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MALVERN
INTERNATIONAL PLC
Annual Report
2023
Visit our website for further information
https://www.malverninternational.com
Contents
Overview
Highlights
Strategic Report
Chairman’s Statement
At a Glance
Business Model
Our Markets
Our Strategy
Operating Review
Key Performance Indicators
Financial Review
Risk Management and Principal Risks
Stakeholder Engagement:
Directors’ Section 172(1) Statement
Corporate Governance
Board of Directors and
Executive Management Team
Chairman’s Corporate Governance
Statement
Directors’ Report
Nomination and Remuneration
Committee Report
Audit and Risk Committee Report
Financial Statements
Independent Auditor’s Report to the
Members of Malvern International Plc
Consolidated Statement of
Comprehensive Income
Consolidated and Company Statement
of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
1
3
4
6
8
10
12
14
16
17
19
22
26
29
32
35
37
42
43
45
46
47
48
49
HIGHLIGHTS
For the year ended 31 December 2023
1
Malvern International is a learning and language skills development partner.
Courses are delivered at schools in London and Manchester, and at partner
campuses.
“
Malvern’s robust performance in 2023 surpassed the wider market, which continues to recover toward 2019 levels. We
achieved year-on-year revenue growth across all three divisions, with exceptional performances from University Pathways
and strong growth in Juniors. These results have enabled us to make strategic investments in our people and systems, which
are crucial as we prepare for the next stage of development.
Forward bookings and revenue visibility for 2024 and into 2025 are building. Additionally, we are diversifying our business mix
by introducing new high-end academic programmes and offering out-of-season language programmes.
Over the past year, we have assembled a high-performance leadership team, adding momentum to the business and
supporting our growth aspirations. With a clear strategic direction, we are well-positioned for continued success.”
Richard Mace, Chief Executive Officer
Highlights
Pathway / higher education revenue (£m)
• Significant turnaround in the business from Underlying* loss of £1.07m in 2022 to a profit of £0.15m
• Underlying revenue, excluding agent commission, grew 86.8% to £10.65m (2022: £5.70m). Agent commission which passes
4
9
.
0
directly to the Group’s agents was £0.94m (2022: £0.18m)
• Revenues increased in all areas of the Group to a total of £12.26m, with strongest performances from Higher Education
and Juniors
• Strong revenue growth resulted in an Underlying operating profit of £0.51m (2022 loss: £0.79m)
8
1
0
.
• Underlying profit per share was 0.60 pence (2022 Underlying loss: 4.88 pence)
• The Statutory loss for the year was £0.16m (2022 loss: £1.08m)
• Initiated the repayment of Company debt in 2023, which stood at £2.24m at year end (2022: £2.60m)
• Assembled a high-performance team and continued investment in people, sales and marketing, and finance functions
.
2
8
1
1
8
.
3
to support growth aspirations
Pathway / higher education revenue (£m)
PATHWAYS/HIGHER EDUCATION
Pathway / higher education revenue (£m)
REVENUE (£m)
ELT REVENUE (£m)
ELT revenue (£m)
4
9
.
0
1
8
.
3
8
1
.
0
2
8
.
1
4
9
.
0
1
8
3
.
8
1
.
0
2
8
.
1
2022
2023
2022
2023
7
6
.
0
4
6
.
0
2
5
.
2
1
1
3
.
2022
2023
2022
2023
Sale of services
Agents’ commission
JUNIORS REVENUE (£m)
ELT revenue (£m)
Juniors revenue (£m)
7
6
.
0
4
6
.
0
5
3
.
1
2
5
.
2
2
7
3
.
1
1
3
.
2022
2022
2023
2023
Sale of services
Agents’ commission
Sale of services
Agents’ commission
Sale of services
Brighton revenue
Sale of services
Brighton revenue
ELT revenue (£m)
7
6
.
0
4
6
.
0
2
5
.
2
1
1
.
3
2022
2023
Sale of services
Brighton revenue
*
Underlying numbers exclude the results of the closed Brighton school, the charge for warrants and share based payments and the write-back of an historical loan.
See note 11 for a reconciliation.
Loss for the year
2021
1.59
2022
1.08
Loss per share*
2021
8.49 pence
2022
4.95 pence
Juniors revenue (£m)
Juniors revenue (£m)
5
3
.
1
2
7
.
3
2022
2023
5
3
.
1
2
7
.
3
2022
2023
Loss for the year
Loss for the year
2021
1.59
2021
1.59
2022
1.08
2022
1.08
Loss per share*
Loss per share*
2021
8.49 pence
2021
8.49 pence
2022
4.95 pence
2022
4.95 pence
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 2 Malvern International Plc Annual Report and Accounts 2023
STRATEGIC
REPORT
CHAIRMAN’S STATEMENT
3
“I would like to express my gratitude to the Malvern
team for guiding the business from a £1.07m
Underlying loss in 2022 to a Underlying profit of £0.15m
in 2023, and significantly reducing the Statutory loss
of £1.08m in 2022 to £0.16m loss in 2023.”
Mark Elliott, Chairman
This turnaround underscores the considerable effort made
to bolster management, expand the sales and marketing
team, enhance the quality of our education and student
support, and establish robust systems to facilitate the
growth in student numbers.
It is promising to note that we initiated the repayment of
Company debt in 2023, which stood at £2.24m at year end
(2022: £2.60m). While we are making positive progress, the
debt remains a substantial burden on the business, making it
a primary objective for us to expedite its repayment. Doing
so will both improve cash flow and boost profits.
Thanks to the momentum in our businesses and the support
for our growth aspirations, we have brought two highly
successful and seasoned members onto our Executive
Management Team. Stephen Harvey and Matt Hird, both
distinguished leaders in their fields, join us with strong track
records in developing university partnerships and English
language businesses respectively.
Our international study centre at UEL has now become
one of the larger Pathways centres in the UK based on
student numbers, following an outstanding intake for
2023/24. While bookings for the 2024/25 academic year
are anticipated to soften slightly, they are progressing as
planned. Additionally, we are continuing discussions for a
longer-term arrangement with the university.
The deep sector knowledge brought by our recent
appointments is aiding our negotiations with several
universities. As a result, we are confident in our capacity
to secure new Pathways contracts, which are crucial for
achieving more consistent financial performance in the
future.
The Juniors division is going from strength to strength. To
grow this further, we are targeting the Chinese market to
provide immersive language and cultural camps. We plan
to offer winter programmes to coincide with the Chinese
New Year and Latin American holiday season, as well
as introducing high-end Easter academic programmes.
This strategic approach will collectively reduce our
dependency on the summer peak season.
The Board sees potential for significant growth at Malvern.
In 2023, we took steps to reinforce our back office and
accounting systems, expanding our administrative team in
Nepal. This enhancement will facilitate the administration
of students as numbers increase, while maintaining robust
financial controls. We will be investing further in our sales,
marketing, business development and accreditations to
build profitable growth.
The Board notes the recent changes to the QCA code and
is taking steps to ensure Malvern complies with the updated
principles that come into force next year. In the meantime,
we are embracing early adoption by voting on re-election
of all Directors and on Directors’ remuneration at this year’s
Annual General Meeting.
Currently, our student numbers and early bookings give us
encouragement on our performance for 2024. With our
numbers going in the right direction and the momentum in
the business, we expect to have the resources needed to
continue building a significant business.
Mark Elliott
Chairman
9 April 2024
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 4 Malvern International Plc Annual Report and Accounts 2023
AT A GLANCE
Malvern International’s purpose is to provide,
with our partners, students from around the world
with opportunities to reach their full potential via
access to transformational learning, teaching
and support.
We offer 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.
*
*
*
*
3
Study locations
* Since foundation.
Manchester
Manchester
Brighton
Brighton
Singapore
Singapore
Online
Online
Malvern has undergone a great deal of change in
recent years, focusing and growing the UK operations.
The Company has emerged stronger than ever, with
a clear strategy, a highly experienced Executive
Management Team (“EMT”), sales and marketing
function, agent network and improved governance
structures.
2018/19
Acquisition of Communicate Language School
Manchester
University Partnerships with UEL commences
Sale of Malaysian business and increased focus on
UK operations
2020
Appointment of Richard Mace, heralding a change
in management and build-up of the UK team
Closure of Singapore business, allowing a clear focus
on UK operations
Launch of NCUK International Foundation Year
programme
2021
EMT strengthened with appointment of CFO and
Centre Director of UEL International Student Centre
£1.70m raised via capital markets to fund growth
2022
Debt restructuring to facilitate recovery
Awarded five-year contract as UEL’s preferred
supplier to recruit from China
2023
Five-year student recruitment partnership with
University of Chichester
Return of Juniors and University Pathways student
number growth post COVID-19
EMT strengthened with appointment of Chief
Development Officer, ELT and Juniors Sales Director
and HR Business Partner
5
Junior and summer
camp programmes
Offering
English language and travel
experience for secondary school
students under the Language in
Action brand.
Description
Fully-immersive summer
residential language camps and
bespoke group programmes for
13 to 18 year olds.
Courses
General English and cultural
experiences.
Locations
Summer study centres.
Higher education and
university partnerships
English Language
Schools
Offering
British Council accredited, English
UK registered schools in London
and Manchester.
Description
A range of interactive language
programmes ranging from
General English to Content and
Language Integrated Learning
(“CLIL”) teaching programmes.
Courses
General English, English for
professionals, exam preparation
for International English
Language Testing System (“IELTS”)
and Cambridge.
Locations
• London
• Manchester
Offering
On and off-campus University
Pathways programmes helping
students progress to a range of
universities.
Description
Pre-university, foundation and
pre-masters level courses for
international students joining
UK universities.
Courses
Undergraduate and
postgraduate foundation
programmes in:
• Business and management
• Accounting and finance
• Humanities and social science,
and
• Engineering and science
International Year One in business
and engineering.
In-sessional and pre-sessional
courses.
Locations
UEL, NCUK, Malvern House
London.
Supported by our centralised services
Online student learning – Student recruitment
Marketing – Human resources
Finance – Quality assurance
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 6 Malvern International Plc Annual Report and Accounts 2023
BUSINESS MODEL
We are a student-centred organisation, putting the needs and academic progression
of our students first. In doing so, our business is able to thrive, providing opportunities
to form partnerships, offer employment and career opportunities, and deliver value
to our investors.
Group inputs
What we offer
People
The Group counts over
153 members of staff, made
up of 63 teaching staff and
90 support and leadership
members.
Premises
Malvern’s education centres
provide a high-quality focus
points for our student body.
Technology
Malvern has developed its own
online education platform, offering
online courses and additional
learning support in the event of
another COVID lockdown. The
Group has a central student
management and accounting
system.
Financial investment
Access to the capital markets
enables the Group to grow
the business through internal
investment on new products,
new locations, and acquisitions.
Excellent quality, accredited education
Long-term partnerships
Malvern’s success and growth is reliant on maintaining
its reputation as a quality educator. All our staff have
access to training and development and we continually
look for ways to improve our educational services.
Flexibility for students
An inclusive community
Malvern’s courses are available in multiple locations
giving students access to a variety of experiences during
their learning. Students can choose the time they commit
to their education, whether it is part-time, full-time, or
evening classes.
Sustainable growth in student numbers
Strong cost control
The Group aims to grow its student body organically
by building its reputation as a quality educator,
expanding its product offering, acquiring established
complementary education business, and providing an
unrivalled student experience.
Underpinned by
The Group continually improves and expands the
range of products and services offered directly or in
collaboration with its partners, including universities,
corporate customers, and accreditors. Its partnerships
with regional distribution and sales agent networks are
key to student recruitment.
Many of Malvern’s students are living and learning in
a foreign country. They rely on Malvern to help find
accommodation, organise outings and social events,
and to make the most of their cultural experience.
Malvern education centres act as a social, support, and
information hub for students and staff bodies.
The Group maintains tight cost controls across all its
operations to ensure efficient use of the resources
available.
A strong culture of
innovation and efficiency
with no compromise to the
quality of education.
Targeting profitable
markets while maintaining
student nationality mix.
Varied courses and
Embedded quality control
high-quality and
processes, formalised risk
results-driven teaching.
management, and strong IT
infrastructure.
7
What we offer
Stakeholder outcomes
Excellent quality, accredited education
Long-term partnerships
Students
Malvern’s success and growth is reliant on maintaining
its reputation as a quality educator. All our staff have
access to training and development and we continually
look for ways to improve our educational services.
The Group continually improves and expands the
range of products and services offered directly or in
collaboration with its partners, including universities,
corporate customers, and accreditors. Its partnerships
with regional distribution and sales agent networks are
key to student recruitment.
Flexibility for students
An inclusive community
Many of Malvern’s students are living and learning in
a foreign country. They rely on Malvern to help find
accommodation, organise outings and social events,
and to make the most of their cultural experience.
Malvern education centres act as a social, support, and
information hub for students and staff bodies.
Sustainable growth in student numbers
Strong cost control
The Group maintains tight cost controls across all its
operations to ensure efficient use of the resources
available.
Malvern’s courses are available in multiple locations
giving students access to a variety of experiences during
their learning. Students can choose the time they commit
to their education, whether it is part-time, full-time, or
evening classes.
The Group aims to grow its student body organically
by building its reputation as a quality educator,
expanding its product offering, acquiring established
complementary education business, and providing an
unrivalled student experience.
Underpinned by
A strong culture of
Targeting profitable
innovation and efficiency
markets while maintaining
with no compromise to the
student nationality mix.
quality of education.
Varied courses and
high-quality and
results-driven teaching.
Embedded quality control
processes, formalised risk
management, and strong IT
infrastructure.
We create value for students by
offering them qualifications and
language skills that support them
throughout their lives. We are
strongly student centred, ensuring
continued progression in learning.
Partners
Our education products and
services are an important
student recruitment tool for our
partners and expands their own
geographic reach. We support
students so that they are better
prepared and have the right
qualifications and skills to embark
on their chosen courses.
Shareholders
Our aim is to deliver long-term
shareholder value through capital
gain and, in time, through the
payment of dividends.
Staff
We offer long-term career
opportunities for our staff in
a rewarding and innovative
environment.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 679,965
international students enrolled
in 2021/22 academic year
(2020/21: 605,130)
8 Malvern International Plc Annual Report and Accounts 2023
OUR MARKETS
The UK remains the second most popular study destination for international students
after the US. The international education market in the UK can be broadly categorised
into two segments: Higher Education (“HE”) and English Language Training (“ELT”). Both
sectors have promising long-term growth prospects.
The UK International Education Strategy aims to attract 600,000 HE students to the UK annually. With 679,970 students in
2021/22, the UK has met this international student target for two consecutive years. The most recent data available indicates
that total education revenue exports for 2021/22 reached £25.6 billion. The Government recognises that achieving its 2030
revenue target of £35 billion requires an average annual increase of 3% in education exports. Key to meeting this target is
the expansion of international students in HE and Further Education at the UK’s prestigious institutions, along with supporting
all education sub-sectors including ELT and the Juniors market.
International Higher Education (“IHE”)
Chart 1: IHE student enrolments
Chart 2: IHE student enrolments
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2017/18
2018/19
2019/20
2020/21
2021/22
Non-European Union
European Union
IHE is a growing market in the UK with Government-
set student number and revenue targets. The sector is
supported by the Government in the form of student
visas, aimed at making studying in the UK attractive to
international students. UK graduates have the right to stay
in the UK to work for two years once they have completed
a UK higher education qualification (including Bachelor
and Master’s degree), and three years if they have
completed a PhD.
The Government’s UK International Education Strategy
aims to have 600,000 IHE students enrolled each year by
2030. This target was achieved well-ahead of schedule in
the 2020/21 academic year, leading to calls to raise the
target to one million IHE students.
Bangladesh
Pakistan
Nigeria
India
China
160,000
European Union
Non-European Union
120,000
80,000
40,000
0
2017/18
2018/19
2019/20
2020/21
2021/22
China
India
Nigeria
Pakistan
Bangladesh
Malvern’s sales and marketing strategy focuses around
the recruitment of non-European students, which make
up over 80% of total IHE students in the UK (Chart 1). The
Company targets the largest and fastest growing student
sending markets, including China, India, and Nigeria
(Chart 2). Together, these three countries account for 58%
of non-European students (2020/21: 55%).
HESA, Higher Education Student Statistics: UK, 2021/22 – Where students come from and go to study
Sources:
•
• BONARD, Quarterly Intelligence Cohort, Executive Summary 2022 and 2023 prepared on behalf of English UK for Q1, Q2, Q3, & Q4
• HM Government International Education Strategy: global potential, global growth, March 2019
• HM Government International Education Strategy, 2023 progress update
OVERVIEW
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
9
English Language Training (“ELT”)*
Chart 3: Additional student weeks delivered each
quarter 2022 vs. 2023
50,000
40,000
30,000
20,000
10,000
0
Q1 movt.
Q2 movt.
Q3 movt.
Q4 movt.
Chart 4: ELT student weeks recovery since 2019
500000
Adult weeks
400,000
Junior weeks
300,000
200,000
100,000
0
Q1
Q2
Q3
Q4
Total weeks 2022
Total weeks 2019
Junior weeks
Adult weeks
Total weeks 2019
Total weeks 2022
Total weeks 2023
The UK International Education Strategy recognises the
pivotal role UK ELT plays in international trade-led activities.
Therefore, the Department for International Trade and the
British Council continue to utilise their networks to promote
and support ELT overseas, in collaboration with English UK,
of which Malvern is a member.
Since 2020, there are fewer British Council accredited ELT
schools. This presents an opportunity for Malvern to capture
a larger market share, reassess its pricing strategies, and
consider expanding its presence through consolidation.
A longstanding challenge in the UK ELT market is that
students from key source markets are improving their
English proficiency through in-country English-language
teaching. To remain competitive and to demonstrate the
value of studying English abroad to younger students,
Malvern is investing in developing specialised academic
education programmes tailored to core sending markets.
The ELT market comprises two segments: adult courses
and junior provision in the form of summer camps. Market
research typically groups these two audiences together,
despite their differing recruitment strategies and business
models. Both segments experience peak seasons during
the summer months, but adult ELT tends to be more evenly
spread throughout the year.
In 2023, the global ELT market was estimated to have
recovered to approximately 85% of its 2019 levels,
falling short of the 100+% expected recovery (Charts 3
and 4). This slow return of ELT students is believed to be
influenced by changes in visa policies. While the current
visa requirements have a less direct impact on ELT than
HE, student sentiment towards studying in the UK has been
affected, particularly in the aftermath of Brexit, resulting in
a slowdown in student mobility. Additionally, the rising cost
of air travel has led to a decrease in overall numbers, but
has also increased the length of stays.
As we step into 2024, bookings are showing promising signs
of returning to pre-pandemic levels. This positive trend is
shared by Malvern and the Group’s key agents, with early
bookings, especially in the Juniors market, displaying robust
growth.
* Figures relate to a like-for-like which is based on data from 119 reporting centres.
10 Malvern International Plc Annual Report and Accounts 2023
OUR STRATEGY
1
2
Grow revenue through
existing business streams
Drive financial
performance
As a global learning and
skills development partner,
the Group’s vision is to
invest in and develop its
operating businesses in
the education sector,
to establish centres of
excellence, and to deliver
long-term growth and
sustainable profit.
In 2023, the Executive
Management Team
evolved the strategy
in the context of the
Group’s potential to
take advantage of the
UK Government’s UK
international education
strategy which aims to
achieve £35 billion in
education exports per
year, recruiting over
600,000 students to the UK.
