Half-year Report

RNS Number : 3833O

Malvern International PLC

18 August 2017

 

AIM: MLVN

         18 August 2017

Malvern International PLC

 ("MLVN" or the "Company" and together with its subsidiaries, the" Group")

Half year results for the six months ended 30 June 2017

Key Points

·     Revenues on continuing activities of £1.65m (2016: £2.07m)

·     Operating loss of £0.39m (2016: loss of £0.46m)

·     Loss before tax of £0.39m (2016: loss of £0.46m)

·     Loss after tax from continuing activities of £0.39m (2016: loss of £0.48m)

·     Loss per share on continuing activities of 0.39p (2016: 0.77p)

·     London has started to recover from the severe losses it has incurred in previous years to a small loss for the first half.

·     Singapore received its EduTrust certification from the Committee of Private Education in July 2017 and initiatives to capitalize on the re-certification have already been implemented.

·     Malaysia, while down in the first-half due to correction and improvement in quality assurance and international student issues, is now showing signs of improvement with a better outlook expected for the second half of this financial year.

·     In the first half of 2017, loans amounting to £118,000 from a major shareholder of the Group were converted into 2,360,000 new ordinary shares at a conversion price of 5p per share.  

Gopinath Pillai, Chairman, stated,

"Two positive developments which have taken place in the Malvern Group in the first half of the year gives me reason to be optimistic.  First, London which had been incurring heavy losses is showing strong signs of a recovery which is likely to become more obvious in the second half of the year. Second, Singapore which had lost its EduTrust license four years ago has now been granted a new license by the Committee for Private Education in Singapore.  I expect this to have a significant positive impact in the coming months on Singapore's operations going forward."

Enquiries:

Malvern International PLC		www. malverninternational.com
Haider Sithawalla-CEO Sam Malafeh          -Deputy CEO		[phone]                                  [phone]
WH Ireland Limited (NOMAD)		Nominated Adviser & Broker
Mike Coe		[phone]

CHAIRMAN'S STATEMENT

Two positive developments which have taken place in the Malvern Group in the first half of the year gives me reason to be optimistic.  First, London which had been incurring heavy losses is showing strong signs of a recovery which is likely to become more obvious in the second half of the year. Second, Singapore which had lost its EduTrust license four years ago has now been granted a new license by the Committee for Private Education in Singapore.  I expect this to have a significant positive impact in the coming months on Singapore's operations going forward.

A brief review of the operations of London, Singapore and Malaysia is given below:

United Kingdom

·      London's revenue has started to grow and new registrations indicate more significant growth in the second half of the year. For the first half, revenue was at £770,000 (2016: £658,000) with an operating loss at £43,000(2016: £133,000).  

South East Asia

·      Singapore reported a small loss of £51,000 (2016: £96,000)  on reported revenue of £109,000 (2016: £124,000) due to the smaller operational size but the new EduTrust license obtained in July 2017 will improve the fortunes of Singapore.  We can now bring in foreign students to school in Singapore which has not been possible for the last four years.  

·      Malaysia struggled in the first half as we continued with the correction in quality assurance and international student issues but the second half's outlook is positive as we resolve all outstanding issues relating to the school. Because of these changes, better quality reports are expected from the ministry in the coming months. New programs and courses have also been implemented.  Revenue reported in Malaysia dropped from the £1,276,000 as reported in 2016 to  £772,000 in the first half of 2017.

Financial Results 

The Group's revenues on continuing activities for the six months in 2017 declined by 19% to £1.7m (2016: £2.1m) , mainly due to the decrease in revenue in Malaysia. However, the Group's efforts to better manage its operating costs and offer new courses with better margins have resulted in the Group's loss before tax for the six months from continuing operations decreasing to £0.39m (2016: £0.46m).   

No impairment of intangible assets was considered necessary for the first six month as we had already undertaken an extensive review and impairment charge during 2016 and we are confident that the plans and strategies we have in place for the second half of 2017 and 2018 will drive the Group's business positively.

The basic and diluted loss per share on the continuing business was (0.39p) (2016:  0.77p). 

