expenses
9 months ended 12 months ended
30 September 2025
31 December 2024
£ £
Auditor's remuneration:
- Fees payable to the Company's auditor for Statutory audit 99,522 67,345
- Fees payable to the Company's auditor for Statutory audit of - 55,100
subsidiary company
Consultant fees:
- Non-audit fees for taxation compliance fees - 8,500
Administrative and marketing expenses 1,963,004 2,360,413
Expected credit losses - trade receivables 324,198 335,556
Fair value movement - warrants (63,341) (61,318)
2,323,383 2,765,596
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
£1,296,439 (FY2024: Statutory loss of £151,131). The weighted average number
of ordinary shares in issue during the year is 24,442,400 shares (FY2024:
24,442,400 shares). The Statutory loss per share (in pence) before the income
tax charge attributed to shareholders is 5.29 (FY2024: statutory loss per
share of 0.59). Potential ordinary shares arising from share options and
warrants have not been included in the calculation of diluted loss per share
as they are anti-dilutive for the Period. Accordingly, diluted loss per share
equals basic loss per share.
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 1.
The following table includes details of non-Underlying items and reconciles
Statutory information to Underlying information:
Sale of services University commission income Revenue Direct costs Gross profit Operating profit Finance costs (Loss)/ profit before tax
9 months ended 30 September 2025 £ £ £ £ £ £ £ £
Underlying results 14,119,540 1,132,480 15,252,020 (8,673,504) 6,578,516 381,044 (284,829) 96,215
Malvern House Brighton((a)) - - - 5,602 5,602 5,602 - 5,602
Share-based payments((b)) - - - - - (13,483) - (13,483)
Warrants ((c)) - - - - - 63,341 - 63,341
Staff restructure payments((d)) - - - - - (23,524) - (23,524)
Impairment of goodwill((e)) - - - - - (1,419,350) - (1,419,350)
Statutory results 14,119,540 1,132,480 15,252,020 (8,667,902) 6,584,118 (1,006,370) (284,829) (1,291,199)
Sale of services University commission income Revenue Direct costs Gross profit Operating profit Finance costs (Loss)/ profit before tax
12 months ended 31 December 2024 £ £ £ £ £ £ £ £
Underlying results 14,741,924 1,890,258 16,632,182 (9,567,220) 7,064,962 224,450 (355,134) (130,684)
Malvern House Brighton((a)) 316 - 316 36,214 36,530 (24,931) (3,696) (28,627)
Share-based payments((b)) - - - - - (4,951) - (4,951)
Warrants((c)) - - - - - 61,318 - 61,318
Staff restructure payments((d)) - - - - - (42,110) - (42,110)
Statutory results 14,742,240 1,890,258 16,632,498 (9,531,006) 7,101,492 213,776 (358,830) (145,054)
a) Malvern House Brighton
Expenses related to the closure of the former Brighton school.
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 agreement entered into in August 2019, the Group
issued warrants over 2,072,623 shares to Growth Lending (formerly
BOOST&Co). The warrants are revalued at fair value annually, any movement
is expensed in the Consolidated Statement of Comprehensive Income. During the
Period, the warrants were transferred from Growth Lending to shareholder 8 KPG
Limited. The Group was not involved in this private transaction.
d) 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.
e) Impairment of goodwill
The management of the Group are reviewing the carrying value of goodwill to
ensure that it reflects the recoverable amount in accordance with applicable
accounting standards. This assessment is being undertaken to confirm that the
goodwill recognised continues to represent the expected future economic
benefits to the Group. During the Period, the assessment of the future
benefits indicated that the full value of goodwill was not recoverable and
should therefore be impaired.
9. Goodwill
9 months ended 12 months ended
30 September 2025
31 December 2024
£ £
Cost
Balance as at the beginning of the Period 1,419,350 1,419,350
Balance as at the end of the Period 1,419,350 1,419,350
Provision for impairment of goodwill
As at the beginning of the year - -
Impairment during the period (1,419,350) -
As at the end of the year (1,419,350) -
Net book value at the end of the year - -
Goodwill arose on the acquisition of Communicate English School Limited in
2018. Annual impairment reviews are undertaken each year using discounted
future cash flows to ensure the carrying value is recoverable.
The carrying value of £1,419,350 of this cash-generating unit is in excess of
the recoverable value and the value in use is negative, therefore it has been
fully impaired during the Period. The following assumptions were used to
calculate the amount recoverable:
· Discounted Cash Flow model produced modelling cash flow for
Communicate over five years.
· Terminal value applied to cashflow from year 6 onwards.
· Discount rate of 10% (FY2024: 13.75%) applied reflecting the WACC of
the Group.
· Dynamic growth rate applied, ranging from 4% (FY2024: 6%) in 2026, to
6% (FY2024: 3%) annual growth at the end of the five-year time horizon,
consistent with industry data.
10. Financial liabilities
Group Company
9 months ended 30 September 2025 12 months ended 31 December 2024 9 months ended 30 September 2025 12 months ended 31 December 2024
£ £ £ £
Non-current liabilities
Term Loan 794,699 1,023,238 772,259 992,282
Warrants 290,622 353,963 290,622 353,963
Lease liabilities 1,242,290 1,532,549 - -
Deferred tax liabilities 5,240 - - -
2,332,851 2,909,750 1,062,881 1,346,245
Current liabilities
Term Loan 556,445 670,763 542,813 653,515
Lease liabilities 613,782 563,460 - -
Trade and other payables 730,234 1,462,756 99,199 88,310
- - 7,320,816 -
Total 1,900,461 2,696,979 7,962,828 741,825
Term Loan
In August 2019, Malvern received a Term Loan from Growth Lending (formerly
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 include 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 30 September 2025 is £36,070 (FY2024: £48,203).