We grow our revenue by increasing the number of international students we recruit and teach, and increasing the time they spend with us. We do this by:• Leveraging our success with UEL to secure new partnerships with higher education institutions• Enhancing our value proposition to potential partners• Optimising course fee revenues and reaching full capacity in our schools and settings• Improving the effectiveness of lead generation, conversion and admissions, and maintaining strong relationships with sending country embassies • Diversifying source countries and nationality mix by expanding the agent network, increasing direct sales to students, and having a substantive digital presence • Demonstrating excellence in delivery via student satisfaction metrics and progression rates This is a key priority. The Group continues to strengthen its financial position as top-line performance improves.We do this by:• Driving top-line performance and high-margin business• Reducing historical creditor balances• Repaying debt to release cash and boost profits • Improving cash balances• Applying strong expenditure controls 11
3
4
5
Diversify our educational
experiences
Ensure a high-performance
culture for our people
Enhance our reputation as a
trusted education brand
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSWe see growth opportunities in developing new education products and experiences, through organic expansion in our existing settings and exploring new centres to add to our current footprint.We do this by:• Expanding subject and course level mix• Introducing new entry level or higher education qualifications • Offering more than just education, such as providing pastoral care, cultural experiences, orientation, accommodation, and ongoing support to international students• Responding to student/agents and partner requirements/demands• Working closely with your agents/universities to understand demand and needsWe develop and engage with our people to offer long-term and rewarding careers and meet the expectations of our students and partners. We do this by:• Offering competitive pay, rewards, and benefits• Having a positive, supportive work culture linked to our values • Recruiting talent who are aligned to our values to ensure long-term commitments• Providing continual and tailored training and development programmes• Actively communicating and engaging with staff, and promoting regular feedback in a variety of forums • Talent and leadership programmes, and providing skills training to allow staff to progress • Offering year-round or regular employment for contract staffBy building trust with stakeholders and enhancing our reputation as a quality education provider we are able to attract and retain students and secure partnerships.We do this by:• Providing and evidencing strong academic outcomes and attainment levels• Gaining and maintaining relevant accreditations, quality assurance, and passing compliance audits for each business unit • Investing in high-quality environments in our schools where students can maximise their potential• Selecting high-quality settings for Juniors courses• Providing a seamless and responsive student experience from first enquiry through to completion of a course• Enhancing non-academic provision for students such as student support, accommodation, and pastoral care• Setting consistent service-level agreements to partners and agents 12 Malvern International Plc Annual Report and Accounts 2023
OPERATING REVIEW
“Our performance across the three
divisions is allowing us to make strategic
investments in our people and systems.
These are crucial as we prepare for the
next stage of growth and expansion.”
Richard Mace, Chief Executive Officer
Higher education and University
Pathways
Our expansion of the International Student Centre at UEL
has positioned it as one of the larger UK Pathway centres.
Student intake at the International Study Centre at the UEL
saw an impressive 66% growth, increasing from 461 for the
2022/23 academic year to 766 for 2023/24. This resulted in a
109% increase in revenue in 2023, net of agent commission
income which passes directly through to our UEL Pathway
agents.
The success of our student recruitment efforts has been
accompanied by consistently high levels of student
attainment and satisfaction. This success has become a
prominent feature of our contract with the university and
is pivotal in our ongoing discussions with UEL regarding a
potential longer-term contract for the 2025/26 academic
year and beyond.
Recognising the vital role that international students play
in the financial sustainability of many universities, we are
leveraging our success with UEL by exploring potential
partnerships with other institutions. As part of this initiative,
we reviewed the university partnership value proposition
and sales structure.
We are actively engaging in conversations with several
potential university partners to expand our reach and
impact in the IHE sector.
English Language Training (“ELT”)
Our adult ELT revenue from both our Manchester and
London schools increased 23.4%, ahead of industry levels.
We experienced growth in the MENA region, driven by a
diverse mix of group bookings, sponsored students, and
self-funded individuals. Additionally, we achieved positive
results in other regions such as Brazil, Taiwan, and Turkey.
In 2023, the UK ELT industry saw an 83% return to 2019
levels, indicating bookings are reverting to pre-pandemic
patterns.
We decided to close our Brighton school due to the lack
of expected growth, exacerbated by challenges related
to COVID-19, and the necessity for additional investment
to ensure its success. The break in our property lease
presented an opportunity for us to redirect our focus on our
core schools in London and Manchester.
Recognising the growing demand, we have expanded our
homestay providers in Manchester and have plans to do
the same in London, where there is a shortage of available
providers. Additionally, we are actively building our study
abroad agent network and investing in digital advertising
to bolster our direct marketing efforts and student
recruitment initiatives.
Malvern Juniors
Malvern Juniors, operating under the Language In Action
brand, has outperformed the wider Junior market. Despite
the market returning to 90% of pre-pandemic levels, we
have gained market share and experienced growth well
ahead of the recovery curve.
In 2023, we achieved record student numbers with revenue
growing 175.6% on the prior year with 2,478 students from
five Junior summer centres with four in London and one in
Manchester (2022: 975 students from three centres).
Most of our students (85%) hailed from Italy, with growing
numbers from Taiwan (4%) and the MENA region (4%), and
the remainder consisting of a mix of other nationalities.
Encouragingly, pre-bookings for 2024 indicate growth
across all our key markets.
Looking ahead to 2024, we are expanding to nine summer
centres with a significant increase in students from the
China and Taiwan markets. To address potential constraints
on accommodation, we are exploring the possibility
of hosting more students by diversifying our portfolio of
locations and centre experiences.
To differentiate and expand our offerings further, we are
developing new high-end academic Juniors programmes
introducing off-season groups in January, February, and
Easter. This strategic move aims to reduce our dependency
on the summer peak season. Marketing efforts for these
programmes will begin in 2024 for delivery in 2025.
13
Our people
Throughout the year, we strategically expanded our
team with key appointments, enhancing the commercial
capability of each of our three business divisions and
bolstering operational support.
Stephen Harvey, a highly successful and seasoned individual
in his field, has joined as Chief Development Officer focusing
on growing the University Pathways division.
In ELT and Juniors, Matt Hird has joined as Director of Sales,
bringing a wealth of experience in the sector. Emiliano
Sallustri has transitioned to a new role as Commercial
Director of ELT taking charge of operational delivery and
expansion of the ELT division.
We have welcomed a new Head of Juniors with extensive
experience in the China market. Their insights and industry
knowledge will be crucial as we expand the programmes
we deliver to Chinese students and as we prepare to
launch new high-end academic programmes.
Lastly, we are delighted to have Kelly McGrath join us
as HR Business Partner, leading the evolution of our HR
strategy and implementing structures to support business
growth. In 2023, our HR focus was on mapping out our
human capital requirements, following a “right people,
in the right place at the right time” approach. This has
involved workforce planning, examining the roles we need
to fill, and conducting a training needs analysis. We also
reviewed our recruitment strategy to ensure we hire talent
aligned with our values.
Looking ahead to 2024, we will continue to invest in our
people as an essential component of our business growth
and our dedication to delivering high-quality education.
Financial and student administration
Throughout the year, we have focused on strengthening
our operational foundations and financial management,
building robust systems, and investing in core functions.
We have made investments in developing and enhancing
our accounting and control systems. These improvements
are aimed at ensuring greater efficiency, accuracy, and
transparency. Through diligent financial management, we
have successfully reduced historical creditor balances. This
demonstrates our commitment to sound financial practices
and our focus on improving our financial position.
We have expanded our administrative function in
Nepal to a 25-strong team, significantly enhancing our
financial reporting capabilities and the management of
student data and related processes. This centralisation
has enabled more efficient and consistent student
management practices. Additionally, it provides the Group
with 24-hour customer support, improving our services for
students and partners alike.
Furthermore, the Nepalese team’s support in recruiting
students from the South Asia market into our University
Pathways programme is proving highly beneficial. This
support is featuring in our discussions with potential new
partners, demonstrating our commitment to expanding
their reach into untapped markets.
Sales and marketing
We are continuing our investment in the sales and
marketing team resources, recognising their pivotal
role in our growth. We are also focused on fostering a
closer connection with student delivery, arranging visits
to campuses and settings so that our sales team better
understands our market. Improving the student journey
life cycle from the first enquiry to course completion is a
priority. We are evolving our processes to measure our
performance in this area and we are refining our processes
and systems to maximise conversions.
In addition, we are investing in our school environments
to provide a conducive and modern learning space for
our students. Enhancing our agent relationships remains
a focus, and we have introduced new service level
agreements to ensure effective communication and
partnership with them.
Outlook
Over the past year, our strong performance has allowed
us to invest in assembling a high-performance leadership
team. We have successfully attracted top talent with
significant track records and industry profiles who share our
ambitious growth plans. This has enhanced the momentum
in the business, positioning us for continued success.
We are closely monitoring UK visa and immigration
policies, as changes in these areas can have a significant
impact on our operations, particularly within our University
Pathways business. As a result, we are making strategic
investments in people, products, and locations to enhance
the business mix. We are diversifying our offerings by
developing new academic programmes for Juniors, and
expanding our entry-level and HE qualification course
offerings. We are also actively pursuing a pipeline of
opportunities in the University HE sector.
I am confident that we will see further growth in revenue
and Underlying profit in FY2024.
Richard Mace
Chief Executive Officer
9 April 2024
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 14 Malvern International Plc Annual Report and Accounts 2023
KEY PERFORMANCE INDICATORS
FINANCIAL KPIs
Financial KPIs are presented as Underlying and Statutory. Underlying numbers exclude the results of the closed
Brighton school, the charge for warrants and share based payments and the write-back of an historical loan. See
note 11 for a reconciliation.
Revenue
Revenue
REVENUE (£m)
11.32
10.65
11.32
10.65
6.34
5.70
2.41
2.27
2.41
2.27
6.34
Statutory revenue
excluding agent
commission income
5.70
Underlying revenue
excluding agent
commission
Statutory revenue
excluding agent
commission income
Underlying revenue
excluding agent
commission
Revenue
2021
2022
Revenue
2023
2021
2022
2023
Operating loss
Operating loss
OPERATING PROFIT/(LOSS) (£m)
0.51
0.05
0.51
0.05
-0.79
-0.79
Statutory operating profit/(loss)
Underlying operating profit/(loss)
-0.79
-0.79
Statutory operating profit/(loss)
Underlying operating profit/(loss)
-1.17
-1.32
-1.17
-1.32
Operating loss
2021
2022
Operating loss
2023
2021
2022
2023
Loss for the year
11.32
Performance: Statutory revenue excluding agent
commission income increased 78.5% year on year.
Adding these together, total Statutory revenue
was £12.26m (2022: £6.51m).
Loss for the year
10.65
11.32
10.65
5.70
5.70
6.34
0.15
-0.16
Statutory revenue
excluding agent
Underlying revenue excluding agent commission
commission income
income increased 86.8% year on year. Agent
-0.16
commission income, which passes directly
Underlying revenue
Underlying revenue
excluding agent
excluding agent
through to our UEL Pathway agents was £0.94m
2.41
commission
commission
Statutory profit/(loss)
(2022: £0.18m).
Statutory revenue
excluding agent
commission income
Underlying profit/(loss)
Statutory profit/(loss)
0.15
2.27
Underlying profit/(loss)
-1.07
6.34
-1.08
-1.08
2022
-1.07
2023
2022
2021
2023
-1.43
-1.59
2.41
2.27
2021
-1.43
-1.59
Performance: Strong revenue growth supported
the turnaround from a loss in 2022 to an operating
profit in 2023 at both a Statutory and Underlying
operating level.
Loss per share
Loss per share
0.05
0.51
0.51
0.05
0.60
-0.59
-0.79
-0.79
-0.79
Statutory operating profit/(loss)
0.60
-0.59
Underlying operating profit/(loss)
-0.79
Statutory operating profit/(loss)
Underlying operating profit/(loss)
-1.17
-1.17
Statutory profit/(loss) per share
-1.32
-4.95
-4.88
-1.32
-4.95
Underlying profit/(loss) per share
-4.88
Statutory profit/(loss) per share
Underlying profit/(loss) per share
2021
-7.60
-8.49
2022
2021
2023
2022
2023
-7.60
-8.49
2021
2022
2021
2023
2022
2023
2021
2022
2021
2023
2022
2023
Loss for the year
Loss for the year
PROFIT/(LOSS) FOR THE YEAR (£m)
LOSS PER SHARE (pence)
Loss per share
Loss per share
0.15
-0.16
0.15
-0.16
0.60
-0.59
0.60
-0.59
Student numbers
Statutory profit/(loss)
Underlying profit/(loss)
Student numbers
Statutory profit/(loss)
Underlying profit/(loss)
-4.95
-4.88
Statutory profit/(loss) per share
Statutory profit/(loss) per share
-4.95
-4.88
Underlying profit/(loss) per share
Underlying profit/(loss) per share
-1.08
-1.07
-1.43
-1.59
-1.59
-1.08
1.90
-1.07
2.42
2020
-1.43
2021
2022
2020
2021
2022
1.90
2.42
6.50
-7.60
-8.49
-7.60
-8.49
6.50
2021
2022
2021
2023
2022
2023
2021
2022
2021
2023
2022
2023
Performance: The net loss position improved year
on year as a result of top-line performance as the
business continued to recover post-pandemic.
Student numbers
Student numbers
1.90
2.42
2020
2021
2022
2020
2021
2022
1.90
2.42
6.50
6.50
Performance: The Statutory loss per share is
calculated using weighted average number of
shares in issue during the period of 2,442,400 (2022:
21,915,119). The Underlying profit per share was
0.60 pence (2022 loss: 4.88 pence).
15
3,366
3,368
NON-FINANCIAL KPIs
STUDENT NUMBERS
1,998
1,893
2,478
311
144
500
Nil
794
975
2021
2022
2023
2021
2022
2023
2021
2022
2023
English Language Teaching (“ELT”)
University Pathways
Juniors
Number of students who have undergone tuition for a minimum of ten hours per week during the course
of the year.
Performance: ELT numbers saw moderate growth during the year. University Pathways saw a significant
jump in student numbers for the 2023/24 academic year driven by the UEL. The Juniors division performed
well ahead of 2022 as summer programmes returned in earnest. These figures are expected to continue
into 2024 as we introduce more programmes targeting the Chinese market.
15,226
17,417
8000
12000
16000
20000
STUDENT WEEKS
15,457 15,668
English Language Teaching (“ELT”)
Juniors
5,388
5,062
2021
2022
2023
2021
2022
2023
1,960
Nil
Total number of weeks delivered to students who undergo a minimum of ten hours per week including
in-class and online courses. This metric is relevant to ELT students only.
Performance: As expected, the average number of student weeks for ELT remained consistent with 2022 at
eight weeks. The average length of Juniors programmes increased from approximately ten days to 14 days.
The Juniors division typically offers students two weeks of immersive English language tuition and cultural
experiences.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 16 Malvern International Plc Annual Report and Accounts 2023
FINANCIAL REVIEW
“Revenues have increased across
all areas of the Group. The strongest
performing areas continue to be Higher
Education (“HE”) and Juniors.”
Daniel Fisher, Chief Financial Officer
Financial performance
Underlying revenue, excluding agent commission income
which passes directly to our UEL Pathway agents, increased
86.8% to £10.65m (2022: £5.70m). Revenues have increased
across all areas of the Group. Statutory revenue for the
year was £11.32m (2022: £6.34m). The strongest performing
areas continue to be HE and Juniors. Strong revenue
performance delivered an Underlying operating profit of
£0.51m (2022 loss: £0.79m).
The Underlying profit for the year was £0.15m (2022 loss:
£1.07m), resulting in a Underlying profit per share of
0.60 pence (2022 loss: 4.88 pence). The growth of HE and
Juniors are currently the key drivers of profitability. The
combination of 231 students on our January 2023 UEL
Pathway, and 447 students in September 2023, was a key
factor in achieving Underlying profitability for the Group.
Pleasingly, the Juniors contribution to profit is also growing
year on year.
The Statutory loss for the year was £0.16m (2022 loss: £1.08m).
The loss can be attributed to the year end revaluation
of warrants which resulted in a £0.23m expense in the
Consolidated Statement of Comprehensive Income.
The revaluation movement is due to the share price of the
Group more than doubling in 2023. In addition, the Brighton
school was closed during the year. Brighton contributed a
£0.18m loss to the Group’s consolidated Statutory loss for
the year. The Group also released an historical loan liability
which resulted in a credit in the Consolidated Statement of
Comprehensive Income of £0.10m.
Operating costs
Group Underlying salaries and benefits in 2023 were £2.69m
against £1.89m in 2022. This rise can be attributed to
increased sales staff, and student facing staff to deal with
the large increase in student numbers during the year. In
addition, market challenges around cost of living, salary
expectations, and staff retention have also contributed to
a rise in our wage bill. Total Statutory operating expenses
were £5.19m (2022: £3.45m).
Our investment in the business is fulfilling our strategic
aims of continued revenue growth and de-risking the
Group away from over-reliance on large customers and
key regions. Spending on sales and marketing activities
(excluding salaries) totalled £0.41m in 2023 (2022: £0.25m).
An increase of £0.18m was incurred on new sales,
marketing, and business development staff compared
to the prior year with a large portion of this spent in H2.
This is expected to increase as we onboard more senior
sales staff in 2024.
Consolidated Statement of Financial
Position
We continue to make incremental improvements on the
Consolidated Statement of Financial Position. Top-line
revenue growth has translated to an improved cash
position. A true representation of this improvement was
evidenced during the year when the Group’s BOOST&Co.
debt was reduced from £2.60m to £2.24m in 2023 – the first
time that the Group has been able to reduce the debt.
We anticipate a further reduction of the BOOST&Co. debt
across 2024.
In addition, a large historical PAYE balance (£0.23m) was
also repaid in full during the year. This leaves the London
rent arrears, currently on a payment plan, as the only
COVID-related supplier balance outstanding.
The cash balance at the end of the financial year was
£2.20m (2022: £1.18m). This increase was due to the
late invoicing (£0.84m) to us of accommodation costs.
We continue to manage expenditure tightly. In addition,
debtor days have reduced which is important for our
working capital and growth requirements.
Daniel Fisher
Chief Financial Officer
9 April 2024
RISK MANAGEMENT AND PRINCIPAL RISKS
17
To effectively manage risk, the Group maintains a risk register. The risk register serves as a centralised repository documenting
all identified risks and the strategies and controls for mitigation. The register allows for ongoing monitoring and review of risks,
ensuring proactive measures are in place to mitigate their impact. The Group’s risk register was created in consultation with
the senior management team and the Directors. The process involves:
1. Identifying risks
2. Categorising risks
3. Assessing the likelihood and impact
4. Assigning risk owners
5. Developing mitigation and controls
The register is reviewed quarterly at both Board and Executive team level. Risk owners are responsible for notifying the
Executive team and Board of any unfavourable changes to the likelihood and impact of identified risks.
Principal risks
Financial exposures
Risk level: High
Description
Mitigation
The Group faces a number of financial
exposures which could potentially impact
future operations such as credit risk primarily
in respect of its trade receivables, reliance
on one customer, margin pressures, currency
movements in key markets, and liquidity.
The Group has strengthened its cash collection processes and carries
out regular credit check. Sales reports and financial performance are
reviewed at monthly management meetings. Detailed cash flow forecasts
are monitored and reviewed. Exposure to credit risk is mitigated by
evaluating the granting of credit, close monitoring, and the management
of collections from trade receivables. The Group has access to borrowing
facilities and fundraising activities. These might be attractive in certain
circumstances to provide additional working capital and fund growth
opportunities.
Regulatory and compliance changes
Risk level: Medium
Description
Mitigation
From time to time, Malvern is subject to
regulatory changes and enforcement,
which can have a significant impact to
the Group through diminished student
enrolments.
The Board is mindful that its partners and
governing bodies can potentially withdraw
accreditation if the Company does not
meet the required standards.
Certain staff and third parties have access
to market or price sensitive information for
which early or untimely release could have
a material impact on contract negotiations
and/or reputation of the Company.
