Malvern reports strong first half, flags possible second-half loss

The AIM-traded company said its operating profit, excluding depreciation, amortisation, and finance charges, came in at £0.58m for the six months ended 30 June, swinging from a loss of £0.34m a year earlier.

There was also a turnaround in profit before tax from operating activities to £0.22m from a loss of £0.68m year-on-year.

That upturn was attributed to strategic investments in the firm’s sales infrastructure and extensive recruitment efforts in vital feeder markets, particularly in India and Nepal.

Earnings per share from operating activities were positive, registering at 0.92p, improving from a loss of 3.16p in the first six months of 2022.

As of 30 June, Malvern International reported cash reserves of £2.12m, an increase from £1.18m at the end of 2022 and £0.88m at the same point last year.

The company's debt with Boost&Co remained unchanged at £2.6m.

On the operational front, Malvern said University Pathways - one of its flagship programmes - saw a massive 247% increase in student enrolment.

Numbers surged to 500 students in the first half, up from just 144 students during the same period in the prior year.

Revenues from the English Language Training (ELT) centres progressed commendably, registering growth of 66% year-on-year.

Junior summer camps, which were reintroduced over the summer, reported record attendance in terms of the number of camps and student enrolments.

Advance payments for the camps largely accounted for the increased cash reserves as of 30 June.

“We are extremely pleased with our performance in the first half, which has been driven by a combination of a strong return in the international study market and our strategy to invest in our sales and marketing function over the last three years,” said chief executive officer Richard Mace.

“The momentum has continued in the second half as we welcomed the new cohort of 450 University Pathways Students in September, and we experienced record performances from our ELT and Junior Summer camps in July and August.

“We are also investing in highly experienced people in the Pathways sector to continue to expand our reach whilst improving our systems of control and reporting.”

As a result of that investment, Mace said the company was expecting break-even or a slight loss for the second half.

“Our forward bookings and revenue visibility in the second half and for the start of 2024 gives us confidence in Malvern's near and longer-term prospects.

“We expect to see growth in all divisions in 2024.”

At 1229 BST, shares in Malvern International were down 4.08% at 23.5p.

Reporting by Josh White for Sharecast.com.