Last checked at 18 Aug 2017 08:10
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 | +65 6412 0733 +65 8386 0155 | |
WH Ireland Limited (NOMAD) | Nominated Adviser & Broker | |
Mike Coe | +44 (0) 117 945 3470 | |
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.