Management regularly assess exposures in each territory and for each
product offering, and takes advice from immigration solicitors specialising
in education providers to make adjustments.
The Company ensures it has the correct accreditations in place in order to
operate. A register of accreditations and renewal dates is maintained.
An ongoing programme of internal assessment is carried out to ensure the
Group maintains standards in an “always-ready” approach for planned
and un-planned assessments by governing bodies. Each centre has an
individual responsible for quality assurance.
Staff members are regularly appraised of what information is in the public
domain and what constitutes prices sensitive information. All staff and third
parties where appropriate are subject to confidentiality and non-disclosure
agreements.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 18 Malvern International Plc Annual Report and Accounts 2023
Risk Management and Principal Risks continued
Competition and commercial changes
Risk level: Medium
Description
Mitigation
The Group faces the risk of strong short-term
competition in the form of intermittent price
discounting, loss of major customers to
competition, and loss of key staff due to a
competitive labour market.
The management monitors closely forward bookings to identify any
changes to anticipated sales and monitors competitor pricing, in order to
adjust its own pricing and remain competitive.
The Group has a strong focus on adding value and reducing costs to
customers.
Team succession plans have been put in place and remuneration
packages have been reviewed to support staff retention.
Reputational risks
Risk level: Low
Description
Mitigation
Maintaining Malvern’s reputation as
a quality education provider is vital to
the success of the Company. A loss in
confidence from accreditors, partners, and
customers could have an immediate and
profound impact on the business and its
ability to recruit and retain staff.
The Board ensures it has the required accreditation and licences to
operate (see above for regulatory and compliance changes).
The Group has clear policies on responsible and ethical behaviour and
has a zero-tolerance policy on corruption and bribery. These policies are
displayed in every school and online. The Group provides induction training
and regular training to all staff. The Group has clear incident management
and crisis management strategies and procedures.
The Group has clear incident management and crisis management
strategies and procedures.
Occupational health, safety, and
wellbeing
Description
Mitigation
Risk level: Medium
Student or staff members are injured in one
of our working environments or when under
our care.
Risk assessments are undertaken for all working environments. The Group
has an accident and incident reporting and investigation process in place.
Changes to procedures are communicated and training is carried out
regularly.
Operational risks
Risk level: Medium
Description
Mitigation
The Group has a data protection policy and limits the access of users
to sensitive information. Group IT is managed by a dedicated IT support
company which also manages cyber security. The management will be
reviewing its cyber security action plan in 2024.
The Group collects, maintains, transmits,
and stores data about its students and
employees, including personally identifiable
information. However, the Group’s security
measures may not detect or prevent all
attempts to breach such security measures
and protocols. A breach of such security
measures and protocols could result in third
parties gaining unauthorised access to
customer and/or employee data stored by
the Group, which could expose the Group
to litigation, regulatory action, and other
potential issues.
STAKEHOLDER ENGAGEMENT
19
Directors’ Section 172(1) Statement
The Board is collectively responsible for the decisions made
towards the long-term success of the Company and how
the strategic, operational, and risk management decisions
have been implemented throughout the business is
detailed in this Strategic Report.
The Company’s main stakeholders are identified in the
Business Model on page 6, being staff (employees),
students (customers), partners (either customers or joint
venture partners), and shareholders.
We value the feedback we receive from our stakeholders
and we take every opportunity to ensure that where
possible their wishes are duly considered in the Company’s
decision making, and the formulation of its strategy.
Key decisions made in 2023 to meet stakeholder
expectations:
• Developed the Group strategy to take advantage of
market opportunities and support business growth. See
page 10 for further details
• Reviewed our people strategy, recruitment plans,
and staff policies to align to our values and ensure a
high-performance culture
• Evolved our customer and student journey to ensure a
quality life cycle from first contact to graduation
• Appointed key staff members to support and build
partnership relationships
• Reviewed the University Partnerships value proposition
and sales structure to make it more attractive to
potential university customers
• Agreed to evolve our corporate social responsibility
strategy in 2024
Staff
As an educational services business, Malvern’s strength
derives from the commitment, capability, and cultural
diversity of its employees. The Company adopts a policy
of diversity at all levels including candidate selection,
role assignment, and individual career development.
The Company encourages the participation of all
employees in the operation and development of the
business by offering open access to senior management,
including the Executive Directors, and through regular
communications through road shows and the intranet.
Group policies are regularly reviewed and updated and
communicated to all staff and are easily accessed via the
Company intranet.
The Group incentivises employees through share based
incentives and the payment of bonuses and commissions
linked to performance objectives. Where appropriate
these objectives are linked to profitability.
We continue to focus on enhancing our colleagues’
personal development, with performance appraisals
leading to a training needs analysis for our each staff
member.
Our EMT (see page 22) is charged with driving the delivery
of our strategy as set out on page 10.
The Nomination and Remuneration Committee oversees
and makes recommendations of Executive remuneration
and any long-term share based incentives. The Board
encourages management to improve employee
engagement and to provide necessary training in order to
use their skills in the relevant areas in the business.
Students
Our purpose, mission, and values place our students at
the heart of all of our operations, and their success is key
to our future strategic developments. We proactively seek
student feedback around every aspect of our operations,
including regular surveys and informal discussions with
individuals and groups of students.
We integrate this continual informal feedback with more
formal mechanisms, such as student representative groups
and course committees and similar forums in our University
Partnerships. We report back to our students as to how their
views have informed developments within our centres via
regular two-way dialogue, and ensure the closeness of
relationships between staff and students continues to be
identified within accreditation and inspection reports as a
strength within Malvern.
Partners
The Board acknowledges that a strong business relationship
with partners, customers, and agents is a vital part of our
growth strategy. These relationships are informed by our
interactions with our students as detailed above.
Within our student recruitment function, we are in
continuous contact with our agent and sponsor partners.
We arrange to meet with key partners on a regular basis,
and take part in industry events to help facilitate joint
discussions.
We are members of a range of educational organisations,
such as English UK, where we meet with peers and discuss
areas of common concern and key developments for our
business. We are looking to expand our reach in terms of
partner organisations to help realise our strategic goals.
Within our University Partnerships division, we will
continue to solidify joint governance and management
arrangements with our partners. We continue to
participate in regular joint operations meetings covering
China, admissions, space, student performance, and
recruitment. These meetings will ensure that recruitment,
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 20 Malvern International Plc Annual Report and Accounts 2023
Stakeholder Engagement continued
admissions, and compliance are working efficiently to
maximise student numbers, progression, and to ensure a
quality student experience. Our meetings ensure alignment
between our role as a service provider and UEL’s goals,
and enable us to discuss opportunities and challenges
collectively.
Whilst day-to-day business operations are delegated to the
EMT, the Board sets directions with regard to new business
ventures and initiatives.
Suppliers
The Board upholds ethical business behaviour across the
Group and encourages management to seek comparable
business practices from all suppliers doing business with the
Company. For more information please see the Corporate
Social Responsibility (“CSR”) statement on page 27.
Community
The Board recognises its responsibility towards the
community and environment and it is Group policy to be a
good corporate citizen wherever it operates.
The Group adopts a proactive approach towards
community education-driven initiatives, particularly
where they involve the education of those less fortunate.
The Group is currently involved with RefuAid, offering free
language courses to refugees.
More detail can be found in the CSR statement in this
report on page 27.
Shareholders and debtholders
The Board places equal importance on all investors and
recognises the significance of transparent and effective
communications. As an AIM listed company we are
required to provide fair and balanced information in
a way that is understandable to all stakeholders and
particularly our shareholders, with clear information on the
Group’s activity, strategy, and financial position. Details
of how the Company communicates with its shareholders
can be found in the Chairman’s Corporate Governance
Statement on page 26.
Maintaining high standards of business
conduct
The Company has adopted the Quoted Companies
Alliance Corporate Governance Code (the “QCA Code”)
and the Board recognises the importance of maintaining a
good level of corporate governance, which together with
the requirements to comply with the AIM Rules, ensures
that the interests of the Company’s stakeholders are
safeguarded. The Board notes the changes to the QCA
Code announced in November 2023 and is taking steps
to ensure continued compliance ahead of the current
financial year.
The Board has decided to be an early adopter of
significant changes to the QCA Code, this includes:
1. All Directors to retire every year.
2. The Directors’ Remuneration Report is to be voted on
every year.
3. Every three years Directors’ remuneration policy will be
voted on.
The Board seeks to ensure that ethical behaviour and
business practices are implemented across the business.
Anti-corruption and anti-bribery training are compulsory
for all staff and contractors. The anti-bribery statement
and policy is contained in the Group’s Employee Manual.
The Group’s expectation of honest, fair, and professional
behaviour is reflected in this and there is zero tolerance for
bribery and unethical behaviour by anyone relating to the
Group.
The importance of making all employees feel safe in their
environment is maintained and a Whistleblowing policy is
in place to enable staff to confidentially raise any concerns
freely and to discuss any issues that arise. Strong financial
controls are in place and are well documented.
On behalf of the Board
Mark Elliott
Chairman
9 April 2024
21
CORPORATE
GOVERNANCE
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 22 Malvern International Plc Annual Report and Accounts 2023
BOARD OF DIRECTORS AND EXECUTIVE
MANAGEMENT TEAM
The Board of Directors
The Board is responsible for formulating, reviewing, and approving the Group’s strategy, budget, and corporate actions.
Mark Elliott,
Non-Executive Chairman
Alan Carroll,
Non-Executive Director
Date of appointment: 1 July 2019
Date of appointment: 1 October 2019
Mark is a Chartered Accountant who has had a long
Alan has over 25 years’ experience in the information
executive career in the education, technology, and
systems industry, including working in a senior capacity in
corporate finance sectors, including finance and
the development of the Ministry of Defence’s Information
management roles operating in Europe, the USA, and
System Strategy and then as a senior sales manager
South Africa. He has extensive AIM experience having
and adviser to a number of major software and systems
brought two technology companies to the market
integration companies. He is the founder and Managing
together with associated fund raises. He brings with him
Director of Ultris Limited, a niche software and services
a strong knowledge in governance, public markets, and
organisation operating in the confidential government
investor relations.
External appointments: Chairman of AIM listed Journeo
Plc and trustee of two charities, the Clockmakers’ Charity,
and the Metropolitan Drinking Fountain and Cattle Trough
Association.
Committees: Audit and Risk (Chairman) and Nomination
and Remuneration
sector. In addition, he was appointed as an independent
Non-Executive Director at Ideagen Plc when it listed in July
2012 at a market capitalisation of £13m and was a Board
member chairing the audit and remuneration committees
until the company was acquired by HG Capital for £1.1bn
in July 2022. He was also a non-executive director at Goal
Group Limited, a private UK listed company. Alan was
voted Non-Executive Director of the year in the May 2019
Money Week Mello awards.
External appointments: Ultris Limited
Committees: Nomination and Remuneration (Chairman)
and Audit and Risk
23
Richard Mace,
Chief Executive Officer
Daniel Fisher,
Chief Financial Officer
Date of appointment: 30 June 2020
Date of appointment: 6 December 2021
Richard Mace was formerly the co-owner of the
Daniel Fisher was appointed to the Board of Directors
Communicate School of English, Manchester which he
having worked as Malvern’s head of finance since January
co-founded in 2013 before it was acquired in July 2018
2021. Before joining Malvern, Daniel held a number of
by Malvern. He was responsible for overseeing year-on-
financial leadership roles including European Financial
year growth in the business in terms of student numbers,
Controller of Newell Brands plc, Group Financial Controller
revenue, and EBITDA. In addition he successfully built a
of QANTM Intellectual Property Ltd., and Head of Finance/
well-trusted brand, established an international B2B sales
Financial Controller of FPA Patent Attorneys Pty. In addition
agency network, set up digital marketing strategies,
to leading an SME in Australia through a successful IPO
introduced and developed IT systems, and successfully
as Head of Finance, Daniel’s listed company experience
gained British Council and Independent Schools
at group level also includes management of audits for a
Inspectorate accreditations.
multinational SME and merger and acquisition transactions.
Prior to founding Communicate, Richard worked in
Daniel attends Audit and Risk Committee meetings by
telecoms for large organisations such as Vodafone.
invitation.
Committees: n/a
Committees: n/a
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 24 Malvern International Plc Annual Report and Accounts 2023
Board of Directors and Executive Management Team continued
Executive Management Team (“EMT”)
In addition to the CEO and CFO, the EMT consists of
senior members of Malvern’s management team, who all
have significant experience in working the international
education sector and are charged with delivering the
Group strategy as set out on page 10.
The EMT is dedicated to help drive the strategic growth of
the organisation with an unwavering focus on delivering
quality education and student experience. With a clear
vision and mission to continue to change the lives of
international students through the power of education, the
EMT works to ensure that quality curricula, teaching, and
partnerships are central to every aspect of the business.
The EMT is in daily communication and meets formally
fortnightly to discuss progress against set objectives, raise
any concerns and potential risks to the business, business
development, and performance against internal budgets.
Any material concerns are raised and communicated to the
Board and, where necessary, are discussed at scheduled
Board meetings.
To facilitate the execution of the Group Strategy, staff
accountable for Malvern’s business divisions and functional
areas hold Monthly Business Review (“MBR”) meetings,
involving staff from each area, to report and review progress
being made and key developments.
Stephen Harvey
Chief Development
Officer
Simon Fitch
Centre Director – UEL
International Study Centre
Simon is accountable for
our provision of high-quality,
student-centred, operations
at our University of East
London (“UEL”) International
Study Centre and supporting
the development of
Pathways programmes
across the Group.
Simon has spent his career
in a range of educational
settings, and has senior level
experience in universities,
schools, and pathway
organisations, including
having previously directed
a Foundation Student
Centre. Simon is also a
board member of FOCUS,
an organisation devoted
to simplifying the relocation
journey for families and
students coming to the UK.
Stephen Harvey is
responsible for growing
Malvern’s global network
of University and Higher
Education partnerships.
With 40 years of successful
teaching, research, policy,
governance, and senior
management experience
in the global education
sectors, Stephen has
held the positions of
Non-Executive Director at
Sannam S4; Founder and
Global Managing Director
of Cambridge Education
Group’s ONCAMPUS
Higher Education Pathways
Division; Head of Higher
Education Advisory Services
at KPMG UK; Project
Manager, UK Government
Department for Education
Strategy and Innovation
Unit and UK Managing
Director of Study Group. He
is currently as Trustee of
Cumberland Lodge.
25
Ashleigh Veres
Director of Student
Recruitment
Matt Hird
Director of Sales ELT and
Juniors
Emiliano Sallustri
Commercial
Director of ELT
Kelly McGrath
MCIP, Human Resources
Business Partner
Emiliano transitioned into a
new role in 2023, to become
the strategic lead for the
growth and development
of our ELT division; adult and
junior centres (“Language
In Action”). With a strong
background in the travel
language industry, Emiliano
works closely with key
sponsors and partners to
ensure that we offer exciting
and innovative learning
opportunities for individuals
and groups.
Emiliano was the co-founder
of Language In Action
brand of junior schools that
came into the Malvern
Group in 2019.
Kelly has over 15 years’ HR
experience and is a Member
of the Chartered Institute
of Personnel Development.
She is responsible for the
development and delivery
of the People Strategy. Kelly
works with the Executive
Team to define and
deliver business growth
plans. A true HR generalist
and People Partner, Kelly
gained experience within
the Manufacturing and
Aerospace industries
before making the move
to education and supports
all areas of the business but
is particularly passionate
about people development
and engagement.
With more than twelve years
in student recruitment and
marketing, Ashleigh works
diligently to develop and
execute sales strategy for
the Group. Working closely
with our university partners
to realise shared goals, and
with a keen focus on the
development of partnerships
with internationally-
focused partners, Ashleigh
is a strong advocate for
the opportunities that
international education
provides students.
Ashleigh is responsible
for leading the Global
Recruitment Unit and
managing the marketing for
the organisation.
Matt Hird brings a wealth
of experience to the team
with 20 years in commercial
education, specialising in
ELT programmes in the UK,
USA, and Canada with
organisations such as Oxford
International Education
Group and David Game
College Group. His expertise
spans across Adult and
Juniors programmes, as well
as English-plus programmes
and bolt-on courses.
In his previous roles Matt
successfully built global sales
teams, increased student
numbers, grew revenues,
and built brand awareness
through high-quality delivery
and service. He has access
to an established global
agent network across all
markets, with a recent focus
on South Asia and Africa.
As a seasoned sales leader,
Matt excels in creating and
implementing effective
structures, processes, and
clear Key Performance
Indicators (“KPIs”) for
success.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 26 Malvern International Plc Annual Report and Accounts 2023
CHAIRMAN’S CORPORATE GOVERNANCE
STATEMENT
Dear Shareholder,
As Non-Executive Chairman, I am responsible for instilling
high standards of corporate governance within the
Company. It is my responsibility to ensure the effectiveness
of the Board on all aspects, including good governance in
dealing with all of our stakeholders. This includes ensuring
that Board meetings are held in an open manner, that the
Directors receive accurate, timely, and clear information,
and allowing sufficient time for agenda items to be
discussed. I am also responsible for ensuring the Company
has effective communications with shareholders and
relaying any shareholder concerns to fellow Directors.
The Board is committed to applying high standards of
corporate governance and evolving them as the business
grows. The Company has adopted the Quoted Companies
Alliance Code (“QCA”) to provide a framework against
which to do this, it being the most appropriate recognised
governance code for the size and structure of the Group.
Workings of the Board
The Directors consider seriously the effectiveness of the
Board, its Committees, and individual performance.
The Board is responsible for formulating, reviewing,
and approving the Company’s strategy, budgets, and
corporate actions.
At the date of the report, the Board has four members,
comprising two Non-Executive Directors and two Executive
Directors. Biographies and roles of the Directors are set out
on page 22.
The Directors believe that the Board as a whole has a
range of commercial and professional skills which enable
it to discharge its duties and responsibilities effectively.
The independent Non-Executive Directors ensure that
independent judgement is brought to Board discussions
and decisions. All Directors are encouraged to use their
independent judgement and to challenge all matters
whether strategic or operational.
The Board meets formally at least twelve times a
year with additional ad-hoc Board meetings as the
business demands. The Board is responsible for setting
and monitoring Group strategy, reviewing trading
performance, and formulating policy on key issues. The
time commitment formally required by the Group is an
overriding principle that each Director will devote as much
time as is required to carry out the roles and responsibilities
that the Director has agreed to take on.
There is a strong flow of communication between the
Directors. Board meeting agendas are set in consultation
with both the CEO and Chairman, with consideration
being given to both standing agenda items and
the strategic and operational needs of the business.
Comprehensive Board papers are circulated well in
advance of meetings, giving Directors ample time to
review the documentation and enabling an effective
meeting. Minutes are drawn up to reflect a true record
of the discussions and decisions made. Resulting actions
are tracked for appropriate delivery and follow up. The
Board maintains close dialogue by email, telephone,
and conference calls between scheduled meetings.
The frequency of communications at Board level in 2023
was maintained at a similar level of the previous year.
The Board was in regular consultation with regards to the
Group’s cash resources in order to monitor and manage
cash outflows, implementing strict cash control measures
and remaining in close contact with our debt provider.
New Directors receive a comprehensive, formal, and
tailored induction to the Group’s operations including
corporate governance, the legislative framework, and
visits to Group premises. The Non-Executive Directors ensure
that their knowledge of best practices and regulatory
developments is continually up to date by attending
relevant seminars and conferences.
