This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

25 August 2022

MALVERN INTERNATIONAL PLC

("Malvern", the "Company" or the "Group")

Trading update

Capitalising on strategic investment as sector recovers

Malvern International plc (AIM: MLVN), the global learning and skills development partner, is pleased to provide a trading update for the six months ended 30 June 2022 ("H1"), ahead of announcing its interim results in the first half of September 2022.

Malvern has seen a significant improvement in student numbers and business pipeline in H1 with revenues around 60% ahead of H1 2021.

The Company is seeing the benefits of its strategic investment over the last two years in its brand, sales and marketing, management team, processes, partnerships, products and student offering. The Board believes Malvern is in a strong position to grow its market share for the remainder of 2022 and beyond. Pre-booked and delivered revenues for H2 2022 are showing a three-fold increase on H2 2021 and are ahead of like-for-like pre-pandemic levels of H2 2019. Pre-bookings indicate that the Group can expect further growth in revenues in 2023.

Management continue to maintain strong cost controls as the Group recovers from the COVID-19 period and continues to have the option of BOOST&CO's ("BOOST") support for its working capital requirements as required.

University Pathways

University Pathways has seen a significant increase in student numbers for September 2022 and recruitment for January 2023 is also looking strong. Around 230 new starters are joining our International Study Centre at The University of East London ("UEL") in September 2022, a significant increase on the 46 new starters in September 2021. Approximately one third of this income will be recognised this year and the remaining two thirds will be recognised in H1 2023.

The increase is the result of the expansion of the international sales team, improved processes to manage and convert the student recruitment pipeline, and significant recruitment travel to key feeder markets including joint marketing trips to India and Nepal with UEL.

These markets are expected to grow further and, following the recent reintroduction of priority and super priority visas in India, the Group is currently projecting to have over double the number of pathway students studying in our International Study Centres in 2022/23 compared to the previous academic year.

Our NCUK centre is expected to run with a cohort of around fifteen students in September 2022 with more joining in January 2023. The Board expect these numbers to build as the Group develops a brand presence in the key regions of China, Nigeria and South East Asia.

English language teaching ("ELT")

The ELT industry has bounced back after international borders reopened following two years of travel restrictions. This is evidenced through revenues across the Group's three ELT centres during the Company's busiest summer period, coming in slightly ahead of the pre-pandemic level in 2019.

The MENA market was the first big market to return. This was helped by the Government's announcement in early May 2022 that Saudi Arabia and Bahrain nationals can apply to travel to the UK for tourism, business, study or medical treatment for up to six months with an electronic visa waiver from 1 June 2022. The initiative has made it easier for visitors from the Gulf to enter the UK and is intended to deepen the UK's partnership with these countries, enhance diplomatic ties and economic prosperity.

Looking forward, the Board is confident for the outlook for ELT in 2023 and beyond. Malvern is currently working with the biggest agencies in Brazil, Saudi Arabia, Kuwait and Italy, and the pipeline of bookings is strong. The focus for the remainder of 2022 is to capitalise on the Group's momentum, to continue to foster good relations and build Malvern's agent network across other key regions. 

Juniors

As expected the Italian funded INPS programmes went ahead in July and August 2022. The Company delivered programmes to 976 students, generating revenues of c.£1.35m after two years of no activity.

The team had a successful British Council inspection in July 2022. The feedback so far has been excellent with the formal report due in September 2022. The next full inspection is due in 2026.

The Board feels that this is a great result and together with a large increase in the number of agents working on behalf of the Group, giving it a solid base to build on for 2023 and beyond. 

China

China is the biggest international student market to the UK for Higher Education provision and junior summer camps. In May 2022, Malvern entered a five-year collaborative partnership with UEL to be the preferred supplier of student recruitment services in mainland China. The aim of this partnership is to "rapidly increase" the volume of Chinese students enrolling on programmes at UEL's three London campuses. Launch events have been delayed due to strict COVID-19 lockdowns and travel restrictions. Nonetheless, we are making good progress and Malvern now has two sales staff based in China building the agent network, and the Group's marketing and Chinese social media activities are being supported by a Mandarin marketing officer based in the Company's London centre. The recruitment of a head of sales in China is planned in H2 2022.

Malvern's first students are expected in January 2023 as part of the 2022/23 cohort, with growth projected for September 2023 after a full student recruitment campaign.

Cash and working capital

Cost control and cash flow management continues to be a focus for the Group during this period of recovery. Following our debt restructure in March 2022, the Board remains in regular contact with BOOST, the fund manager acting on behalf of the Company's debtholder. BOOST has reiterated its commitment to provide ongoing financial support to Malvern for its short-term working capital requirements should it become necessary.

Richard Mace, Chief Executive Officer, said: "The strategic initiatives we have taken throughout the pandemic to navigate the crisis, manage risk and improve the business are now bearing fruit.

"It is pleasing to see confidence return to the international study market now that travel restrictions to the UK have been lifted. There remains strong demand for our education products, as seen with international students travelling to the UK in numbers again.

"I would like to thank the Malvern  team and BOOST for their support and hard work as Malvern continues to recover. For these reasons, and with a significantly stronger and experienced management team now in place, we remain positive about the outlook for the Company."

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 - on and off-campus university pathway programmes helping students progress to a range of universities, as well as in-sessional and pre-sessional courses.

Malvern House Schools - British Council accredited English Language Training at English UK registered schools in London, Brighton and Manchester.

Malvern Online Academy - British Council accredited online school, offering supported tuition to students from around the world in English language, higher education, and professional education.

Juniors and summer camps - fully-immersive summer residential English language camps and bespoke group programmes for 13 to 18 year olds.

For further investor information go to www.malverninternational.com