Trading update

Malvern International plc (AIM: MLVN), the global learning and skills development partner, provides a trading update for the year ended 30 September 2026 ("FY26").

FY26 performance

The financial year saw the Group achieving its strategic objectives of successfully opening new Pathways centres, exiting the loss-making Adult English Language Teaching (ELT) business[1], growing the Juniors division, and creating a simpler, more focused business.

The preliminary assessment of trading for FY26 indicates revenues, excluding university commission income and discontinued Adult ELT, grew 15% to approximately £14.4m (FY25: £12.6m)[2].

The Group is expected to report an EBITDA loss of approximately £2.5m, including a circa £0.7m loss from the now-closed Adult ELT division (FY25: EBITDA Group profit of £0.1m 2 including £0.3m loss from Adult ELT). The loss reflects the planned investment in processes, systems and curriculum associated with the enlarged Pathways division which now consists of six partnerships.

Cash balances on 30 September 2026 were £1.8m (FY25: £1.9m). The Group continued to pay down its Term Loan in the period, which at the year-end was £1.1m (FY25: £1.4m). Net cash (cash less total debt) at the year-end had increased to £0.7m (FY25: £0.4m).

Pathways student numbers for the 2025/26 academic year were 966 (2024/25: 1,023; 2023/24: 794), and the division once again reported excellent student outcomes and satisfaction rates. The results for the new Pathway centres are testament to the academic rigour we apply to our teaching that forms the basis of our proposition to existing and future university partners.

The Juniors division reported a 23% increase in revenue to £8.0m from 4,182 students from twelve centres compared to revenues of £6.5m from 3,617 students from ten centres in FY25.

Current trading and outlook

The Group saw record levels of international student applications and deposits ahead of the Autumn 2026 intake, demonstrating continued demand for UK higher education and for Pathways programmes at our university partners. However, conversion into enrolled students is being impacted by an increasingly restrictive immigration and compliance environment, alongside more cautious sponsorship policies adopted by university partners in response. These factors are presenting challenges across the sector despite strong underlying student demand.

As a result of this change in the operating environment, total Pathways student numbers for the 2026/27 academic year are currently expected to be in the range 775 to 900 students (2025/26: 966; 2024/25: 1,023; 2023/24: 794), compared to our original projection of student numbers being ahead of 2025/26.

Against this background and following significant upfront investment, the first intake at London Metropolitan University (Autumn 2026) has been very strong and well-received by the Group’s university partner. We continue to support and deliver courses across our partnerships and, with a broader and more diversified portfolio underpinned by multi-year agreements, we remain confident we have the foundations to build student numbers on improved payment terms over the coming years.

The Group continues to progress its application for registration with the Office for Students (OfS), representing an important strategic milestone in strengthening its position within the UK higher education sector. Malvern already holds its own Student sponsor licence and successful OfS registration would enable the Group, subject to the applicable UKVI requirements, to sponsor eligible students with associated work rights and to offer a broader product portfolio to students from wider international markets. This would enhance the attractiveness of Malvern's programmes to international students, broaden recruitment opportunities and provide greater flexibility in how the Group works with its university partners.

Juniors and young learner camps for FY27 are expected to grow following the success of FY26 and, with two competitors exiting the market this year, we are already presented with the opportunity to increase our market share once again. Our successful British Council reaccreditation in Summer 2026 has confirmed the strength of our offer; this accreditation is valid for four years.

In light of these factors, the Board now expects the Group to report a significantly smaller operating loss in FY27 compared to the operating loss in FY26. The previous expectation was of a return to profitability in FY27. This outlook remains dependent on the January 2027 Pathways intake and the growth of the Juniors programme. The Group has already reduced costs in response to the smaller Pathways intake, while continuing to invest selectively during FY27 in people and systems needed to scale the business.

Richard Mace, Chief Executive Officer, said:

“We closed FY26 with a record Juniors summer showing revenue growth of 23%, and we delivered a strong first intake at London Metropolitan University from a standing start, just eight months after signing the partnership. Yet despite record applications and deposits, a much tougher compliance environment across the sector meant fewer students started with us this autumn than we had planned.

Our response is focused on what we can control. We are keeping costs tight and focusing on building the January intake. We are also in discussions with university partners about providing additional outsourced services, supporting them as they look to reduce costs at a time of financial pressure across the sector. Strategically, pursuing OfS registration is the most important step we can take. Alongside our existing sponsor licence, this would allow us to sponsor students with work rights, making our programmes more attractive and enabling a more balanced sharing of recruitment and compliance risk with our university partners.

With the major investment in our partnerships largely complete, a broad partnership portfolio that includes a 15-year agreement with London Metropolitan University, and a Juniors business well-placed to take further market share, we have a scalable platform from which to rebuild student numbers.”