Attendance at meetings during 2023
Board
meetings
(12 meetings
held)
Audit and Risk
Committee
(3 meetings
held)
Nomination and
Remuneration
Committee
(3 meetings held)
12
12
12
12
3
3
—
—
3
3
—
—
Director
Mark Elliott
Alan Carroll
Richard Mace
Daniel Fisher
Strategy and risk management
A description of the Group’s business model and strategy
can be found on pages 6 and 10 and the key challenges
in their execution are detailed in the Chairman’s Statement
on page 3 and Operating Review on page 12. The Board
is responsible for establishing and maintaining the Group’s
systems of internal financial controls and importance is
placed on maintaining robust operational controls.
The Audit and Risk Committee (see page 35) has
responsibility for the oversight of the Group’s risk
management, internal controls and procedures, and
for determining the adequacy and efficiency of internal
control and risk management systems. The Board
continuously monitors and upgrades its internal control
procedures and risk management mechanisms and
conducts an annual review, where it assesses both for
effectiveness. This process enables the Board to determine
if the risk exposure has changed during the year and these
disclosures are included in the Annual Report. In setting
and implementing the Group’s strategies, the Board,
27
having identified the risks, seeks to limit the extent of the
Group’s exposure to them having regard to both its risk
tolerance and risk appetite. Further details on the Group’s
risk management and internal controls can be found on
pages 17.
Matters reserved for the Board
The Board has a formal schedule of matters reserved for its
specific approval which includes:
• Strategy and management: review and approval of
long-term Group strategic, operational, and financial
matters such as proposed acquisitions and divestments
• Financial reporting: approval of the annual accounts
and Interim Report, the annual budget, significant
transactions, major capital expenditure
• Internal controls: ensuring maintenance of a sound
system of internal control and risk management
• Finance: raising new capital or major financing facilities,
operating and capital expenditure budgets
• Communications: approval of resolutions put forward
to shareholders, approval of circulars, and approval
of press releases concerning matters decided by the
Board
• Board membership and other appointments
• Delegation of authority: division of responsibilities
between the Chairman, CEO, and CFO, including the
CEO’s and CFO’s authority limits and the establishment
of Board committees and approval of terms of
reference of Board committees
The Board delegates specific responsibilities to two
Committees:
• The Audit and Risk Committee
• The Nomination and Remuneration Committee
Both committees have formal written terms of reference.
These terms of reference are available on the Group’s
website.
The Audit and Risk Committee
The Audit and Risk Committee comprises the two
Non-Executive Directors, Mark Elliott (Chairman) and Alan
Carroll. The Audit and Risk Committee meets at least three
times a year. Details of the responsibilities of the Audit and
Risk Committee are set out on page 35. Where necessary,
specialist external consultants are used to assist the
Committee.
The Nomination and
Remuneration Committee
The Nomination and Remuneration Committee comprises of
the two Non-Executive Directors, Mark Elliott and Alan Carroll
(Chairman). Details of the responsibilities of the Nomination
and Remuneration Committee are set out on page 32.
Where necessary external recruitment consultants are used
to assist the Committee.
Election and re-election of Directors
Directors, including those that have been appointed
since the last Annual General Meeting (“AGM”), submit
themselves for re-election each year at the Annual
General Meeting, as set out in the Directors’ Report on
page 29 and in the separate Notice of Annual General
Meeting sent to all shareholders.
Board evaluation
Annual appraisals are held of each Director, providing
feedback and reviewing any training or development
needs. Each member of the Board takes responsibility for
maintaining their skill set. All Directors have the opportunity
to undertake relevant training and attend relevant
seminars and forums at the Company’s expense.
The Board are aware of the importance of diversity
amongst its members, which includes roles and experience
with other boards and organisations. This forms part of
any recruitment consideration if the Board concludes that
replacement or additional Directors are required.
Corporate culture and social
responsibility
The Board recognises that its decisions regarding strategy
and risk will impact the corporate culture of the Group as
a whole and that this will impact the performance of the
Group. The Board is aware that the tone and culture set by
the Board greatly impacts all aspects of the Group and the
way that employees behave.
The corporate governance arrangements that the Board
has adopted are designed to ensure that shareholders
have the opportunity to express their views and
expectations for the Group in a manner that encourages
open dialogue with the Board.
The Group’s activities are centred on addressing customer
needs. Therefore, the importance of sound ethical values
and behaviours, as well as open and respectful dialogue
with employees, customers, and other stakeholders,
is crucial to the ability of the Group to achieve its corporate
objectives successfully. The Board places great importance
on these aspects of corporate governance and seeks to
ensure that it flows through all the Group’s activities.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 28 Malvern International Plc Annual Report and Accounts 2023
Chairman’s Corporate Governance Statement continued
The Board assessment of the culture within the Group
is one where there is respect for all individuals, open
dialogue amongst all levels of staff and individuals, and
a commitment to provide the best service possible to the
Group’s customers.
The Group is committed to ensuring that the highest quality
of teaching and education standards are embedded in
the services it provides. The Group provides the highest
levels of service standards in order to maintain long-term
partnerships with its customers and sales agents. This is
reflected in the growth of the customer base, and the
ability to maintain existing and form new partnerships that
support the overall growth of the business.
The Group has in place a range of policies to ensure these
standards are maintained and that the Group’s corporate
culture is well understood by all individuals and adopted
into everyday behaviours. These policies form part of
the Group’s Employee Handbook and are updated and
reviewed on a regular basis.
Details on corporate social responsibility can be found on
page 27.
Internal controls
The Directors are responsible for the Group’s system of
internal control and for reviewing its effectiveness. Internal
control systems and procedures are reviewed annually
and are designed to meet the needs of the Group and the
risks to which it is exposed. The procedures are designed
to manage rather than eliminate risk faced by the Group,
and can only provide reasonable but not absolute
assurance against material misstatement or loss. The key
procedures which the Directors have established with a
view to providing effective internal controls are as follows:
Management structure and
delegated authority
Authority is delegated to the EMT through Group
authorisation limits on a structured basis, ensuring that
proper management oversight exists at the appropriate
level. The composition of the EMT with biographies can
be found on page 22. EMT meetings are held fortnightly
and are attended by other senior management members
as required. Regular updates are provided by the heads
of divisions and operations. Any key issues from these
meetings are reported to the Group Board.
Control environment
The Group’s control environment is the responsibility of
the Directors and managers at all levels. A review of the
key risks facing the business and the effectiveness of the
Group’s internal controls is performed annually.
Monitoring systems used by the Board
The Board reviews the Group’s performance against
budgets on a monthly basis. The Group’s cash flow is
monitored monthly by the Board.
Shareholder communications
The Board attaches great importance to providing
shareholders with clear and transparent information on
the Group’s activities, strategy, and financial position,
and regards regular communications with shareholders
as one of its key responsibilities. The Group is committed
to engaging with shareholders and this effort is led by the
Chairman and CEO.
A clearly laid out investor relationship strategy is in place.
The primary communication tool with shareholders is
through the Regulatory News Service (“RNS”) on regulatory
matters and matters of material substance.
The Group’s website provides details of the Company’s
Annual Report and Notices of AGMs are available to all
shareholders along with the Interim Report and investor
presentations.
In order to gauge shareholder sentiment, the Company
meets with the key shareholders typically every six months,
normally at the time of the final and interim results and
when necessary.
The Board is aware of the need to protect the interests of
minority shareholders and balancing these interests with
those of more substantial shareholders. The Company
holds an open Q&A session at every AGM and encourages
all existing and potential shareholders to contact Board
members at other times of the year. This communication
allows the Board to understand shareholders’ views, and to
ensure that the strategies and objectives of the Group are
aligned with shareholders. In its decision making, the Board
has regard to the ascertained expectations and needs
of its shareholders in accordance with its Statutory and
fiduciary duties.
The Company welcomes shareholder contact at any
time and contact details can be found on the website at
www.malverninternational.com
Mark Elliott
Chairman
9 April 2024
DIRECTORS’ REPORT
29
The Directors present their report and the audited accounts
for the year ended 31 December 2023.
Principal activities
The principal activities of Malvern International Plc are to
provide quality education services, preparing students and
learners to meet the demands of a professional life. Courses
are delivered in the UK and focus on English language
teaching and preparing students for higher education.
A detailed explanation of the Company’s principal activities
can be found on page 4.
Business model
The Company’s business model is to:
• Provide language teaching direct to its students through
its two UK based language schools
Review of the business and future
developments
A review of the business and its outlook, including
commentary on the KPIs, can be found in the Strategic
Report on page 2 to 20. The principal risks and uncertainties
facing the Company are included on page 17. The
Company’s social, environmental, and ethical policies
are set out in the Chairman’s Corporate Governance
Statement on page 26. A summary of the outlook for the
Group is given within the Chairman’s Statement on page 3.
Group results
The Group Underlying profit before taxation for the year
was £0.15m (2022: Underlying loss £1.07m). Statutory loss
before taxation for the year was £0.14m (2022: Statutory
loss £1.08m).
• Grow its language student base through direct sales and
via third-party agents
Dividends
The Directors do not recommend a dividend (2022: £nil).
• Form long-term partnerships with higher education
institutions to deliver pre-university foundation classes on
behalf of its partners. We aim to offer our services more
efficiently than our partners can themselves
• Provide short immersive English language and cultural
camps year round generally to foreign high school
students
We compete in the market by offering excellent quality and
competitively priced education. The Company’s growth is
driven by organic growth through the acquisition of new
customers and, when appropriate, acquiring established
businesses operating in the same or related markets.
Details of the Company’s business model can be found on
page 6. The Company benefits from operating in a market
which has long-term growth prospects. More information on
our markets can be found on page 8.
Strategic priorities
As a global learning and skills development partner, the
Group’s vision is to invest in and develop its operating
businesses in the education sector, to establish centres
of excellence, and to deliver long-term growth and
sustainable profit.
Each year the Board and management set strategic
priorities, and monitors performance against them
throughout the year. The strategy and strategic priorities are
set out on page 10.
Capital structure
The Company has ordinary shares of 1 pence and deferred
shares of 5 pence, 1 pence, and 0.1 pence in issue. The
shares are listed on AIM, a sub-market of the London Stock
Exchange. Holders of ordinary shares are entitled to vote at
Company meetings, to receive dividends and to the return
of their capital in the event of liquidation.
Holders of deferred shares have limited rights. Limitations
on the rights of deferred shares include no entitlement to
vote at general meetings and deferred shares are not freely
transferable.
Going concern
The financial statements have been prepared on a going
concern basis. The Directors consider the going concern
basis to be appropriate having paid due regard to the
Group and Company’s projected results during the
twelve months from the date the financial statements are
approved and the anticipated cash flows, availability of
loan facilities, and mitigating actions that can be taken
during that period.
Pleasingly, the Group produced an Underlying profit for the
year of £0.27m (2022: loss £1.07m).
The significant revenue growth seen in H2 2023, in
combination with the visibility of University Pathways revenue
in H1 2023, gives the Board confidence about Malvern’s
short and long-term prospects.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 30 Malvern International Plc Annual Report and Accounts 2023
Directors’ Report continued
In the Higher Education (“HE”) division, student numbers are
commitment from the Group’s lenders in the form of letter
up 59% (including non-ISC students) on the prior academic
of support provides confidence to the Group in respect
year (2022/23 vs 2023/24), which reflects the ongoing
of future funding. However, there still remains a material
investment in this division. Junior summer camps continue to
uncertainty with respect to the going concern status of
experience rapid growth, delivering £3.72m (2022: £1.35m) in
the Group.
revenue to the Group in 2023. Pre-bookings for 2024 summer
camps are also very encouraging being of the order of
c.£6.5m which gives the Directors further confidence in both
profit and cash flow predictions.
The Group generated sufficient cash during the year
to begin reducing the BOOST&Co. debt from £2.60m
to £2.24m.
Subsequent events
Details of subsequent events can be found in note 28 of the
financial statements.
Directors
Biographical information for each of the Directors is set
BOOST&Co., acting on behalf of IL2 (2018) Sarl, have again
out on page 22, together with details of the date of
provided a letter of comfort to provide ongoing financial
appointment, membership of Board committees and any
support to the Group for any short-term working capital
external appointments.
requirement should that become necessary. It is the
present policy of BOOST&Co. to ensure that the Group has
adequate financial resources to meet its obligations and
to enable it to continue as a going concern for a period of
at least twelve months from the date of the signing of the
financial statements. To assist with the lumpy nature of our
cash flow we have also agreed with BOOST&Co. to vary the
timing of these payments during 2023.
Profit and cash flow projections for the Group Company
indicate that the Group is expected to maintain profitability
in 2024. The Directors therefore continue to adopt the going
concern basis in preparing the financial statements.
Despite significant revenue growth in 2023 and forecasts for
2024, UK and global macroeconomic factors continue to
create uncertainty in the Group’s forecasts. The continued
The Company’s Articles of Association requires that each
Director retire from office and seek re-election after the
general meeting at which they were last appointed and
every year thereafter.
Directors’ interests in shares
The Directors’ beneficial interest in the ordinary share capital
of the Company are set out within the Remuneration Report
on page 34.
Substantial shareholders
As at 31 December 2023, the Company was aware of
the following major shareholders representing 3% or more
of voting rights attached to the issued ordinary share
capital of the Company.
Lombard Odier Asset Management (Europe) Limited
Chris Woodgate
IL2 (2018) – BOOST&Co.
Mr Richard Mace
Edward Roskill
SPREADEX Limited
Alan Carroll
Number of
ordinary shares
1p
3,166,721
2,005,169
1,996,187
1,844,802
1,201,754
787,400
751,826
Percentage
held
12.96%
8.20%
8.17%
7.55%
4.92%
3.22%
3.08%
Directors’ and officers’ liability
insurance and indemnity
The Company has purchased insurance to cover its
Directors and officers against their costs in defending
themselves in any legal proceedings taken against them in
that capacity and in respect of damages resulting from the
unsuccessful defence of any proceedings.
Corporate social responsibility
The Group recognises its corporate social responsibilities
and reports on these in a separate statement of social,
environmental, and ethical policies on page 27.
This statement covers the Group’s Employment Policies,
Environmental Policy, and Health and Safety Policy.
31
The maintenance and integrity of the Malvern International
Plc website is the responsibility of the Directors; the
work carried out by the auditor does not involve the
consideration of these matters and, accordingly, the auditor
accepts no responsibility for any changes that may have
occurred in the accounts since they were initially presented
on the website.
Legislation in the United Kingdom governing the preparation
and dissemination of the accounts and the other
information included in annual reports may differ from
legislation in other jurisdictions.
Auditor
Cooper Parry Group Limited (“Cooper Parry”) is the
Company’s appointed External Auditor and responsible
for auditing the Company’s financial statements for the
financial year to 31 December 2023.
Statement of disclosure to the
Independent Auditor
Each of the persons who are Directors at the time when this
Directors’ Report is approved has confirmed that so far as
that Director is aware, there is no relevant audit information
of which the Company and the Group’s auditor is unaware.
Each Director has confirmed that they have taken all
the steps that ought to have been taken as a Director in
order to be aware of any relevant audit information and
to establish that the Company and the Group’s auditor is
aware of that information.
Annual General Meeting
The resolutions to be proposed at the AGM will appear in
the Notice of the AGM together with the explanatory notes.
This will be circulated with the Annual Report when sent to
all shareholders.
ON BEHALF OF THE BOARD
Mark Elliott
Chairman
9 April 2024
Political donations
There were no political donations made by the Group
during the year (2022: none).
Directors’ responsibilities
The Directors are responsible for preparing the Annual
Report and the Group and parent company financial
statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Group and
parent company financial statements for each financial
year. Under that law the Directors have elected to prepare
the financial statements in accordance with UK adopted
international accounting standards and applicable law.
Under Company law the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent company and of their profit or loss for that period.
In preparing each of the Group and parent company
financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them
consistently
• Make judgements and estimates that are reasonable
and prudent
• State whether applicable accounting standards have
been followed, subject to any material departures
disclosed and explained in the Group and parent
company financial statements
• Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
and parent company will continue in business
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent company’s transactions and disclose with
reasonable accuracy at any time the financial position
of the parent company and enable them to ensure that
its financial statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.
The Directors are responsible for safeguarding the assets
of the Group and parent company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities. Under applicable law and
regulations, the Directors are also responsible for preparing
a Strategic Report and a Directors’ Report that comply with
that law and those regulations. They are also responsible
for ensuring that the Strategic Report and the Directors’
Report and other information included in this Annual Report
and financial statements is prepared in accordance with
applicable law in the United Kingdom.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 32 Malvern International Plc Annual Report and Accounts 2023
NOMINATION AND REMUNERATION
COMMITTEE REPORT
The Nomination and Remuneration Committee is a
standing committee of the Board of the Company and
is comprised of two Non-Executive Directors, Alan Carroll
(Chairman) and Mark Elliott.
The Committee’s primary objectives are to ensure that
remuneration arrangements are aligned with the strategy
and culture of the Company and its subsidiaries. To this end,
it ensures the Company’s remuneration policy encourages
and rewards performance against strategic priorities, as well
as the right behaviours, values, and culture.
The Committee also ensures that there is a robust
process for the appointment of new Board Directors
and senior management positions. It works closely with
the Company’s Board of Directors and external advisers
to identify the skills, experience, personal qualities, and
capabilities required for the next stage in the Company’s
development, linking the Company’s strategy to future
changes on the Board.
Within the terms of reference for the Nomination and
Remuneration Committee, as approved by the Board, the
responsibilities of the Committee are as follows:
• To consider the nomination and appointment,
remuneration and bonus plans of the Group CEO and
Group CFO
• To review any letter of resignation from the Group CEO
or Directors of the Company, and any questions of
resignation or dismissal
• To review whether there is reason (supported by
grounds) to believe that the Senior Managers of the
Group are not suitable for continued employment
• To review the statement with regard to the Remuneration
and Nomination polices of the Group for inclusion in the
Annual Report and report the same to the Board
• To consider any other functions as may be agreed
between the Committee and the Board
• To review the Board and Board Committees’
effectiveness. The Committee members keep
themselves fully informed of all relevant developments
and best practice by reference to the QCA’s
Remuneration Committee guide
Attendance at meetings
Details of attendance at meetings by the committee
members can be found on page 26.
Matters considered in 2023
During the year, the Committee considered the following
matters:
• The issuance of share options to key staff as part of the
Group incentive plan
• Review of Executive Director remuneration
Remuneration policy
Malvern aims to recruit, motivate, and retain high-
calibre Executives capable of achieving the objectives
of the Group and to encourage and reward
appropriately superior performance in a manner which
enhances shareholder value. The Company operates
a remuneration policy which ensures that there is a
clear link to business strategy and close alignment with
shareholder interests and current best practice. The policy
aims to ensure that senior executives are rewarded fairly
for, and commensurate to, their respective individual
contributions to the Group’s performance. At this point
in time the Group continues to evolve having undergone
significant reorganisation to ensure its short, medium,
and longer-term commercial viability. Remuneration
has been set at levels consistent with achieving this aim.
Accordingly, overall remuneration is below average
levels for those charged with ensuring the success of
the Group’s transition from a position of a continuum of
losses to one of consistent and growing profitability and
will be subject to regular review as the Group achieves
its targets. Details of remuneration paid to Executive
Directors are set out on page 33. Remuneration for FY2024
is at page 34.
QCA Compliance
Commencing from the next AGM the Directors’
Remuneration Report will be voted on every year.
Additionally, the Directors’ remuneration policy will also
be voted on every three years commencing with the 2025
AGM. It should be noted that in both instances the vote is
of advisory status and not binding.
Non-Executive Directors’ remuneration
The Board determines the remuneration of all Independent
Non-Executive Directors with the fees being set at a level
to attract individuals with the necessary experience and
ability to contribute to the Group. Details of all emoluments
paid to Non-Executive Directors of the Company are set
out on page 33. Remuneration for FY2024 is on page 34.