Warrants
As part of the Term Loan agreement entered into in August 2019
and subsequently amended in March 2022, the Group issued warrants entitling
the holder to subscribe for ordinary shares in the Company.
Following the 2022 amendment and the share consolidation completed in November
2022, the warrants have the following principal terms:
· Exercise prices of 10p and 10.6p per ordinary share;
· An exercise period commencing on the relevant issue date and
expiring on 4 March 2032;
The number of shares issuable under the warrants and the exercise price were
determined in accordance with contractual formulas based on a percentage of
the loan amount and the average market price of the Company's shares over a
specified period;
Due to:
· The cashless settlement feature, under which the number of shares to
be issued is determined by reference to a 28-day average market price at the
date of exercise; and
· The contingent issuance of additional warrants linked to the
outstanding debt facility;
the warrants do not meet the fixed-for-fixed criterion under IAS 32 and are
therefore classified as financial liabilities.
At the reporting date, the warrants were exercisable into 2,072,623 ordinary
shares based on the contractual formula. During the period, the warrants were
transferred from Growth Lending to shareholder 8 KPG Limited. The Group was
not involved in this private transaction.
The warrants are measured at fair value through profit or loss.
In addition, subject to the £2.6m debt facility remaining outstanding at
specified future dates, further warrants totaling up to 695,022 ordinary
shares may become issuable between 2026 and 2028.
At 30 September 2025, the fair value of the warrants was £290,622 (FY2024:
£353,963).
The following estimates were used to calculate this fair value:
· Annualised volatility of 60.8% (FY2024: 65%), which is consistent
with a lifetime and post COVID adjustment. This is a reduction from 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 47 months applied, reflecting the duration over which 8
KPG Limited could exercise these warrants.
· Risk free rate of 3.759% (FY2024: 4.014%), being the Yield on UK
five-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.
11. 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 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
Additions during the Period ― ― ― ― ―
At 30 September 2025 - 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. Share-based payments
are booked into equity under Other Reserves for £30,624 (FY2024: £17,141).
The Company has an Enterprise Management Incentive share option scheme for
certain Directors and employees.
12. Share-based payments and share options
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 following a
three-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 at 30 September 2025 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 275,000 50 15 3 12.30% 0.35% 0.34 5.02%
02/12/2020 275,000 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 207,500 60 22 3 10.45% 0.26% 0.38 1.10%
01/09/2022 207,500 110 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 remeasured at subsequent reporting dates.
The vesting probabilities presented are products of lognormal distribution
modelling over a three-year period, based on the scaled mean and standard
deviation from a prior 365-day period, to determine the likelihood of the
vesting condition being reached.
The Group has used the Monte Carlo valuation framework for all share options
awarded in 2025.
The inputs into the Monte Carlo model as at 30 September 2025 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 3 50% 2.93 12
30/11/2022 192,500 110 10 3 50% 1.34 12
15/11/2023 143,750 115 23.5 3 70% 10.4 24.5
15/11/2023 143,750 150 23.5 3 70% 10.4 24.5
11/10/2024 122,500 115 18 3 66% 6.6 18
11/10/2024 122,500 150 18 3 66% 5.6 18
30/06/2025 75,000 115 20 5 61% 4.6 16.5
30/06/2025 75,000 150 20 5 61% 3.6 16.5
For options with hurdles, early exercise is assumed to take place as soon as
the 40-day hurdle requirement is triggered after the three-year vesting
period. The Monte Carlo simulation uses 50,000 iterations to enhance the
accuracy of the predicted outcome.
Nine months ended 30 September 2025
Number of options Weighted average strike price
Outstanding at 1 January 2025 2,246,934 19.70p
Granted during the Period 150,000 20p
Exercised during the Period - -
Forfeited during the Period (244,434) -
Outstanding at 31 December 2025 2,152,500 19.94p
Exercisable - -
Of the options outstanding at 30 September 2025,670,000 (FY2024: 670,000)
options have an exercise price of 15 pence, 415,000 (FY2024: 415,000) options
have an exercise price of 22 pence, 385,000 (FY2024: 385,000) options have an
exercise price of 10 pence, 287,500 (FY2024: 287,500) options have an exercise
price of 23.5 pence, 245,000 (FY2024: 489,434) options have an exercise price
of 18 pence and 150,000 options have an exercise price of 20 pence (FY2024:
nil).
The aggregate charge for share options recognised in the Group financial
statements in the Period was £13,483 (FY2024: £4,951).
13. Subsequent events
Subsequent to the reporting date of 30 September 2025, the following
non-adjusting events have occurred:
Pathway partnership agreement
In January 2026, the Company entered into a 15-year Pathway partnership
agreement with London Metropolitan University. The first student intake under
this agreement is expected in September 2026. As this agreement was entered
into after the reporting date, no adjustment has been made to the financial
statements.
Closure of Adult ELT schools
In February 2026, the Company announced the closure of its Adult English
Language Teaching schools in Manchester and London. Students have been
transferred to a competitor via an asset purchase agreement in February 2026.
The Company will also sublease the Manchester building to the competitor from
the end of February 2026. The London building will be retained by the Company
as there are plans to use the space for higher education provision. As the
decision was made after the reporting date, this represents a non-adjusting
event.
Fundraising
In February 2026, the Company initiated a fundraising expected to raise
approximately £1.95m in net proceeds. The fundraising was completed in March
2026. As this transaction occurred after the reporting date, no adjustment has
been made to the financial statements.
The annual report and accounts together with the notice of AGM to be held on
31 March 2026, are expected to be uploaded to the Company's website and posted
to shareholders in due course.
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