Fairview International PLC

("Fairview" or the "Company")

Unaudited Interim Results for the six-month period ended 31 December 2024

Fairview, the operator of international schools following the International Baccalaureate curriculum, is pleased to provide its unaudited interim results for the six-month period ended 31 December 2024 ("H1 2025") and provide an update on year-to-date trading. Comparative data is provided for the six months ended 31 December 2023 ("H1 2024"), unless otherwise stated.

Financial Highlights

·    Revenue increased by 4.8%

·    New student enrolments and applications already show a 4.4% improvement on student numbers

Operational Highlights

·    Increased effort in marketing showing early successes

·    Continued financial assistance to students and their families through bursaries and academic awards

·    Fairview has been Malaysia's top-ranked International Baccalaureate (IB) provider for five consecutive years (2020-2024)

·    Fairview is also ranked among the top 3 per cent. of IB schools worldwide, being recognised as a global top 100 IB school for the past five years

Outlook

·    Ongoing plans for organic growth by exploiting existing capacity and further expansion by acquisition or new build schools

·    Focus on Asia and the UK

Daniel Chian, Chairman of Fairview, said: "I am pleased to present our interim results for the six months ended 31 December 2024, reflecting our first period as a London Main Market listed company.  The Group's half year results are based on the continued hard work of the executive team, to whom considerable thanks is due, the quality of our underlying operational systems and the robustness of our business model. Thanks are also due to my fellow Board members and to our business partners.

"We believe that our team has the skills and experience to adapt to the challenges presented by global economic conditions and to continue to build the business by capitalising on the opportunities that are expected to arise through the rest of 2025 and beyond."

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About Fairview International PLC

Fairview owns and operates two private independent schools in Malaysia that offer the International Baccalaureate programme. One of these schools is located in Kuala Lumpur, the capital of Malaysia, and the other is located in the southern state of Johor close to the border with Singapore.  These schools trade under the Fairview brand which was founded in 1978, and were subsequently acquired by Agodeus Sdn Bhd, a company owned by the Chian family, in 2012. 

There are three other schools in Malaysia and one in the United Kingdom that also trade under the Fairview brand, which are under common control but outside of the Company's group.  All schools in the Fairview network are individually recognised by the International Baccalaureate Organisation as fully accredited to offer the IB programme across the primary and middle years; ages 5 to 16, with Fairview Kuala Lumpur also offering the diploma programme for 16 to 19 year olds.  Each of the schools not owned by the Company use the Fairview brand under licence from the Company accessing the resources of the Fairview Network.

The school in Kuala Lumpur is the largest and flagship school that uses the Fairview brand, whilst the school in Johor focuses on the expatriate market in Singapore and so is internationally focused.

The Company plans to acquire more schools which can offer international education including the International Baccalaureate programmes both in Asia and the UK.  The Company in particular believes there is an opportunity to acquire underperforming private independent schools in the UK and adapt its product offering to be authorised to offer the International Baccalaureate programme.  With a rise in popularity of the International Baccalaureate programme in both the independent and state sector in the UK, with a growing acceptance of International Baccalaureate graduates by UK universities, the Directors believe that the Company's and Fairview Network schools will appeal particularly to the ASEAN, Mainland China and Hong Kong market; particularly families looking for an educational foundation in the UK prior to studying at a UK university.

Interim results for the six-month period ended 31 December 2024

Chairman's report

I am pleased to present our inaugural interim results since joining the London Stock Exchange last October.

One of our most significant KPIs is student numbers.  The mid-year typically sees a seasonal decline, often due to expatriate job relocation at the calendar year end, and 2024 was no exception.  We entered 2025 with 710 students enrolled across our two schools.  However, this needs to be seen in the context of the 31 enrolments and applications already received for the coming year, representing a further 4.4 per cent. improvement with, we expect, more to come as the new academic year approaches.

As I outlined in our operations and strategic update on 17 January 2025, this early success in forthcoming enrolments and applications is particularly pleasing given the increased resources we have put into marketing our schools since our IPO.  These initiatives are already bearing fruit.

Both of Fairview's schools have the ability to take on greater numbers of students, with overall capacities of 1,500 and 750 in Kuala Lumpur and Johor Bharu respectively.  With the Group therefore only operating at around one third of its maximum capacity, but nevertheless trading profitably, the economies of scale that exist within our business model will be apparent to our shareholders and underpins our plans for organic expansion.