The Non-Executive Directors do not receive bonuses and
are entitled to be reimbursed for reasonable expenses
incurred by them in carrying out their duties as Directors of
the Company.
The Board, with the assistance of the Nomination and
Remuneration Committee, reviews the remuneration level
of Non-Executive Directors on an annual basis to ensure it
remains competitive in attracting suitable talent. All Board
appointments are made subject to the Company’s Articles
of Association.
33
Directors’ service contracts
Contractual arrangements for Directors are as follows:
Richard Mace
Daniel Fisher
Contractual arrangements for Non-Executive Directors are as follows:
Mark Elliott
Alan Carroll
Contract date
Notice period
30 June 2020
6 December 2021
6 months
6 months
Date of letter of
appointment
1 July 2019
2 October 2019
Notice period
1 month
1 month
In line with latest guidance on the QCA Code, all Directors are subject to re-election at the AGM every year. Accordingly,
Mark Elliott, Alan Carroll, Richard Mace, and Daniel Fisher are required to submit themselves for re-election at the next AGM.
Other than the notice periods afforded to the Directors, there are no special provisions for compensation in the event of loss
of office. The Remuneration Committee considers the circumstances of individual cases of early termination and determines
compensation payments accordingly.
Directors’ remuneration
Details of individual Directors’ emoluments and remuneration who served in 2023 are as follows:
Salary and
fees
£
110,000
30,000
50,000
90,063
280,063
Benefits
£
Pension
£
Other
£
Share-based
payments
£
Total
2023
£
Total
2022
£
—
—
—
—
—
—
—
—
—
—
—
—
1,472
111,472
111,080
—
—
1,002
2,474
30,000
50,000
91,065
30,000
50,000
83,110
282,537
274,190
Richard Mace
Alan Carroll
Mark Elliott
Daniel Fisher
Total
Share option scheme
In order to retain, incentivise and align the interests of employees with certain performance targets and strategic goals, the
Company introduced an EMI share option scheme in 2020. All options are settled in equity, automatically lapse five years
after the date of grant and generally lapse if an option holder ceases to be a Company employee.
The Company awarded 287,500 ordinary shares of 1 pence each in the capital of the Company, pursuant to the
Company’s EMI share option scheme (the “EMI Options”) to certain employees during the year. The EMI Options granted,
when added to the previously granted EMI Options of 2,140,000, represent 8.75% of the existing issued share capital of the
Company.
As at 31 December 2023 options under these schemes, including those held by Directors, were outstanding over:
2023
2022
Weighted
average
exercise
price
Options
Options
Outstanding at beginning of the year
1,965,000
15.54p
1,460,000
Issued during the year
Forfeited during the year
287,500
112,500
23.50p
575,000
—
70,000
Weighted
average
exercise
price
17.00p
10.00p
—
Outstanding at the end of the year
2,140,000
17.01p
1,965,000
15.54p
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 34 Malvern International Plc Annual Report and Accounts 2023
Nomination and Remuneration Committee Report continued
Executive Directors’ remuneration for FY2024
Richard Mace
Daniel Fisher
Bonus to be awarded on achievement of budgeted revenue and profit targets.
Non-Executive Directors’ annual fees for FY2024
Mark Elliott
Alan Carroll
Salary/Bonus £
140,000/40,000
110,000/20,000
Fees £
70,000
45,000
Directors’ interest in shares
The beneficial interests of the Directors who served during the year and their families in the ordinary share capital of the
Company are shown below:
Direct interests
Richard Mace
Alan Carroll
Mark Elliott
Daniel Fisher
Indirect interests
Marzena Mace
Louise Carroll
At beginning
of the year At end of the year
1,474,620
1,775,802
180,633
315,820
50,000
480,600
582,277
68,750
At beginning
of the year At end of the year
69,000
264,526
69,000
264,526
AUDIT AND RISK COMMITTEE REPORT
35
The Audit and Risk Committee is a sub-committee of the
Board and comprises two Non-Executive Directors, with
Mark Elliott as Chairman.
The Audit and Risk Management Committee meets
at least three times a year. The External Auditor and
Executive Directors attend when appropriate at the
invitation of the Committee. The External Auditor meets
separately with the Audit Committee on request, without
the presence of the Executive Directors, to ensure open
communication. The primary objectives of the Committee
are to assist the Board in discharging its Statutory duties
and responsibilities relating to the accounting and financial
reporting practices of the Group and to assist the Board
in their responsibilities to identify, assess, and monitor key
business risks to mitigate adverse impacts on achieving
strategic objectives with a view to safeguard shareholders’
investments and the Group’s assets. In addition, the
Committee assists the Board in:
• Complying with specified accounting standards and
required disclosure as administered by AIM, relevant
accounting standards bodies, and any other laws and
regulations as amended from time to time
• Presenting a balanced and understandable assessment
of the Group’s position and prospects
• Establishing a formal and transparent arrangement
for maintaining an appropriate relationship with the
Company’s auditor, and overseeing and appraising the
quality of audit conducted by the Company’s External
Auditor and reviewing the independence of the
External Auditor
• Determining the adequacy of the Group’s
administrative, operating, accounting, and financial
controls and internal controls
Attendance at meetings
Attendance at the meetings can be found in the table on
page 26.
External Auditor
In order to ensure an appropriate balance between
audit quality, objectivity and independence, and cost
effectiveness, the Audit and Risk Management Committee
reviews the nature of all services, including non-audit
work, provided by the External Auditor each year. In 2023,
the Company reappointed Cooper Parry Group Limited
(Cooper Parry) as its auditor in order to conduct the audit
of the Company’s financial statements for the financial
year to 31 December 2023.
Significant issues relating to the financial
statements and Board reporting
The Audit Committee reviewed the following issues for the
year under review:
• Review of the information provided to monthly Board
meetings
• Reviewed the Annual and Interim Report and financial
statements of the Group, and the clarity of disclosures
made
• Oversaw the relationship with the External Auditor,
including a review of the External Auditor’s findings
during the audit in relation to the year ended
31 December 2023
• Reviewed the Group’s Risk Register
• Reviewed the External Auditor’s Audit Plan in relation to
the year ended 31 December 2023
Going concern
The Committee reviewed forecasts and analysis prepared
by executive management in support of the Going
Concern Statement and agreed with management’s
approach and findings.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 36 Malvern International Plc Annual Report and Accounts 2023
36 Malvern International Plc Annual Report and Accounts 2023
FINANCIAL
STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF MALVERN INTERNATIONAL PLC
37
Opinion
We have audited the financial statements of Malvern
International plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December
2023 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and Company
Statements of Financial Position, the Consolidated
and Company Statements of Changes in Equity, the
Consolidated and Company Statements of Cash Flows
and the related notes to the financial statements, including
a summary of significant accounting policies.
The financial reporting framework that has been applied
in the preparation of the financial statements is applicable
law and UK adopted international accounting standards.
In our opinion the financial statements:
• give a true and fair view of the state of the group’s and
of the parent company’s affairs as at 31 December 2023
and of the group’s loss for the year then ended;
• have been properly prepared in accordance with UK
adopted international accounting standards; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We
are independent of the group and parent company
in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Our approach to the audit
In order to assess the risks identified, the engagement team
performed an evaluation of identified components and to
determine the planned audit responses based on a measure
of materiality, calculated by considering the significance of
components as a percentage of the group’s total revenue
and loss before taxation and the group’s total assets.
The group audit was scoped by obtaining an understanding
of the group and its environment, including the group’s
system of internal control, and assessing the risks of material
misstatement in the financial statements. We also addressed
the risk of management override of internal controls,
including assessing whether there was evidence of bias by
the Directors that may have represented a risk of material
misstatement.
In establishing the overall approach to the group audit,
we assessed the audit significance of each reporting unit
in the group by reference to both its financial significance
and other indicators of audit risk, such as the complexity of
operations and the degree of estimation and judgement in
the financial results. We identified three individually significant
components.
We performed a full-scope audit of the financial statements
of the parent company, Malvern International plc, and the
two UK trading subsidiaries, providing 100% coverage of
revenues and results before tax for these components. The
operations that were subject to full-scope audit procedures
made up 100% of consolidated revenues, 100% of total assets
and 100% of consolidated loss before taxation. Malvern
House Group Limited is subject to review-scope audit
procedures which made up £Nil of the consolidated revenue,
£Nil of total assets and £Nil loss of consolidated loss before
tax. We applied analytical procedures to the Statements
of Financial Position and Income Statements of the entities
comprising the remaining operations of the group, focusing
on applicable risks identified as above, and their significance
to the group’s balances.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current year and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy,
the allocation of resources in the audit, and directing
the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these
matters.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 38 Malvern International Plc Annual Report and Accounts 2023
Independent Auditor’s Report continued
Risk Description
Revenue recognition:
As detailed in note 3 to the financial statements, Significant
Accounting Policies, the group’s revenue is generated
from the provision of education services and comprises a
number of related income streams.
Due to the timing of course payments there is often an
element of deferred income arising from differences
between the timings of cash flows and provision of services.
As a result, there is some complexity with regards to revenue
recognition for the group.
Going concern
The group has been heavily impacted by the global
pandemic and resulting restrictions, in particular the travel
restrictions which impacted student numbers attending
courses. The group is further impacted by general
macroeconomic conditions, such as the cost of living crisis,
and continues to be loss making.
Our response to the risk
We have assessed accounting policies for appropriateness
and consistency with the financial reporting framework
and in particular that revenue was recognised when
performance obligations were fulfilled.
We have obtained an understanding of processes through
which the businesses initiate, record, process and report
revenue transactions.
We performed walkthroughs of the processes as set out by
management, to ensure controls appropriate to the size
and nature of operations are designed and implemented
correctly throughout the transaction cycle.
A sample of course bookings throughout the year have
been vouched from the booking system to attendance
records, sales invoices and to nominal postings, including
recalculating any deferred income required at year end
across the trading subsidiaries.
We tested for understatement of deferred income in sales
transaction testing and for overstatement of deferred
income in valuation testing of liabilities.
Manual journals impacting revenue nominal codes have
been selected for further testing when certain risk criteria
have been met.
We performed analytical review of revenue against the
prior year and any known expectations.
Our procedures did not identify any material misstatements
in the revenue recognised during the year.
We have obtained the assessment made by management
and the Board regarding the group’s ability to continue as
a going concern.
We have reviewed the letter of support provided by third
parties.
We have reviewed the assumptions used in management’s
assessment and sensitised key assumptions used.
We reviewed debt agreements currently in place to assess
compliance with repayment terms.
We discussed with management and the Board any
additional industry factors or other issues which could
impact the group’s ability to continue as a going concern.
We reviewed the relevant disclosures included in the Annual
Report for consistency with our knowledge of the business.
We concur with management’s assessment that the
business is a going concern, but draw attention to the
material uncertainty highlighted within our audit report.
39
Risk Description
Valuation of non-current assets
The group balance sheet has a goodwill asset of £1.4m
as well as right-of-use assets of £1.9m. Since the group
continues to be loss making and there remain challenging
economic conditions, judgement continues to exist in
respect of recoverability of non-current assets, as well as
significant levels of estimation involved in the calculation of
their value in use.
Our response to the risk
We have obtained and reviewed the impairment review
prepared by management in relation to non-current assets.
We have assessed the key assumptions used in those
impairment review calculations, being, the discount rate
applied, and growth assumptions within trading forecasts,
by comparing to industry data and historical group financial
performance.
We have performed sensitivity analysis over the key
assumptions listed above and reviewed available
headroom and/or indications of impairment arising from the
use of different assumptions.
We have reviewed the completeness and consistency of
disclosures in relation to non-current assets within the annual
report.
Overall, based on the findings from our audit procedures,
we are comfortable that the carrying values of goodwill
and non-current assets on the consolidated balance sheet
are not impaired as at 31 December 2023.
Our application of materiality
We apply the concept of materiality in planning and
performing our audit, in determining the nature, timing and
extent of our audit procedures, in evaluating the effect
of any identified misstatements, and in forming our audit
opinion.
The materiality for the group financial statements as a
whole was set at £173,800. This has been determined with
reference to the benchmark of the group’s revenue which
we consider to be an appropriate measure for a group
of companies such as these. Materiality represents 1.5%
of group revenue. Performance materiality has been set
at 80% of group materiality. We agreed to report to the
Audit Committee any corrected or uncorrected identified
misstatements exceeding £8,700, in addition to other
identified misstatements that warranted reporting on other
qualitative grounds.
The materiality for the parent company financial
statements as a whole was set at £43,900 and
performance materiality represents 80% of materiality.
This has been determined with reference to the parent
company’s net assets, which we consider to be an
appropriate measure for a holding company with
investments in trading subsidiaries. Materiality represents
1% of net assets as presented on the face of the parent
company’s Statement of Financial Position.
Material uncertainty relating to going
concern
We draw attention to note 2 (v) in the financial statements
which indicates that due to the current and developing
impact on the business of the current UK and worldwide
macroeconomic environment, these circumstances create
uncertainty in the profit and cash flow projections of the
group. As stated in note 2 (v), these events or conditions,
along with other matters set out in note 2 (v), indicate
that a material uncertainty exists that may cast significant
doubt on the group’s ability to continue as a going
concern. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate. Our evaluation of the directors’ assessment
of the group’s and parent company’s ability to continue to
adopt the going concern basis of accounting included:
• Challenging management on key assumptions included
in their forecasts including performing sensitivity analysis;
• Considering the potential impact of forecast scenarios
on the forecast cash position;
• Reviewing debt agreements currently in place to
check terms have been appropriately considered and
modelled in the cash flow forecasts;
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 40 Malvern International Plc Annual Report and Accounts 2023
Independent Auditor’s Report continued
• Reviewing the letter of support provided by third parties;
• Reviewing management’s disclosures in the financial
statements.
From our work we noted that the group has positive
cash balances and forecasts indicate that the group will
continue to be able to meet its liabilities as they fall due.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in
the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible
for the other information included in the annual report.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read
the other information and, in doing so, consider whether
the other information is materially inconsistent with the
financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there
is a material misstatement in the financial statements or a
material misstatement of the other information. If, based
on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed
by the Companies Act 2006
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
• the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to
report by exception
In the light of the knowledge and understanding of the
group and the parent company and their environment
obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company financial statements are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified
by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 40, the directors are responsible
for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and
for such internal control as the directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error. In preparing the financial
statements, the directors are responsible for assessing the
group’s and the parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
41
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the parent company’s
members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has
been undertaken so that we might state to the parent
company’s members those matters we are required
to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the
parent company and the parent company’s members as
a body, for our audit work, for this report, or for the opinions
we have formed.
Katharine Warrington
Senior Statutory Auditor
For and on behalf of Cooper Parry Group Limited
Chartered Accountants and Statutory Auditor
Sky View
Argosy Road
East Midlands Airport
Castle Donington
Derby
DE74 2SA
Date: 9 April 2024
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is
detailed below:
Our assessment focused on key laws and regulations
the group has to comply with and areas of the financial
statements we assessed as being more susceptible to
misstatement. These key laws and regulations included but
were not limited to compliance with the Companies Act
2006, UK adopted international accounting standards, and
relevant tax legislation.
We are not responsible for preventing irregularities. Our
approach to detecting irregularities included, but was not
limited to, the following:
• obtaining an understanding of the legal and regulatory
framework applicable to the entity and how the entity
is complying with that framework;
• obtaining an understanding of the entity’s policies and
procedures and how the entity has complied with these,
through discussions and sample testing of controls;
• obtaining an understanding of the entity’s risk
assessment process, including the risk of fraud;
• designing our audit procedures to respond to our risk
assessment; and
• performing audit testing over the risk of management
override of controls, including testing of journal entries
and other adjustments for appropriateness, evaluating
the business rationale of significant transactions
outside the normal course of business and reviewing
accounting estimates for bias.
Whilst considering how our audit work addresses the
detection of irregularities, we also consider the likelihood
of detection based on our approach. Irregularities arising
from fraud are inherently more difficult to detect than
those arising from error.
Because of the inherent limitations of an audit, there is
a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial
statements or non-compliance with regulation. This risk
increases the more that compliance with law or regulation
is removed from the events and transactions reflected in
the financial statements, as we will be less likely to become
aware of non-compliance. The risk is also greater regarding
irregularities occurring due to fraud rather than error, as
fraud involves intentional concealment, forgery, collusion,
omission or misrepresentation.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 42 Malvern International Plc Annual Report and Accounts 2023
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Underlying
£
Note
2023
Non-
Underlying
£
2022
Non-
Statutory
£
Underlying
£
Underlying
£
Statutory
£
4 10,650,073
671,767 11,321,840
5,695,287
639,739
6,335,026
4
936,089
—
936,089
176,576
—
176,576
11,586,162
671,767 12,257,929
5,871,863
639,739
6,511,602
Revenue
Sale of services
Agent commission
Total revenue
Direct costs
Cost of services sold
(5,191,668)
(429,722)
(5,621,390)
(3,029,539)
(330,130)
(3,359,669)
Agent commission expense
(893,784)
(21,473)
(915,257)
(175,988)
(22,791)
(198,779)
Total direct costs
Gross profit
Other income
Salaries and employee benefits
(6,085,452)
(451,195)
(6,536,647)
(3,205,527)
(352,921)
(3,558,448)
5,500,710
220,572
5,721,282
2,666,336
286,818
2,953,154
5
6
51,631
—
51,631
81,831
2,913
84,744
(2,694,714)
(191,125)
(2,885,839)
(1,887,222)
(176,141)
(2,063,363)
Depreciation of plant and equipment
12
(311,314)
(223,964)
(535,278)
(325,879)
(46,578)
(372,457)
Other operating expenses
8
(2,040,566)
(259,128)
(2,299,694)
(1,327,653)
(59,427)
(1,387,080)
Share-based payments
Operating profit/(loss)
Finance costs
Profit/(loss) before tax
Income tax charge
Profit/(Loss) for the year being total
comprehensive income/(expenses)
attributable to owners of the parent
26
—
(5,133)
(5,133)
—
(3,745)
(3,745)
7
9
505,747
(458,778)
46,969
(792,587)
3,840
(788,747)
(359,921)
168,170
(191,751)
(276,801)
(18,285)
(295,086)
145,826
(290,608)
(144,782)
(1,069,388)
(14,445)
(1,083,833)
—
(15,256)
(15,256)
—
—
—
145,826
(305,864)
(160,038)
(1,069,388)
(14,445)
(1,083,833)
Underlying
£
Note
2023
Non-
Underlying
£
2022
Non-
Statutory
£
Underlying
£
Underlying
£
Statutory
£
145,826
(305,864)
(160,038)
(1,069,388)
(14,445)
(1,083,833)
Total comprehensive income/(expense)
for the year
Attributable to:
Equity holders of the parent
145,826
(305,864)
(160,038)
(1,069,388)
(14,445)
(1,083,833)
Underlying
£
Note
2023
Non-
Underlying
£
2022
Non-
Statutory
£
Underlying
£
Underlying
£
Statutory
£
Profit/(loss) per share attributed to equity
holders of the Company (in pence)
Basic
Diluted
10
10
0.60
0.60
(1.19)
(1.19)
(0.59)
(0.59)
(4.88)
(4.88)
(0.07)
(0.07)
(4.95)
(4.95)
The notes on pages 49 to 73 form an integral part of these financial statements.
