Malvern losses narrow amid 'significant' pent-up demand

The AIM-traded firm said its operating profit before depreciation, amortisation and finance charges totalled £9,000 for the six months ended 30 June, swinging from a loss of £53,000 in the first half of 2020.

Its loss before tax on continuing operations narrowed to £0.35m for the period, from £0.44m, making for losses per share on continuing activities of 0.02p, compared to 0.16p in the prior comparative period.

During the half-year, Malvern raised a gross £1.7m through a placing and subscription, making for cash at period end of £1.28m, up from £0.1m at the end of December and £0.06m on 30 June 2020.

On the operational front, Malvern said its English Language Training (ELT) schools were currently operating at about 20% of pre-pandemic levels, in line with its expectations.

Provisional bookings for ELT were described as “encouraging”, demonstrating pent-up demand in the area, although many student start dates remained subject to the easing of travel restrictions.

University Pathways deposits for the 2021-2022 academic year were currently ahead of the previous year, but the company said that with the current restrictions in place for international travel, there had been a “significant level” of deferrals to a January 2022 start.

The group's NCUK offering, launched in the first half, saw student applications currently being processed for a September term start, with the first deposits being received.

Malvern said its sales and marketing teams were focused on building the brand and reputation of that area of the business.

The group received a “significant number” of bookings for the 2021 summer camps prior to being put on hold, which it said pointed to a strong demand for the product.

Its expectation was that the demand would return for summer 2022, as border restrictions are relaxed.

Finally, the company noted the announcement that the Hungarian government's language learning scholarship programme for Hungarian students, ‘Tempus Public Foundation’, would open again for summer 2022, with Malvern expecting to accept bookings for summer 2022 from December onwards.

“We have continued to provide tuition to students throughout the period through face-to-face, online and blended learning,” said chief executive officer Richard Mace.

“While the pandemic has continued to disrupt bookings and the timing of start dates, we are pleased that we have managed to keep our ELT schools open and that provisional bookings for both ELT and University Pathways are rebuilding.”

Mace said there was a “clear backlog” of demand for all of the firm’s education services, with the board expecting a “robust return” once restrictions are eased and in-class teaching resumes.

“In the meantime, we continue to strengthen our sales and marketing teams and ensure the quality of our education services remains high.”

At 0940 BST, shares in Malvern International were down 3.85% at 0.25p.