Net cash at the end of the year saw a slight drop at £0.36m (2016: £0.45m). 

Outlook

The outlook remains positive for the Group as the initiatives we have taken and implemented should provide for a more stable second half with real positive results being generated in 2018.    Needless to say, shareholders' support is a key resource of the organisation.   I thank all the shareholders for their patience and continued support.

Gopinath Pillai

Chairman

UNAUDITED CONSOLIDATED INCOME STATEMENT

		Six months to 30 June 2017	Six months to 30 June 2016	Twelve months to 31 December 2016
		£'000	£'000	£'000
		Unaudited	Unaudited	Audited
			(restated)	(restated)
Revenues
Sales of services and other revenue		1,652	2,067	3,993
Cost of services sold & operating expenses		(2,046)	(2,525)	(5,448)
Operating (loss) / profit		(394)	(458)	(1,455)
(Loss) / profit from operations		(394)	(458)	(1,455)
Share of results of associated companies and joint venture		-	-	50
Finance costs		(1)	(2)	62
(Loss) / profit before taxation		(395)	(460)	(1,343)
Income tax credit / (charge)		-	(23)	(30)
(Loss) / profit for the period / year from continuing activities		(395)	(483)	(1,373)
(Loss) / profit for the period / year from discontinued activities		-	32	574
(Loss) / profit for the period / year		(395)	(451)	(799)
Minority interests		-	(15)	-
(Loss) / profit attributable to equity holders		(395)	(466)	(799)
(Loss) / earnings per share on total activities		Pence	Pence	Pence
Basic		(0.39)	(0.72)	(1.07)
Diluted		(0.39)	(0.72)	(1.07)
(Loss) / earnings per share on continuing activities		Pence	Pence	Pence
Basic		(0.39)	(0.77)	(1.84)
Diluted		(0.39)	(0.77)	(1.84)
(Loss) / earnings per share on discontinued activities		Pence	Pence	Pence
Basic		-	0.05	0.77
Diluted		-	0.05	0.77

UNAUDITED STATEMENT OF FINANCIAL POSITION

	As at 30 June 2017	As at 30 June 2016	As at 31 December 2016
	£'000	£'000	£'000
	Unaudited	Unaudited	Audited
Fixed assets
Intangible assets	2,146	2,452	2,147
Tangible assets	183	312	189
Investment in joint venture	-	90	-
	2,329	2,854	2,336
Current assets
Inventory	3	7	3
Debtors	1,416	1,875	1,141
Cash at bank and in hand	360	454	117
	1,779	2,336	1,261
Total assets	4,108	5,190	3,597
Creditors
Amounts falling due within one year	(2,703)	(4,023)	(2,462)
Net current liabilities	(924)	(1,687)	(1,201)
Non-current liabilities
Finance lease	(23)	(8)	(24)
Deferred taxation	-	-	-
	(23)	(8)	(24)
Total liabilities	(2,726)	(4,031)	(2,486)
Equity attributable to equity holders of the Company
Share capital	7,538	6,217	6,824
Share premium	896	896	896
Reserves	(7,052)	(5,886)	(6,609)
	1,382	1,227	1,111
Minority interest in equity	-	(68)	-
	1,382	1,159	1,111
Total equity and liabilities	4,108	5,190	3,597

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1	Share Capital	Share Premium	Retained Earnings	Translation Reserve	Capital Reserve	Total other reserves	Attributable To Equity Holders of the Company
2	£	£	£	£	£	£	£
Balance at 1 January 2017	6,823,838	896,111	(7,785,081)	1,005,522	170,560	(6,608,999)	1,110,950
(Loss) for the period			(393,906)			(393,906)	(393,906)
Total other comprehensive income				(48,906)		(48,906)	(48,906)
Total comprehensive income for the period			(393,906)	(48,906)		(442,812)	(442,812)
New shares	714,001						714,001
Total transaction with owners	714,001						714,001
Balance at 30 June 2017	7,537,839	896,111	(8,178,987)	956,616	170,560	(7,051,811)	1,382,139