CONSOLIDATED AND COMPANY STATEMENT OF
FINANCIAL POSITION
43
Note
Group
2023
£
Group
2022
£
Company
2023
£
Company
2022
£
TOTAL ASSETS
Non-current assets
Property, plant, and equipment
Goodwill
Investment in subsidiaries
Right-of-use assets
Total non-current assets
Current assets
Trade receivables
Other receivables and prepayments
Amounts due from subsidiaries
Cash and cash equivalents
Inventories
Total current assets
Total assets
12
14
13
12
15
16
17
68,310
30,662
1,419,350
1,419,350
—
—
—
—
—
1,419,350
1,419,350
—
1,710,534
3,198,194
440,541
918,994
—
2,215,076
3,665,088
405,051
1,135,990
—
2,196,499
1,181,631
8,166
3,564,200
6,762,394
—
2,722,672
6,387,760
—
—
1,419,350
1,419,350
—
116,485
70,403
2,273
—
189,161
—
41,771
—
13,101
—
54,872
1,608,511
1,474,222
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
44 Malvern International Plc Annual Report and Accounts 2023
Consolidated and Company Statement of Financial Position continued
Note
Group
2023
£
Group
2022
£
Company
2023
£
Company
2022
£
EQUITY AND LIABILITIES
Non-current liabilities
Term Loan
Warrants
Lease liabilities
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade payables
Contract liabilities
Other payables and accruals
Amounts due to subsidiary
Lease liabilities
Term Loan
Total current liabilities
Total liabilities
Equity attributable to equity holders of the
Company
Share capital
Share premium
Other reserves
Retained earnings
Total equity
21
21
21
9
17
18
19
21
21
22
23
23
1,811,784
2,052,808
1,765,039
1,997,540
415,281
189,762
415,281
189,762
2,086,428
2,624,792
—
10,279
—
—
—
—
4,313,493
4,877,641
2,180,320
2,187,302
1,495,664
2,460,265
1,523,053
—
418,267
313,484
416,944
2,199,570
1,640,517
96,730
—
184,781
788
—
96,984
—
3,410,452
1,262,410
450,726
436,341
6,210,733
5,144,098
10,524,226
10,021,739
—
296,236
3,988,199
6,168,519
—
415,044
1,775,226
3,962,528
11,323,899*
11,323,899*
11,323,899*
11,323,899*
6,797,950
6,797,950
6,797,950
6,797,950
12,190*
7,057*
12,190*
7,057*
(21,895,871)
(21,762,885)
(22,694,047)
(20,617,212)
(3,761,832)
(3,633,979)
(4,560,008)
(2,488,306)
Total equity and liabilities
6,762,394
6,387,760
1,608,511
1,474,222
*
The share-based payments are reclassed to other reserves from the share capital and share capital figures are restated.
The Statutory loss for the year as per the financial statements of the parent company at 31 December 2023 was £2,076,836
(2022: Loss £1,185,496).
The notes on pages 49 to 73 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 9 April 2024 and were signed on its behalf by:
Richard Mace
Director
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
45
Balance at 1 January 2022
11,213,679
6,603,839 (20,679,052)
3,312
28,822
(2,829,400)
Share
Capital*
£
Share
Premium
£
Retained
Earnings
£
Other
Reserves
Convertible
loan note
reserve
£
Total
£
Direct costs relating to issue of shares
Total comprehensive expense for the year
Convertible loan note reserve transferred to
share premium
—
—
—
(24,500)
—
— (1,083,833)
28,822
New share issue
25,009
175,000
Share-based payments (EMI Options)
—
—
Convertible loan notes
85,211
14,789
—
(24,500)
— (1,083,833)
(28,822)
—
3,745
—
—
—
200,009
3,745
100,000
—
—
—
—
Balance at 31 December 2022
11,323,899
6,797,950 (21,762,885)
7,057
— (3,633,979)
Total comprehensive expenses for the year
Add: tax adjustments for prior years
Share-based payments (EMI Options)
—
—
—
—
—
(160,038)
27,052
—
5,133
—
—
—
(160,038)
27,052
5,133
Balance at 31 December 2023
11,323,899
6,797,950 (21,895,871)
12,190
— (3,761,832)
*
The Share-based payments are reclassed to other reserves from the share capital and share capital figures are restated.
The notes on pages 49 to 73 form an integral part of these financial statements.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
46 Malvern International Plc Annual Report and Accounts 2023
COMPANY STATEMENT OF
CHANGES IN EQUITY
Balance at 1 January 2022
11,213,679
6,603,839 (19,431,716)
3,312
28,822
(1,582,064)
Share
Capital*
£
Share
Premium
£
Retained
Earnings
£
Other
Reserves
Convertible
loan note
reserve
£
Total
£
Direct costs relating to issue of shares
Total comprehensive expense for the year
New share issue
Convertible loan notes
Convertible loan note reserve transferred to
share premium
New share from share-based payments
(incl. EMI Options)
—
—
25,009
85,211
—
—
(24,500)
—
— (1,185,496)
175,000
14,789
28,822
—
—
—
—
—
Balance at 31 December 2022
11,323,899
6,797,950 (20,617,212)
New share from share-based payment
(incl. EMI Options)
Total comprehensive expense for the year
—
—
—
—
—
—
—
—
3,745
7,057
5,133
—
(24,500)
— (1,185,496)
—
—
200,009
100,000
(28,822)
—
—
3,745
— (2,488,306)
—
5,133
Balance at 31 December 2023
11,323,899
6,797,950 (22,694,047)
12,190
— (4,560,008)
*
The share-based payment are reclassed to other reserves from the share capital and share capital figures are restated.
The notes on pages 49 to 73 form an integral part of these financial statements.
— (2,076,835)
—
— (2,076,835)
CONSOLIDATED STATEMENT OF CASH FLOWS
47
Cash flows from operating activities
Loss after income tax from
Adjustments for:
Depreciation of tangible assets
Fair value movements – warrants
Fair value movements – loan write-back
Share-based payments
Profit/(loss) on disposal of tangible assets
Loss on disposal of discontinued operations
Impairment of trade receivables
Increase in stocks
Finance cost
Interest paid
Tax paid
Changes in working capital:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net cash flows used in operating activities
Cash flows from investing activities
Purchases of property, plant, and equipment
Net cash used in investing activities
Cash flows from financing activities
Repayment of lease liabilities
New equity issued
Additional loan
Term Loan
Net cash generated by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Exchange losses on cash and cash equivalents
Cash and cash equivalents at the end of the year
The notes on pages 49 to 73 form an integral part of these financial statements.
2023
£
2022
£
(160,038)
(1,083,833)
523,938
225,518
(94,216)
5,133
1,141
—
23,116
(8,166)
191,752
(142,610)
16,771
372,457
(40,019)
—
3,745
504
—
113,583
—
295,086
(41,117)
—
582,339
(379,594)
158,389
1,219,396
1,960,124
(58,184)
(58,184)
(557,017)
—
43,679
(373,734)
(887,072)
1,014,868
1,181,631
—
(659,746)
2,171,471
1,132,131
(14,545)
(14,545)
(473,359)
175,509
—
(15,275)
(313,125)
804,461
377,170
—
2,196,499
1,181,631
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
48 Malvern International Plc Annual Report and Accounts 2023
COMPANY STATEMENT OF CASH FLOWS
Cash outflows from operating activities
Loss before income tax
Share-based payments
Fair value movements – warrants
Fair value movements – loan write-back
Finance cost
Interest paid
Change in working capital
(Increase)/decrease in receivables
Increase/(decrease) in payables
Decrease in amounts due from subsidiaries
Net cash used in operating activities
Cash flows from financing activities
Repayment of Term Loan
New loan
New equity issued
Net cash used in financing activities
Cash flows from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 49 to 73 form an integral part of these financial statements.
2023
£
2022
£
(2,076,836)
(1,185,496)
5,133
225,518
(94,216)
58,609
—
3,745
(40,019)
—
90,701
(27,500)
(1,881,792)
(1,158,569)
(74,714)
183,739
71,018
(209,435)
2,077,641
1,088,877
304,874
(208,109)
(359,381)
43,679
—
(315,702)
—
—
175,509
175,509
(10,828)
(32,600)
13,101
2,273
45,701
13,101
NOTES TO THE FINANCIAL STATEMENTS
49
1. General information
Malvern International Plc (the “Company”) is a public limited company incorporated in England and Wales on 8 July 2004.
The Company was admitted to the AIM on 10 December 2004. Its registered office is 3rd Floor 1 Ashley Road, Altrincham,
Cheshire, United Kingdom, WA14 2DT. The registration number of the Company is 05174452.
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. The specific principal activities of the subsidiary
companies are set out in note 13 to the financial statements. There have been no significant changes in the nature of these
activities during the year.
2. Significant accounting policies
i. Basis of preparation
These financial statements of the Group and Company are prepared on a going concern basis, in accordance with
International Financial Reporting Standards (“IFRS”) and IFRIC interpretations issued by the International Accounting Standards
Board (“IASB”) and adopted by the United Kingdom, in accordance with the Companies Act 2006.
The parent company’s financial statements have also been prepared in accordance with UK-adopted 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.
ii. Basis of consolidation
The Group financial statements consolidate the accounts of Malvern International Plc and all of its subsidiary undertakings
made up to 31 December 2023. The Consolidated Statement of Comprehensive Income includes the results of all subsidiary
undertakings for the period from the date on which control passes. Control is achieved where the Company (or one of
its subsidiary undertakings) obtains the power to govern the financial and operating policies of an investee entity so as to
derive benefits from its activities.
iii. New Standards adopted for the year ended 31 December 2023
The following amendments to Standards were applicable during the year but did not have a material impact on the Group:
•
Amendments to IAS 1 Presentation of Financial Statements
•
Amendments to IAS 12 Income Taxes—Deferred Tax related to Assets and Liabilities arising from a Single Transaction
•
Amendments to IAS 12 Income Taxes— International Tax Reform—Pillar Two Model Rules
•
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors—Definition of Accounting Estimates
Standards, amendments, and Interpretations to existing Standards that are not yet effective and have not been adopted
early by the Group.
At the date of authorisation of these financial statements, several new, but not yet effective, Standards, amendments
to existing Standards, and Interpretations have been published by the IASB. None of these Standards, amendments,
or Interpretations have been adopted early by the Group.
Management anticipate that all relevant pronouncements will be adopted for the first period beginning on or after the
effective date of the pronouncement. New Standards, amendments, and Interpretations not adopted in the current year
have not been disclosed as they are not expected to have a material impact on the Group’s financial statements.
iv. Alternative performance measures (“APMs”)
The consolidated financial statements include APMs as well as Statutory measures. The APMs used by the Group are not
defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies.
They are not intended to be a substitute for, or superior to, IFRS measures. All APMs relate to the current year results and
comparative periods where provided. This presentation is also consistent with the way that financial performance is measured
by management and reported to the Board, the basis of financial measures for senior management’s compensation
schemes, and provides supplementary information that assists the user in understanding the financial performance, position,
and trends of the Group. See note 11 for a reconciliation of Statutory information to Underlying information.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
50 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
v. Going concern
The financial statements have been prepared on a going concern basis. The Directors consider the going concern basis to
be appropriate having paid due regard to the Group and Company’s projected results during the twelve months from the
date the financial statements are approved and the anticipated cash flows, availability of loan facilities, and mitigating
actions that can be taken during that period.
As forecast, the Group produced a Underlying profit for the year, £145,826 (2022: Underlying loss £1,069,388).
The significant revenue growth seen in H2 2023, in combination with the visibility of University Pathways revenue in H1 2024,
gives the Board confidence in Malvern’s short- and long-term prospects.
In the Pathways division, student numbers are up 59% on the prior academic year (2022/23 vs 2023/24), which reflects the
ongoing investment in this division. Junior summer camps continue to experience rapid growth, delivering £3.7m (2022:
£1.3m) in revenue to the Group in 2023. Pre-bookings for 2024 summer camps are also very encouraging, c.£6.5m is forecast,
which gives the Directors further confidence in both profit and cash flow predictions.
The Group generated sufficient cash during the year to begin reducing the BOOST&Co. debt from £2.6m to £2.2m.
BOOST&Co., acting on behalf of IL2 (2018) Sarl, have again provided a letter of comfort to provide ongoing financial
support to the Group for any short-term working capital requirement should that become necessary. It is the present policy
of BOOST&Co. to ensure that the Group has adequate financial resources to meet their obligations and to enable it to
continue as a going concern for a period of at least twelve months from the date of the signing of the financial statements.
To assist with the lumpy nature of our cash flow, we have also agreed with BOOST&Co. to vary the timing of these payments
during 2024.
Profit and cash flow projections for the Group indicate that the Group is expected to maintain profitability in 2024. The
Directors therefore continue to adopt the going concern basis in preparing the financial statements.
Despite significant revenue growth in 2023 and forecasts for 2024, UK and global macroeconomic factors continue to create
uncertainty in the Group’s forecasts. The continued commitment from the Group’s lenders in the form of the letter of support
provides confidence to the Group in respect of future funding. However, there still remains a material uncertainty with
respect to the going concern status of the Group.
vi. Basis of consolidation
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if
all three of the following elements are present: power over the investee, exposure to variable returns from the investee,
and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and
circumstances indicate that they may be a change in any of these elements of control.
On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date
of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised
as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e.
discount on acquisition) is credited to the Consolidated Statement of Comprehensive Income in the year of acquisition.
The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement of
Comprehensive Income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies
used into line with those used by the Group. All significant intra-group transactions, balances, income, and expenses are
eliminated on consolidation.
vii. Subsidiary company
Investment in subsidiaries is stated in the financial statements of the Company at cost less any provision for impairment losses.
The financial statements of subsidiaries acquired are consolidated in the financial statements of the Group from the date that
control commences until the date control ceases, using the acquisition method of accounting.
viii. Functional and presentational currency
The consolidated financial statements have been presented with Pounds Sterling as the presentational currency, as the
Company is incorporated in England and Wales with Sterling denominated shares which are traded on the Alternative
Investment Market (“AIM”).
51
Items included in the financial statements of each subsidiary of the Group are measured using the currency of the primary
economic environment in which the subsidiary operates (“the functional currency”). The primary functional currency of the
Group is UK Pound Sterling.
ix. Foreign currency translation
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Foreign currency
monetary assets and liabilities are translated using the exchange rate prevailing at the date of the Statement of Financial
Position. Non-monetary assets and liabilities are measured using the exchange rates prevailing at the transaction dates,
or in the case of the items carried at fair value, the exchange rates ruling when the values were determined. Foreign
exchange gains and losses resulting from the settlement of foreign currency transactions and translation of foreign
currency denominated assets and liabilities are recognised in the Statement of Comprehensive Income.
Assets and liabilities of the entities having functional currency other than the presentational currency are translated into
Sterling equivalents at exchange rates ruling at the Statement of Financial Position date. Revenues and expenses are
translated at average exchange rates for the year, which approximates the exchange rates at the dates of transactions.
All resultant differences are taken directly to equity. On disposal of a foreign entity, accumulated exchange differences
were recognised in the Statement of Comprehensive Income as part of the gain or loss on disposal.
x. Property, plant, and equipment
Property, plant, and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation
policy, useful lives, and residual values are reviewed at least annually, for all asset classes to ensure that the current method
is the most appropriate.
Expenditure incurred after the property, plant, and equipment have been put into operation, such as repairs and
maintenance, are charged to the Statement of Comprehensive Income. Expenditure for additions, improvements, and
renewals is capitalised when it can be clearly demonstrated that the expenditure has resulted in an increase in the future
economic benefits expected to be realised from the use of the items of property, plant, and equipment beyond their
originally assessed standard of performance.
Depreciation is calculated based on the straight line method to write off the cost of property, plant, and equipment less their
estimated residual value over their estimated useful economic lives as follows:
• Classroom and office equipment is depreciated over 3 to 10 years according to the estimated life of the asset
• Leasehold improvements are depreciated over the period of the lease up to a maximum of 25 years
• Property with lease terms of 50 years of less are depreciated over the remaining period of the lease
xi. Impairment of tangible and intangible assets excluding goodwill
An assessment is made at Statement of Financial Position date as to whether there is any indication of impairment of any
asset, or whether there is any indication that an impairment loss previously recognised for an asset in prior years may no
longer exist or may have decreased. If any such indication exists, the asset’s recoverable amount is estimated. An asset’s
recoverable amount is calculated as the higher of the asset’s value in use or its fair value less costs to sell. Value in use is the
present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at
the end of its useful life.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. An impairment loss
is charged to the Statement of Comprehensive Income in the period in which it arises unless the relevant asset is carried at a
revalued amount in which case the impairment loss is treated as a revaluation decrease.
A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine
the recoverable amount of an asset, however not to an amount higher than the carrying amount that would have been
determined (net of any depreciation) had no impairment loss been recognised for the asset in prior years.
A reversal of an impairment loss is credited to the Statement of Comprehensive Income in the year in which it arises unless
the relevant asset is carried at a revalued amount in which case the impairment loss is treated as a revaluation increase.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 52 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
xii. Goodwill
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities, and contingent liabilities recognised.
After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating sub-groups expected
to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of
the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount
of each asset in the unit. An impairment loss recognised for goodwill is not reversed in subsequent years.
xiii. Financial assets, loans, and receivables
Financial assets
Financial assets are recognised on the Statement of Financial Position when the Group becomes a party to the contractual
provisions of the instrument. Financial assets are initially recognised at fair value plus, in the case of financial assets not at fair
value through profit or loss, directly attributable transaction costs. Financial assets are amortised when the contractual rights
to the cash flows from the financial assets have expired or have been transferred. On de-recognition of a financial asset
in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in the
Statement of Comprehensive Income.
Financial assets at amortised cost
Financial assets held within a business model whose objective is to collect contractual cash flows which are solely payments
of principals and interest are classified and subsequently measured at amortised cost using the effective interest method,
less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term
receivables when the recognition of interest would be immaterial. The Group’s financial assets at amortised cost comprise
“trade and other receivables”, related parties, and cash and cash equivalents included in the Consolidated Statement of
Financial Position.
xiv. Impairment of financial assets
The Group assesses the expected credit losses for all debt instruments (other than those categorised at fair value through
profit or loss) on a forward-looking basis.
An impairment loss in respect of financial assets is recognised in the Statement of Comprehensive Income and is measured
as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at
the financial asset’s original effective interest rate. In a subsequent period, if the amount of the impairment loss decreases
and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed through the Statement of Comprehensive Income.
The Group has adopted the simplified expected credit loss model for its trade receivables and contract assets, as required
by IFRS 9 to assess impairment, for further information see note 15.
xv. Revenue recognition
Revenue is recognised on the following basis:
Courses are provided over time based on period stated on the contract with students. As such revenue for various services is
recognised in the following way:
•
•
•
Course/accommodation fees – revenue is spread over the duration of the course as stated in the contract, as this
fairly represents the value of services provided. Deposits received in respect of future courses/accommodation fees
are treated as deferred income at the point of receipt. Contract liabilities relate to course and accommodation fees
received in advance and are recognised in the Statement of Comprehensive Income based on classes conducted and
accommodation provided
Agent commission income – agent commission income is spread over the duration of the course as stated in the
contract, as this fairly represents the value of services provided
Registration/application/examination fees/course materials – revenue is spread over the duration of the course as stated
in the contract, as this fairly represents the value of services provided
•
Student activities are recognised at the point in time that the activity takes place
53
The transaction price is the course fee net of any discounts and third-party commission. Any variable consideration is
constrained in estimating contract revenue as is highly probable that there will not be a future reversal in the amount of
revenue recognised when the final amounts of any variations have been determined.
In certain circumstances refunds may be granted as per the Group’s refunds terms and conditions. Consideration will be
given to the length of the course studied. Deferred income is adjusted for any undelivered study. In some cases, a course
may be deferred.