Despite the seasonal impact on student numbers, we were nevertheless able to increase revenues for the period by 4.8 per cent. to GBP2.78 million (2023: £2.66 million) by successfully implementing a 7 per cent. increase in average fees.  We are mindful that Fairview offers very competitive education costs alongside delivering a leading International Baccalaureate curriculum and this competitive pricing model does provide us with opportunities to effect increases in school fees in future financial years in line with cost increases.  Other international schools may not have that flexibility.  It is well publicised in the United Kingdom for example that schools are needing to cut costs to balance the VAT and National Insurance burdens imposed on them.  Eventually cost cuts reach the school's facilities thereby, potentially, impacting what they can deliver to their students.  Fairview, in contrast, is less impacted by such restrictions.

The success of our marketing programme naturally comes with an expense, and the increase in our cost of sales in the period has been largely driven by the additional travelling of our team to events both within and beyond Malaysia as they seek to meet new families.  Our schools are also supporting 28 students on scholarships amounting to approximately £77,000 during the period and a further 23 students who received an academic distinction award. The effect of this added to our financial assistance costs which we reflect in our gross profit calculation.

By their nature, schools have a long-term relationship with their customers - namely families - and it has always been Fairview's policy to support and reward our students.  We are confident that these gestures are repaid both through the ongoing loyalty of our customer base and the reputation this affords us in the communities that we serve.

The combination of these higher costs reduced our gross margin in the period to 50.3 per cent. (2023: 54.2 per cent.) but we anticipate a recovery in future periods as our marketing programme continues to deliver higher student numbers.

It is inevitable that this period's accounts would reflect the IPO and the impact on our bottom line was mainly due to non-recurring administrative expenses amounting to £609,544 in the period to 31 December 2024 relating to the Company's IPO on 11 October 2024.  In addition, one of the other companies in the Fairview Network partially repaid loans in June 2024 as part of the pre-IPO restructuring that we carried out. As a consequence, interest received in the period was around a third of the corresponding period ended 31 December 2023 amounting to £126,000 (2023: £335,000).  This is reflected in the reduction in other operating income. Outside of these one-off transactional costs, the Board continues to manage its budget tightly and the Company benefits from resource sharing within the Fairview network.

We have presented our interim results on the basis of merger accounting with our two subsidiary companies, Fairview Schools Berhad and Fairview International School Nusajaya Sdn Bhd which operated our schools in Kuala Lumpur and Johor Bharu respectively, joining the group on 1 July 2024.

Returning to how I began this review, the Company achieved a significant milestone during the period with its shares being successfully admitted to the London Stock Exchange's Main Market and commencing trading on 11 October 2024. We are one of very few companies from Malaysia to achieve this feat and, likewise, one of very few international school businesses to be quoted on a global stock exchange.  The exposure that this gives us, as well as the validation of the quality of our management, should not be underestimated and we expect in time this distinction will continue to attract families to our schools.

As I explained in our operations and strategic update on 17 January 2025, since completing our IPO, we have continued to assess opportunities to expand our business, examining both acquisitions and new builds applying the criteria of economic growth, demand for quality education and sustainability in their assessments.  As well as South-East Asia, and Asia generally, which holds a number of attractions given the rising demand for international education, the United Kingdom remains a core focus for us, reflecting both the positive attitudes of Asian families to a British education and the growing interest in the IB curriculum.  The recent VAT and National Insurance changes on independent schools is, as expected, producing numerous opportunities as schools experience falling demand and higher costs in the new tax regime.   As I explained above, Fairview's cost-effective model and resource sharing capabilities provides the resilience and growth potential to take advantage of these opportunities.

The corporation tax rate in Malaysia is 24 per cent. with final tax liabilities usually being determined in the financial year following completion of the final tax return and audit.  This can result in the effective tax rate for the period differing from the headline rate.  This is the case in the period under review in which our one-off IPO costs have reduced profits creating an apparently higher tax rate in the profit and loss account.  This is not reflective of future periods.

Cash balances as at 31 December 2024 were £1.05 million (2023: £0.94 million). Currency movements, IPO non -recurring transactional costs and the Group reorganisation that was undertaken ahead of the IPO account for the most significant cash movements during the period, none of which reflect the underlying trading performance.  The Company contributed £100,000 to increase the paid up share capital in the Johor Bahru campus in compliance with the Ministry of Education's requirements for foreign ownership. 

The principal risks and uncertainties associated with the business and operations of Fairview are set out in the prospectus of the Company dated 4 October 2024. The Directors believe that these risks and uncertainties remain relevant to the business at the time of finalising these accounts for the six months ended 31 December 2024.  A copy of this prospectus is available on the Company's website at www.fairviewplc.uk.

Fairview International PLC

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 December 2024