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

		Six months to 30 June 2017	Six months to 30 June 2016	Twelve months to 31 December 2016
		£'000	£'000	£'000
		Unaudited	Unaudited	Audited
Cash Flows from operating activities
(Loss) / profit before income tax from continuing activities		(395)	(460)	(1,343)
(Loss) / profit before income tax from discontinued activities		-	-	574
Adjustments for:
Depreciation & amortisation		34	126	236
Loss on disposal of plant and equipment		-	(15)	42
Impairment of intangible assets		-	-	150
Interest paid		(1)	3	62
Non cash elements of profit on discontinued activities		-	-	(308)
Share of results of associated companies and joint venture		-	-	1
		(362)	(346)	(586)
Changes in working capital
(Increase) / decrease in debtors		(203)	(431)	120
(Increase) / decrease in creditors		359	(84)	(816)
(Increase) / decrease in inventories		-	2	3
(Increase) / decrease in related parties		124	530	684
Cash flows from operating activities		(82)	(329)	(595)
Taxation
Taxes recovered / (paid)		(39)	15	7
Net cash used in operating activities		(121)	(314)	(588)
Cash flows from investing activities
Purchase of property, plant and equipment		(29)	-	(46)
Purchase of intangible fixed assets		-	-	-
		(29)	-	(46)
Cash flows from financing activities
Dividend paid to shareholders-unclaimed		-	-	-
(Decrease) / increase in finance lease liabilities		(2)	(9)	(10)
Interest Paid		1	(2)	(62)
New Share Issue		440	-	429
Repayment of term loan		-	(3)	-
		439	(14)	357
Effect of foreign exchange rate changes on consolidation		(46)	366	(22)
Net increase in cash and cash equivalents		243	38	(299)
Cash and cash equivalents at beginning of period / year		117	416	416
Cash and cash equivalents at end of period / year		360	454	117

NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED

1.    General information

Malvern International plc (the "Company") is a public limited liability company incorporated in England and Wales on 8 July 2004. The Company was admitted to AIM on 10 December 2004. Its registered office is Witan Gate House, 500-600 Witan Gate West, Milton Keynes MK9 1SH and its principal place of business is in Singapore. The registration number of the Company is 05174452.

The principal activities of the Company are that of investment holding and provision of educational consultancy services.  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 period

2.    Adoption of new and revised International Financial Reporting Standards

No new IFRS standards, amendments or interpretations became effective in the six months to 30 June 2016 which had a material effect on this interim consolidated financial information.

3.    Significant accounting policies

Basis of preparation

These Financial Statements of the Group and Company are prepared on a going concern basis, under the historical cost convention (with the exception of share based payments and goodwill) and in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) and adopted by the European Union, in accordance with the Companies Act 2006. The Parent Company's Financial Statements have also been prepared in accordance with 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 and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates

4.    Dividend

No interim dividend for this financial year is proposed.

5.    (Loss)/ earnings per share

The basic (loss)/earnings per share is calculated by dividing the (loss)/profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the relevant period. The weighted average number of shares in issue during the period was 102,233,393 (2016: 64,450,963).

The diluted (loss)/earnings per share is calculated by dividing the (loss)/profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the relevant period diluted for the effect of share options and warrants in existence at the relevant period. The weighted average number of shares in issue diluted for the effect of share options and warrants in existence during the period was 102,233,393 (2016: 64,450,963).

6.    Share capital

On the 7 February 2017, it was announced that the Company had agreed with a certain shareholder that loans from them amounting in aggregate to £38,000 would be converted into ordinary shares in the Company at a value of 5 pence per share.

On the 4 April 2017, it was announced that the Company had agreed with a certain shareholder that loans from them amounting in aggregate to £80,000 would be converted into ordinary shares in the Company at a value of 5 pence per share.

In 2017, a total number of 14,280,000 Ordinary Shares were issued at 5p each increasing the total number of Ordinary Shares held in the Company to 106,557,983 (previously: 92,277,983).

7.    Subsequent events

There are none to report.

 

END

 

 

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