Malvern International expects swing to a loss despite revenue increase

(Alliance News) - Malvern International PLC on Thursday said increases in employers' national ...

Alliance News 7 February, 2025 | 1:39PM
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(Alliance News) - Malvern International PLC on Thursday said increases in employers' national insurance contributions would place pressure on its margins as it said it has sufficient capital to meet its current obligations.

The London-based learning and skills development company expects to report a 38% increase in revenue to around GBP14.74 million for 2024 from GBP10.65 million in 2023.

Despite the uptick in revenue, the firm expects to swing to an underlying pretax loss of GBP120,000 from GBP150,000 in profit following a GBP530,000 forward investment in staffing, marketing legal fees and admissions.

This firm noted that this was in line with its strategy of securing new higher education partners.

It also anticipates a weaker than expected performance from Adult English Language teaching.

Its cash balance at December 31 was down 37% to GBP1.39 million from GBP2.20 million, with it noting that GBP900,000 is payable by the firm for summer accommodation costs due to late invoicing.

It added that it continues to pay down its Boost&Co term loan which was down 19% at the year-end to GBP1.82 million from GBP2.24 million. As such, net debt for the company at December 31, said Malvern, fell 8.4% to GBP2.40 million from GBP2.62 million.

Malvern said its board believes it has sufficient working capital to meet all current obligations.

On current trading, it noted that University Pathways "continues to grow" with January intake up 57% to 500 students from 319 in January 2023 and with the current pipeline for Juniors ELT "very positive".

However, it noted that despite investments in its sales function to up both student numbers and market share, "Adult ELT continues to face tough competition and a high fixed-cost base".

It added that the increase in employers' national insurance contributions from April will further impact operating margins in the business.

Shares in Malvern International were down 5.4% at 20.33p on Friday afternoon in London.

Chair Mark Elliott commented: "Last year's forward investments in key individuals and sales support have been rewarded for both Pathways and Juniors. The board is assessing the group's fixed-cost base and the utilisation of year-round centres and staff for the ELT business. While we believe there is potential for moderate growth with Adult ELT, we must make adjustments to improve centre performance and ensure consistent profit levels.

"Despite this setback, I am pleased with the progress being made by the management team in executing the group strategy".

By Christopher Ward, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Malvern International PLC 21.90 GBX 1.86 -

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