Malvern International (AIM:MLVN), the AIM-listed learning and skills development group, said tighter immigration and compliance rules are set to reduce Pathways student numbers for the 2026/27 academic year to between 775 and 900, down from 966 in 2025/26 and well short of its original projection of growth on that figure.
The London-listed group said the Board previously guided to a return to profitability in the year, but now expects to report an operating loss, albeit a narrower one than last year.
Malvern said the shift reflects record levels of international student applications and deposits ahead of the Autumn 2026 intake failing to convert into enrolments, as universities adopt more cautious sponsorship policies in response to the stricter environment.
For the year ended 30 September, Malvern said preliminary trading indicates revenue, excluding university commission income and the discontinued Adult English Language Teaching business, grew 15% to approximately £14.4m from £12.6m in FY25.
The Group expects to report an EBITDA loss of approximately £2.5m for FY26, including a circa £0.7m loss from the now-closed Adult ELT division, against an EBITDA profit of £0.1m in FY25 that included a £0.3m Adult ELT loss.
Malvern closed the Adult ELT business in February 2026 to focus on the profitable Juniors and young learners segment; that division generated approximately £1.2m of revenue in FY26, down from £3.2m in FY25.
The Juniors division reported a 23% rise in revenue to £8m from 4,182 students across twelve centres, up from £6.5m and 3,617 students across ten centres in FY25.
Cash stood at £1.8m at 30 September, against £1.9m a year earlier, while the Group continued paying down its term loan to £1.1m from £1.4m, leaving net cash of £0.7m, up from £0.4m in FY25.
"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," said chief executive Richard Mace, adding that the first intake at London Metropolitan University had been "very strong" just eight months after the partnership was signed.
Malvern said it continues to progress its application for registration with the Office for Students, which, alongside its existing Student sponsor licence, would allow it to sponsor eligible students with work rights and broaden its recruitment base.
The Board said its FY27 outlook remains dependent on the January 2027 Pathways intake and continued growth in the Juniors programme, with costs already reduced in response to the smaller Pathways cohort while investment continues selectively in people and systems.