Students are required to pay fees in advance unless a payment plan has been agreed.
xvi. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank deposits with an initial maturity of less than three months. Bank
overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the Statement of Cash Flows.
xvii. Trade and other payables
Trade and other payables, which are normally settled on 30 to 90-day term, are initially measured at fair value, and
subsequently measured at amortised cost, using the effective interest method.
xviii. Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax movements.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the Statement
of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax
rates and tax laws that have been enacted or substantively enacted in countries where the Company and its subsidiaries
operate by the Statement of Financial Position.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised
for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associated
companies, except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each Statement of Financial Position date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset
realised based on tax rates and tax laws that have been enacted or substantially enacted by the Statement of Financial
Position date. Deferred tax is charged or credited to the Statement of Comprehensive Income, except when it relates to
items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
xix. Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.
Provisions are reviewed regularly and adjusted to reflect the current best estimate. Where the effect of the time value of
money is material, the amount of provision is the present value of the expenditures expected to be required to settle the
obligation.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 54 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
xx. Employees’ benefits
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the Statement of Comprehensive Income as
incurred.
Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the
estimated liability for annual leave because of services rendered by employees up to the year end.
xxi. Equity instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are
deducted against share premium.
Where ordinary shares will be issued as part of deferred purchase consideration then:
•
Where the number of shares to be issued has been fixed, then such deferred consideration will be classified as equity
• Where the number of shares to be issued is dependent on certain performance criteria being met, then such deferred
consideration will be classified as liability at inception
xxii. Borrowing costs
Borrowing costs incurred to finance the development of property, plant, and equipment are capitalised during the period that is
required to complete and prepare the asset for its intended use. The capitalised costs are depreciated over the useful life of the
property, plant, and equipment.
Other borrowing costs, including interest cost and foreign exchange differences, on short-term borrowings are recognised on a
time-apportioned basis in the Statement of Comprehensive Income using the effective interest method.
xxiii. Segmental reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
All operating segments’ operating results are regularly reviewed by the Board to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete financial information is available.
Segmental results are reported to the Board and include items directly attributable to the segment as well as those that can
be allocated on a reasonable basis.
xxiv. Warrants
In certain circumstances the Group will issue warrants over shares. The warrants currently in issue are carried at fair value
through profit and loss (“FVPL”) and are categorised under level 3 of the fair value hierarchy. The judgements and estimates
made in respect of calculating the fair value for these warrants are disclosed further in this section.
xxv. Share-based payments and share options
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value
of the equity instruments at the grant date. The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight line basis over the vesting period, based on the Group’s estimate or the probability of
equity instruments eventually vesting, with a corresponding increase in equity. Fair value is measured using a Black-Scholes
and Monte Carlo pricing model as appropriate, according to the nature of the relevant scheme. The resulting charge to the
Statement of Comprehensive Income requires assumptions to be made regarding future events and market conditions. Due
to the complexity of the Monte Carlo model, the Group utilises a third-party option valuation service to run the simulation.
The number of options expected to vest is adjusted only for expectations of leavers prior to vesting. The impact of the
revision of the original estimates, if any, is recognised in the Statement of Comprehensive Income such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the
goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured
at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty
renders the service.
See note 26 for additional information on these schemes.
55
xxvi. Other income
Other income relates to all income not incurred in the ordinary trading activities of the Group.
Rental and related income is recognised on an accruals basis in the period it relates to.
Research and development credits are recognised in the period the benefit is received as that is considered to be the point
at which the amount can be reliably estimated.
Grants are accounted under the accruals model. Grants of a revenue nature are recognised in the Consolidated Statement
of Comprehensive Income in the same period as the related expenditure. Government grants relating to the receipt of
Coronavirus Job Retention Scheme and the Coronavirus Additional Relief Funding (“CARF”) income is included within other
income in the Consolidated Statement of Comprehensive Income.
xxvii. Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates, and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue, and expenses. Management bases its judgements, estimates, and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates, and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
xxviii. Stock and inventory
Stock and work in progress are valued at the lower of cost and net realisable value, after making due allowance for
obsolete and slow moving items. Cost includes all direct expenditure and an appropriate proportion of fixed and variable
overheads.
Work in progress is valued at the lower of cost and net realisable value. Cost includes all direct expenditure and an
appropriate proportion of fixed and variable overheads.
Stock is valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving
items.
xxix. Leases
The Group’s leases primarily relate to properties and office equipment. Lease terms are negotiated on an individual basis
and contain a wide range of different terms and conditions. Property leases will often include extension and termination
options, open market rent reviews, and uplifts.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the individual lessee company’s incremental borrowing rate considering the duration of the lease.
The lease liability is subsequently measured at amortised cost using the effective interest method, with the finance cost
charged to Statement of Comprehensive Income over the lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability. It is remeasured when there is a change in future lease payments arising from a
change in index or rate, or if the Group changes its assessment of whether it will exercise an extension or termination option.
The lease liability is recalculated using a revised discount rate if the lease term changes as a result of a modification or
reassessment of an extension or termination option.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial direct costs incurred. The right-of-use asset is
typically depreciated on a straight line basis over the lease terms.
Judgements
Useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant,
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations
or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or
written down.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 56 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
Goodwill and other indefinite life intangible assets
The group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in
note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and
growth rates of the estimated future cash flows. The specific estimates used in calculating impairment are detailed in note 15.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal
or value-in-use calculations, which incorporate a number of key estimates and assumptions. The specific estimates used in
calculating impairment are detailed in note 27.
Evaluation of contract liabilities (deferred income)
The Group reviews the fees raised at the end of relevant periods to evaluate those amounts that cover the future provision
of education not yet delivered to estimate and evaluate the amount of contract liabilities/deferred income to be
recognised in a future period.
Impairment of receivables
The Group and Company reviews the impairment of its financial assets, including the trade receivables balance. The Group
estimates and evaluates impairment methodology using the simplified approach of the expected credit loss model based
on default rate percentage of similar product type assets (provision matrix) and grouping the trade receivables based on
shared characteristics, including line of business.
Classification of items as non-Underlying
Underlying measures represent trading results before non-Underlying items which are defined in note 11. The Directors
believe that presentation of the Group’s results in this way is relevant to assist the user in understanding the financial
performance, position, and trends of the Group, as non-Underlying items are identified by virtue of their size, nature,
and/or incidence. This presentation is consistent with the way that financial performance is measured by management
and reported to the Board, the basis of financial measures for senior management’s compensation schemes, and
provides supplementary information that assists the user in understanding the Underlying trading results. In determining
whether an event or transaction is non-Underlying, the Directors consider both quantitative and qualitative factors
such as the nature of the item and the frequency or predictability of occurrence. The decision to classify items as either
Underlying or non-Underlying is judgemental and requires careful consideration to ensure that the accounts provide a
useful indicator of the performance of the Group.
Income taxes
Significant judgement is required in determining the capital allowance, deductibility of certain expenses, and taxability of
certain income during the estimation of the provision for income taxes. There are many transactions and calculations for
which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities
based on estimates of whether additional taxes will be due. Where the final tax outcome is different from the amounts that
were initially recorded, such differences will impact the income tax and deferred income tax provisions in the period in
which such determination is made. Judgement is made in the evaluation in respect of the fair value of any deferred tax
asset recognised in respect of taxable losses carried forward.
Warrants
The Group determines the fair value of warrants using appropriate modelling. Judgement is required in determining a model
to use to fair value warrants. Based on the nature of warrants, the Group has determined that the Black-Scholes model is an
appropriate model to use. The specific estimates used in calculating fair value are detailed in note 21.
Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The resulting charge to the Statement of Comprehensive Income requires
assumptions to be made regarding future events and market conditions. Judgement is required in determining the most
appropriate valuation model and the most appropriate inputs into the model including the level of volatility of the Group’s
share price, market conditions, and the expected life of the option.
57
3. Lessee accounting
The Group reviews its lease periods annually and extends periods where a lease extension is reasonably certain or reduces
periods where a lease termination is reasonably certain.
i) Amounts recognised in the Statement of Comprehensive Income:
Interest expense and similar charges
Interest expense
Operating and administrative expenses
Depreciation of right-of-use assets
Total expensed to Statement of Comprehensive Income
ii) Right-of-use assets
Balance as at the beginning of the year
Depreciation of right-of-use assets
Balance as at the end of the year
iii) Lease liabilities
Current liability
Non-current liability
Total liability
2023
£
2022
£
(10,836)
194,399
504,542
493,706
338,650
533,049
At 31 December
2023
£
At 31 December
2022
£
2,215,076
(504,542)
1,710,534
2,553,726
(338,650)
2,215,076
At 31 December
2023
£
At 31 December
2022
£
418,267
2,086,428
2,504,695
450,726
2,624,792
3,075,518
iv) Lease payments
The total lease rent amount payable (excl. VAT) in the year was £553,925 (2022: £473,360). The total amount paid in the year
was £557,017 (2022: £473,359). The overpayment is due to catch up payments owed from previous periods.
4. Revenue
i) Sale of Services
Course fees
Application fees, registration, and examination fees
Training fees, course materials, and others
Accommodation fees
ii) Agent Commission Income
Agents Commission Income
2023
£
2022 (restated)*
£
9,753,210
5,161,759
170,468
125,264
1,272,898
143,148
64,865
965,254
11,321,840
6,335,026
2023
£
2022
£
936,089
176,576
*
Agent commission income was previously recognised as part of Sales of Services. This commission income is received from a university
partner. A significant portion is then passed directly to the Group’s agents.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
58 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
iii) Segments
The Directors consider that the Group has a single business segment, being the sale of education services. The operations
of the Group are managed centrally with Group-wide functions covering sales and marketing, finance, and administration.
Geographically, operations are all UK based. Revenue from customers who individually accounted for more than 10% of
total Group revenue amounted to £4,366,043 (2022: £1,779,821).
5. Other income
Rental income
R&D credits
Government subsidies*
* Government subsidies include an amount received from council grants.
6. Staff remuneration and benefits
Staff* salaries and related costs**
Directors’ remuneration (Executive Directors)
Directors’ fees (Non-Executive Directors)
Staff training and welfare
Pension
Share based remuneration – staff****
Share based remuneration – Directors****
Highest paid Director
Remuneration and benefits
Average number of employees
Lecturers
Marketing staff
Operational and administration staff
2023
£
32,400
19,231
—
51,631
2022
£
44,020
—
40,724
84,744
2023
£
2,557,433
200,063
80,000
14,609
33,734
2022
(restated)***
£
1,759,230
192,500
80,000
5,518
26,115
2,885,839
2,063,363
2,659
2,474
5,133
2,055
1,690
3,745
111,472
111,080
Number
Number
72
22
46
140
52
14
51
117
*
Staff here includes both employees and contract staff. While contract staff are not employees, they make up a significant portion of the
total workforce therefore the staff costs make more sense with contractors included.
** Salaries and related costs are not inclusive of lecturers.
*** Restated to correct an error. In 2022, Staff Salaries in this table was incorrectly showing as £1,760,920, it should have been £1,759,230.
**** Share based remuneration expenses related to EMI share options (ref Note 26).
The average number of employees is calculated based on the number of full or part-time employees on the payroll each
month.
59
7. Finance costs
Interest on leases (IFRS 16)*
Brighton Interest charge and adjustment for early lease termination*
Interest on Term Loan
Interest on convertible loan notes
Other finance costs**
2023
£
147,084
(168,170)
212,694
—
143
2022
£
213,333
(18,284)
68,368
24,555
7,114
191,751
295,086
*
Includes an adjustment to Right of Use of Asset and the Lease Liability for the early termination of the Brighton lease. Interest on the lease
liability was reduced by £187,072 and Depreciation on Right of Use of Asset was increased by £165,891.
** Other Finance costs are restated to exclude Brighton interest charges.
8. Operating expenses
Auditor’s remuneration:
– Fees payable to the Company’s auditor for Statutory audit
– Fees payable to the Company’s auditor for Statutory audit of subsidiary company
– Non-audit fees for taxation compliance fees
Administrative and market expenses
Expected credit losses – trade receivables
Fair value movement – warrants
Fair value movement – Loan write-back
9. Income tax
Tax expense attributable to the results is made up of:
Current year tax
Deferred taxation charge
2023
£
51,675
37,495
9,500
2022
£
41,000
32,500
8,570
1,887,783
1,123,930
181,939
225,518
(94,216)
221,099
(40,019)
—
2,299,694
1,387,080
2023
£
—
—
—
2022
£
—
—
—
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
60 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
The reconciliation of the current year tax expense and the product of accounting profit multiplied by the Statutory tax rate is
as follows:
Accounting loss before tax from continuing
operations
Profit/(Loss) before tax from discontinued
operations
Loss for the year before tax
Income tax at the Statutory rate
Adjustments of income tax in respect of prior years
Deferred tax asset not recognised
Current year adjustment to deferred tax asset
Income tax charge
Income tax charge in the Consolidated Statement
of Comprehensive Income
2023
£
(160,038)
—
(160,038)
(37,609)
—
—
—
—
%
%
2022
£
(1,083,833)
—
(1,083,833)
23.5
(205,298)
19.0
—
205,298
—
—
—
—
The Group’s income tax liability is subject to agreement by the tax authorities of the respective countries in which the
companies in the Group operate. Temporary differences arising from investment in subsidiary and associated companies are
considered as insignificant to the Group.
Analysis of provision for deferred taxation:
Balance at the beginning of the year*
Deferred taxation for the year
Balance at the end of the year
Deferred tax asset
Deferred tax liability
Balance at the end of the year
2023
£
10,279
11,754
22,033
(22,033)
22,033
—
2022
£
10,279
—
10,279
—
10,279
10,279
*
The deferred tax liability was recognised in 2019 in Communicate English School.
The Group has tax losses in excess of £5.66m (2022: £5.5m) which are available to offset against future profits.
Deferred tax assets have been recognised as it is sufficiently certain that taxable profit will be available against which these
available tax losses can be utilised in the future.
10. Loss per share
The basic and diluted Statutory loss per share attributable to equity holders of the Company is based on the Statutory loss
attributable to shareholders of £160,038 (2022: Statutory loss of £1,083,833) and the weighted average number of ordinary
shares in issue during the year of 24,442,400 shares (2022: 21,915,119 shares). The Statutory loss per share (in pence) attributed
to shareholders is 0.59 (2022: Statutory loss per share of 4.95).
61
11. Reconciliation of Statutory information to Underlying information
Underlying information is provided because the Directors consider that it provides assistance in understanding the Group’s
Underlying performance. Further details in relation to APMs are contained within note 1.
The following table includes details of non-Underlying items and reconciles Statutory information to Underlying information:
2023
Revenue
£
Direct costs
£
Gross profit
£
Operating
profit
£
Finance
costs
£
(Loss)/Profit
before tax
£
Statutory results
12,257,929
(6,536,647)
5,721,282
46,969
(191,751)
(144,782)
Malvern House Brighton(a)
(671,767)
451,195
(220,572)
325,392
168,170
157,222
Share-based payments(b)
Warrants(c)
Loan write-back(d)
Underlying results
—
—
—
—
—
—
—
—
—
5,133
225,518
(97,265)
—
—
—
5,133
225,518
(97,265)
11,586,162
(6,085,452)
5,500,710
505,747
(359,921)
145,826
2022
Revenue
£
Direct costs
£
Gross profit
£
Operating
loss
£
Finance
costs
£
Loss before
tax
£
Statutory results
6,511,602
(3,558,448)
2,953,154
(788,747)
(295,086)
(1,083,833)
Malvern House Brighton(a)
(639,739)
352,921
(286,818)
Share-based payments(b)
Warrants(c)
—
—
—
—
—
—
27,866
3,745
(35,451)
18,285
—
—
46,151
3,745
(35,451)
Underlying results
5,871,863
(3,205,527)
2,666,336
(792,587)
(276,801)
(1,069,388)
(a) Malvern House Brighton
During the year the Directors of the Group announced its decision to close Malvern House Brighton. The decision was made
following a review of the viability of the school, informed by current operations, overhead costs, projected student numbers,
financial performance, and the further investment required for the school to achieve profitability which it had yet to do.
(b) Share-based payments
The Company has an Enterprise Management Incentive share option scheme for certain Directors and employees. Under
the scheme, participants have been awarded options to acquire up to a prescribed level of shares.
(c) Warrants
As part of the Term Loan, BOOST&Co. was issued warrants over 1,725,113 shares. These warrants are exercisable at the Strike
Price at any time over the following ten years since the inception of Term Loan in August 2019. The warrants are revalued at
fair value annually, any movement is expensed in the Consolidated Statement of Comprehensive Income.
(d) Loan write-off
A loan associated with the Group’s past business activities in Malaysia was written off during the year.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 62 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
12. Property, plant, and equipment
Cost
Opening balance, 1 Jan 2022
Additions
Disposals
Closing balance, 31 Dec 2022
Additions
Disposals
Closing balance, 31 Dec 2023
Accumulated depreciation
Opening balance, 1 Jan 2022
Charge for the year
Disposals
Closing balance, 31 Dec 2022
Charge for the year
Brighton Depreciation Charge and adjustment for early termination
Closing balance, 31 Dec 2023
Net book value at 31 December 2023
At 31 December 2022
Classroom
and office
equipment
Equipment and property
Right-of-use
assets property
£
£
Total
£
408,549
3,544,655
3,953,204
14,545
(1,373)
—
—
14,545
(1,373)
421,721
3,544,655
3,966,376
58,184
(1,320)
—
—
58,184
(1,320)
478,585
3,544,655
4,023,240
358,122
33,807
(870)
391,059
19,216
—
410,275
68,310
30,662
990,929
338,650
—
1,349,051
372,457
(870)
1,329,579
1,720,638
323,529
181,013
1,834,121
1,710,534
2,215,076
342,745
181,013
2,244,396
1,778,844
2,245,738
*
The Lease in Brighton terminates in March 2024. The ROU and lease liability have been adjusted in December 2023 to give the effect of the
termination.
13. Investment in subsidiary companies
Company
Investment in subsidiaries
Unquoted equity shares, at cost
As at the beginning of the year
Disposals
As at the end of the year
Provision against the cost of investment in subsidiaries
As at the beginning of the year
Disposal
As at the end of the year
Net book value at the end of the year
2023
£
2022
£
7,681,847
7,681,847
—
—
7,681,847
7,681,847
6,262,497
6,262,497
—
6,262,497
1,419,350
—
6,262,497
1,419,350
63
The Company owns 100% share capital of the following companies:
Communicate English School Limited (UK).
Malvern House Group Limited (UK).
Malvern House International Limited (UK) is 100% owned by Malvern House Group Limited. For the purpose of Malvern
House Group Limited, the Group has decided to take advantage of parental corporate guarantees under s479A of the
Companies Act, allowing entities to take audit exemptions and present unaudited Statutory financial statements.
In liquidation
SAA Global Education Centre Pte Ltd (Singapore).
Malvern International Academy Pte Ltd (Singapore).
Malvern Language Academy Pte Ltd (Singapore).
14. Goodwill
Cost
Balance as at the beginning of the year
Balance as at the end of the year
2023
£
2022
£
1,419,350
1,419,350
1,419,350
1,419,350
Goodwill arose on the acquisition of Communicate English School Limited in 2018. Annual impairment reviews are
undertaken each year using discounted future cash flows to ensure the carrying value is recoverable.
The recoverable amount of this CGU is in excess of the carrying value of £1,419,350, therefore no impairment is required. The
following assumptions were used to calculate the amount recoverable:
•
Discounted Cash Flow model produced modelling cash flow for Communicate over five years
•
Terminal value applied to cash flow from year 6 onwards
• Discount rate of 10% applied reflecting the WACC of the Group
•
Dynamic growth rate applied, ranging from 6% in 2023, reflecting additional growth of the anticipated bounce-back
from lockdown impacted trade, to 3% annual growth at the end of the five year time horizon, consistent with industry
data
• Sensitivities around the model: a 0.1% increase in the discount rate has an impact of approximately £34k in headroom
15. Trade receivables
Trade receivables
At 31 December 2023, the exposure to credit risk for trade receivables was as follows:
Trade receivables are denominated in the following currencies:
UK – Pound Sterling
2023
£
2022
£
440,541
405,051
2023
£
2022
£
440,541
405,051
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
64 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
Not yet due and not impaired
Past due but not impaired
– Past due 0 to 3 months
– Past due 3 to 6 months
– Past due over 6 months
Impaired trade receivables
Less: Allowances for impairment loss
A reconciliation of changes in the record of impairments of receivables is provided below.
