Malvern International : # (MLVN) – U/R – FY2016 results show narrowing loss; implementation of strategic plan (Flash Light from WHIreland)

Market Cap £3.5m Price 3.25p Target Price U/R

MLVN has announced its FY2016 full year results which show a reported loss per share of 1.84p
(2015 loss per share: 2.84p), accompanied by the progressive implementation of the group's strategic plan. Management has been renewed and reorganised and the business is seen to be increasingly outward-facing with new marketing allied to enhanced and wider ranging courses.

Overall sales to £4.0m in 2016 (-17%), mainly as a result of the steep fall in UK revenues (which was partially compensated for by some growth in Asia). Key non-underlying impacts to the reported per share -1.84p were a £150,000 impairment charge taken in 2016 and a gain on the sale of shares in the group's Dublin operations (55% stake in this operation divested). Sharply reduced revenues in the UK of £1.3m generated operating results only marginally below those of the previous year, reflecting cost disciplines and the implementation of long-term plans.

With significant investment in Singapore in preparation for the re-application for the Edu Trust Certification, this area continued to be loss-making but has the potential in the longer run to offer a wide range of programmes (following re-certification). Malaysia made a small operating profit of £20,000 and is making good progress, with a hypothetical acquisition flagged in this morning's update in order to broaden the catchment area. Despite a year of reorganisation,the company retains cash on the balance sheet of c.£120k. We note the company's expectation of significant improvement in the Group's performance in the current year and beyond, and that the implementation of its strategy will 'bring the group to profitability' in the next 1-2 years. As before, we will look to resume formal coverage in due course. [Source : whirelandplc]