Balance at the beginning of the year
Movement in the year
Balance as at the end of the year
2023
£
74,598
267,781
31,134
67,028
440,541
200,231
(200,231)
440,541
2023
£
223,347
(23,116)
200,231
2022
£
5,450
210,173
105,872
83,556
405,051
223,347
(223,347)
405,051
2022
£
336,930
(113,583)
223,347
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with
the Group, and a failure to make contractual payments for a period of greater than 120 days past due.
These are no contract assets within trade and other receivables.
16. Other receivables and prepayments
Rent deposits
Prepayments and accrued income
Other debtors
17. Cash and cash equivalents
Group
2023
£
36,500
850,481
32,013
918,994
2022
£
36,500
1,067,222
32,268
1,135,990
Group
2023
£
2022
£
Cash and cash equivalents
2,196,499
1,181,631
18. Trade payables
Trade payables
1,495,664
416,944
Group
2023
£
2022
£
Company
2023
£
—
88,946
27,539
116,485
Company
2023
£
2,273
Company
2023
£
96,730
2022
£
—
14,232
27,539
41,771
2022
£
13,101
2022
£
788
65
19. Contract liabilities
Contract liabilities are deferred revenue representing amounts billed on account of revenues where performance obligations
have not been met for recognition of revenue. Contract liabilities relate to course fees received in advance and recognised in
the Statement of Comprehensive Income based on classes and examinations conducted in the subsequent financial year.
The amount of £2,199,570 recognised in contract liabilities at the beginning of the period has been recognised as revenue
for the period ended 31 December 2023.
Contract liabilities
Opening balance
Deferred income recognised during the year
Course fees received in respect of subsequent financial year
Closing balance
20. Other payables and accruals
Other payables
Payroll Tax and Other Statutory Liabilities
Accrued expenses
21. Financial liabilities
Non-current liabilities
Term Loan
Warrants
Lease liabilities
Current liabilities
Term Loan
Lease liabilities
Trade and other payables
Total
Group
2023
£
204,457
335,389
983,207
1,523,053
Group
2023
£
1,811,784
415,281
208,428
2,435,493
313,484
418,267
1,495,664
2,227,415
4,662,908
2022
£
104,574
313,052
1,222,891
1,640,517
2022
£
2,052,808
189,762
2,624,792
4,867,362
436,341
450,726
2,057,461
2,944,528
7,811,890
2023
£
2022
£
2,460,265
2,199,570
2023
£
2,199,570
(2,199,570)
2,460,265
2,460,265
2022
£
17,608
50,310
29,066
96,984
2022
£
1,997,540
189,762
—
Company
2023
£
94,629
54,687
35,465
184,781
Company
2023
£
1,765,039
415,281
—
2,180,320
2,187,302
296,236
415,044
—
96,730
392,966
—
97,772
512,816
2,573,286
2,700,120
Term Loan
In August 2019, Malvern received a Term Loan from BOOST&Co. for £2,600,000. This loan originally carried an interest rate as
the higher of (a) 10% per annum, or (b) 8% per annum plus LIBOR. The loan was restructured in March 2022, the new terms
includes a twelve month payment and interest holiday with monthly payments commencing from March 2023 over a five-
year period, with the interest being set at 7% for the first two years and 10% for the subsequent three years. There are no early
repayment penalties on this facility.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
66 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
During 2020, the Group took advantage of the Government-backed Bounce Back Loan Scheme (“BBLS”), benefiting from
a total of £100,000 to be repaid over a six-year period with a 2.5% fixed rate of interest. The first twelve months of this lending
facility are free of any obligation to pay capital or interest. The balance outstanding at 31 December 2023 is £63,993 (2022:
£76,566).
Warrants
As part of the Term Loan, BOOST&Co. were issued warrants over 1,725,113 shares. These warrants are exercisable at the Strike
Price at any time over the following ten years since the inception of the Term Loan in August 2019.
As at the date of the financial position, the Group has fair valued these warrants at £415,281. The following estimates were
used to calculate this fair value:
•
Annualised volatility of 83% and 144% at the inception of Term Loan and at the year end respectively, calculated using
share price volatility over a preceding 19-year period
• Maturity of 5.6 years applied, reflecting the duration over which BOOST&Co. could exercise these warrants
• Risk free rate of 3.64%, being the Yield on UK five-year Government bonds
• Strike Price of £0.10, being the 28-day average share price preceding the date (i.e. 27 Aug 2019) of drawdown
22. Share capital
At 31 December 2022 –
0.1p ordinary shares and 0.1p,
1p & 5p deferred shares
Allotted, called up and fully paid
No. of ordinary
shares
Nominal value of
ordinary shares
No. of deferred
shares
Nominal value of
deferred shares
Nominal value of
all shares
24,442,400
244,424
3,025,620,350
11,079,475
11,323,899
Additions during the year –
—
—
—
—
—
At 31 December 2023
– 0.1p ordinary shares and
0.1p, 1p & 5p deferred shares
24,442,400
244,424
3,025,620,350
11,079,475
11,323,899*
*
Excludes the accumulated share-based payment balance. The share-based payments are booked in to equity under Other Reserves for,
£12,190 (2022: £7,057).
The Company has an Enterprise Management Incentive share option scheme for certain Directors and employees.
23. Reserves
The Company has the following types of reserves:
(i) Share premium reserve
Balance as at the beginning of the year
Issue of new shares
Fund raising expenses
Convertible loan notes
Convertible loan note reserve transferred to share premium
2023
£
2022
£
6,797,950
6,603,839
—
—
—
—
175,000
(24,500)
14,789
28,822
Balance as at the end of the year
6,797,950
6,797,950
The share premium reserve arises where shares have been issued at a price more than the nominal value of 1 pence less
any costs of the issue.
67
(ii) Retained earnings
At the beginning of the year
Tax adjustments from prior year
Loss for the year
At the end of the year
Group
2023
£
2022
£
Company
2023
£
2022
£
(21,762,885)
(20,679,052)
(20,617,212)
(19,431,716)
27,052
—
—
—
(160,038)
(1,083,833)
(2,076,835)
(1,185,496)
(21,895,871)
(21,762,885)
(22,694,047)
(20,617,212)
Retained earnings represent the accumulated surplus or deficit of distributable reserves.
(iii) Convertible loan note reserve
At the beginning of the year
Changes in the present value
At the end of the year
Group
2023
£
—
—
—
2022
£
28,822
(28,822)
—
Company
2023
£
—
—
—
2022
£
28,822
(28,822)
—
24. Related party transactions
Details of key management personnel and Directors’ fees and emoluments were as follows:
Key management personnel
Directors’ remuneration:
– Salaries and bonuses
– Directors’ fees
– Share-based payments
2023
£
2022
£
200,063
80,000
2,474
282,537
192,500
80,000
1,690
274,190
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS
68 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
25. Financial instruments
Financial risk management objectives and policies
Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an
acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually
monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is
achieved. Risk management policies and systems are reviewed regularly to reflect changes in markets conditions and the
Group’s activities.
The Group holds the following financial instruments:
Notes
Pound Sterling
2023
Financial assets at amortised cost
Cash and cash equivalent
Trade receivables
Other debtors
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Borrowings
Lease liabilities
Financial liabilities at FVPL
Warrants
Total financial liabilities
Net position
2022
Financial assets at amortised cost
Cash and cash equivalent
Trade receivables
Other debtors
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Borrowings
Lease liabilities
Financial liabilities at FVPL
Warrants
Total financial liabilities
Net position
17
15
16
18,20
21
21
21
17
15
16
18,20
21
21
21
2,196,499
440,541
918,995
3,556,035
1,495,664
2,125,268
2,504,695
415,281
6,540,908
(2,984,873)
1,181,631
405,051
1,135,990
2,722,672
2,057,461
2,489,149
3,075,518
189,762
7,811,890
(5,089,218)
69
(i) Credit risk
Exposure to the credit risks are monitored on an ongoing basis. The Group does not require collateral in respect of financial
assets.
The carrying amount of trade and other receivables and related party balances and cash represent the Group’s maximum
exposure to credit risk. Cash and cash balances are placed with reputable financial institutions. Therefore, credit risk arises
mainly from the inability of customers to make payments when due. 34% (2022: 82%) of the Group’s account receivables are
made up of individual students, 7% (2022: 18%) relates to large funding organisations such as universities. All trading activities
are concentrated in Europe. The analysis of aging debtors is provided in note 15.
(ii) Liquidity risk
The Group seeks to adopt a prudent liquidity risk management by maintaining sufficient cash and having adequate
amounts of credit facilities. Due to the nature of the Group’s operations, the Group aims at maintaining flexibility in funding
by keeping committed credit facilities available.
The following tables detail the remaining contractual maturity for non-derivative financial liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and
Company can be required to pay.
2023
Trade payables
Other payables and accruals
Term Loan
Lease liabilities
Warrants
Total
2022
Trade payables
Other payables and accruals
Term Loan
Lease liabilities
Warrants
Total
On demand or
within one year
£
Within 2 to
10 years
£
1,495,664
1,523,053
313,484
418,267
—
—
—
1,811,784
2,086,428
415,281
3,750,468
4,313,493
416,944
1,640,517
436,341
450,726
—
2,944,528
—
—
2,052,808
2,624,792
189,762
4,867,362
(iii) Foreign currency risk
The Group’s investments in overseas subsidiaries and associated companies which have been closed/discontinued after
announcement in August 2020 and therefore Group exposure is no longer a material risk. The differences arising from
such translation are recorded under the foreign currency translation reserve. The Group does not use derivative financial
instruments to hedge against the volatility associated with foreign currency transactions as the Directors believe that the risks
arising from fluctuations in foreign currency exchange rates are not significant.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 70 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
(iv) Interest rate risk
The Group’s exposure to market risk for changes in interest rates relate primarily to the Group’s bank overdraft facility and
Term Loan. A change in interest rate at the reporting date would not materially affect income or reserves. For 2023, there
was none to report.
The tables below set out the Group’s exposure to interest rate risks. Included in the tables are the assets and liabilities at
carrying amounts, categorised by the earlier of contractual repricing or maturity dates.
Fixed rate
interest bearing
£
Non-interest
bearing
£
Total
£
At 31 December 2023
Assets
Trade and other receivables
Cash and bank balances
Total assets
At 31 December 2023
Liabilities
Trade and other payables
Borrowings
Lease liabilities
Warrants
Total liabilities
At 31 December 2022
Assets
Trade and other receivables
Cash and bank balances
Total assets
At 31 December 2022
Trade and other payables
Borrowings
Lease liabilities
Warrants
Total liabilities
—
—
—
1,359,535
2,196,499
3,556,034
—
3,018,716
2,125,268
2,504,695
—
—
—
415,281
1,359,535
2,196,499
3,556,034
3,018,716
2,125,268
2,504,695
415,281
4,629,963
3,433,997
8,063,960
—
—
—
1,541,041
1,181,631
2,722,672
—
2,057,461
2,489,149
3,075,518
—
5,564,667
—
—
189,762
2,247,223
1,541,041
1,181,631
2,722,672
2,057,461
2,489,149
3,075,518
189,762
7,811,890
(v) Fair values of financial assets and financial liabilities
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, and short-term
borrowings approximate their respective fair values due to the relatively short-term maturity of these financial instruments.
The fair values of other financial assets and liabilities are as disclosed in the respective notes.
71
(vi) Reconciliation of liabilities arising from financing activities
CASH
NON-CASH
1 January
2023
Additional
loan
Net
financing
cash flows
Interest
paid
Fair
value
movement Reclassified
Unwinding
of interest
31 December
2023
Term Loan
Warrants
IFRS 16 - “Lease Liability”
3,075,518
—
(187,072)
173,266
2,504,695
2,489,149
43,679
(373,734)
1,790
(94,216)
189,762
—
—
—
(557,017)
—
—
225,518
—
—
58,600
2,125,268
—
415,280
CASH
NON-CASH
1 January
2022
Additional
loan
Net
financing
cash flows
Interest
paid
Fair
value
movement Reclassified
Unwinding
of Interest
31 December
2022
Term Loan
Warrants
Convertible loan notes
2,600,821
72,801
275,885
IFRS 16 - “Lease Liability”
3,354,478
—
—
—
—
(15,274)
—
(178,102)
(473,359)
—
—
—
—
(156,981)
—
60,583
2,489,149
(35,451)
152,412
—
189,762
—
—
(100,000)
2,217
—
—
194,399
3,075,518
(vii) Capital risk management policies and objectives
The Group manages its capital to ensure that entities within the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of
the Group consists of debt, cash and bank balances and equity attributable to holders of ordinary shares of the Company
comprising issued capital, other reserves and retained earnings as disclosed in the financial statements. The Board of
Directors reviews the capital structure regularly and at the minimum on a yearly basis.
The Group monitors its debt-to-equity ratio which was calculated as follows.
Loans
Lease liabilities
Total debt
Group
2023
£
2,125,268
2,504,695
4,629,963
2022
£
2,489,149
3,075,518
5,564,667
Company
2023
£
2022
£
2,061,275
2,412,584
—
—
2,061,275
2,412,584
Less: Cash and cash equivalents
(2,196,499)
(1,181,631)
(2,273)
(13,101)
Net debt
Total equity
Debt to equity
2,433,463
4,383,036
2,059,002
2,399,483
(3,761,832)
(3,633,979)
(4,560,008)
(2,488,306)
0.65
1.21
0.45
0.96
Financial assets are disclosed in notes 15 to 17. The Group’s principal financial assets are bank balances, trade and other
receivables.
Loan covenants
The Group’s does not have any specific financial covenants to comply with its major debt provider.
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS 72 Malvern International Plc Annual Report and Accounts 2023
Notes to the Financial Statements continued
26. Share-based payments and share options
The Company has an Enterprise Management Incentive share option scheme for certain Directors and employees. Under
the scheme, participants have been awarded options to acquire up to a prescribed level of shares following a three year
vesting period if the Company’s share price has met the pre-determined target conditions. There are two market-based
conditions, each accounting for 50% of the share options awarded to the employee. In addition, the mid-market share
price of the Company on the AIM Market of the London Stock Exchange, must stay at or above the exercise price,
for 40 consecutive business days.
The Group used the Black-Scholes valuation framework for all share options awarded pre-2023. These options have also
been valued using the Monte Carlo valuation method to validate the reasonableness of the results. The results from the
Monte Carlo valuation were not considered materially different from the Black-Scholes valuation.
The inputs into the Black-Scholes model as at 31 December 2023 are as follows:
Grant date
EMI Options
Exercise
price
(pence)
Strike
price on
grant date
(pence)
Vesting
period
(years)
Expected
volatility
Risk free
rate
Fair value
Deemed
probability
of achieving
market
condition
02/12/2020
02/12/2020
07/01/2022
07/01/2022
18/01/2022
18/01/2022
01/09/2022
01/09/2022
336,250
336,250
50,000
50,000
60,000
60,000
283,750
283,750
50
90
50
90
50
90
60
110
15
15
15
15
15
15
22
22
3
3
3
3
3
3
3
3
12.30%
12.30%
11.98%
11.98%
11.98%
11.98%
10.45%
10.45%
0.35%
0.35%
0.35%
0.35%
0.35%
0.35%
0.26%
0.26%
0.34
0.74
0.35
0.75
0.35
0.75
0.38
0.87
5.02%
0.37%
5.30%
0.37%
5.30%
0.37%
1.10%
0.00%
As with options containing performance-based market targets, the probability of achieving the set condition is factored into
the determination of the value. These will not be re-measured at subsequent reporting dates.
The vesting probabilities presented are products of lognormal distribution modelling over a three year period to determine
the likelihood of the vesting condition being reached, based off the scaled mean and standard deviation from a prior
365-day period.
The Group has used the Monte Carlo valuation framework for all share options awarded in 2023.
The inputs into the Monte Carlo model as at 31 December 2023 are as follows:
Grant date
30/11/2022
30/11/2022
15/11/2023
15/11/2023
EMI Options
Hurdles
(pence)
287,500
287,500
143,750
143,750
60
110
115
115
Strike
price on
grant date
(pence)
10
10
23.5
23.5
Expiry
(years)
Volatility
Option
price
(pence)
Share
price
(pence)
5
5
5
5
50%
50%
70%
70%
2.93
1.34
10.4
10.4
12
12
24.5
24.5
For options with hurdles, early exercise is assumed to take place as soon as the 40-day hurdle requirement is triggered after
the three year vesting period. The Monte Carlo simulation uses 50,000 iterations to enhance the accuracy of the predicted
outcome.
73
Number of
options
1,965,000
287,500
Weighted
average
strike price
15.54p
23.5p
—
—
112,500
2,140,000
—
—
17.01p
—
Year ended 31 December 2023
Outstanding at 1 January 2023
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at 31 December 2023
Exercisable
Of the options outstanding at 31 December 2023, 860,000 (2022: 892,500) options have an exercise price of 15 pence, 567,500
(2022: 567,500) options have an exercise price of 22 pence, 425,000 (2022: 575,000) options have an exercise price of 10 pence, and
287,500 (2022: 575,000) options have an exercise price of 23.5 pence.
The aggregate charge for share options recognised in the Group financial statements in the year was £5,133 (2022: £3,745).
27. Intangible assets
Acquisition costs
Closing balance, 31 Dec 2022
Closing balance, 31 Dec 2023
Accumulated amortisation
Closing balance, 31 Dec 2022
Closing balance, 31 Dec 2023
Brands
£
Customer
List
£
Domain
Name
£
Development
Assets
£
Contract
Assets
£
Total
£
2,489,886
2,489,886
2,489,886
2,489,886
274,637
274,637
274,637
274,637
—
12,242
12,242
12,242
12,242
—
434,545
434,545
434,545
434,545
—
508,000
3,719,310
508,000
3,719,310
508,000
3,719,310
508,000
3,719,310
—
—
Net book value, 31 Dec 2023 and 31 Dec 2022
—
In accordance with IAS 36, the Board has reviewed all ongoing cash-generating units, and has carried out full impairment
of the carrying value of the assets as at 31 December 2019. As a result there are no intangible assets recorded in financial
statements as of 31 December 2023.
28. Subsequent events
In March 2024, the Company issued BOOST&Co. warrants over 115,583 ordinary shares (as adjusted by the share
reorganisation in October 2022) in accordance with the terms of the debt restructuring announced on 4 March 2022. The
warrants have an exercise price of 1.06 pence (as adjusted by the share reorganisation in October 2022).
STRATEGIC REPORTOVERVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTS Shareholder information
Registered office
3rd Floor
Advisers and registrars
Nominated adviser and broker
WH Ireland Limited
1 Ashley Road
Altrincham
Cheshire
WA14 2DT
Head office
200 Pentonville Road
London
N1 9JP
Website
www.malverninternational.com
Registered number
05174452
Listing information
AIM:MLVN
Date of Annual General Meeting
20 May 2024
24 Martin Lane
London
EC4R 0DR
Solicitors
Knights Plc
Two St Peter’s Square
Manchester
M2 3AA
Auditor
Cooper Parry Group Limited
Sky View
Argosy Road
East Midlands Airport
Castle Donington
Derby
DE74 2SA
Registrar
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Shareholder enquiries
Our website contains a wide range of information of
interest to investors, including: latest news, press releases
and Annual Reports. For further information please contact
info.plc@malvernplc.com
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