Interim Management Statement

RNS Number : 7750G

RM PLC

08 February 2010

 



8 February 2010

RM - Interim Management Statement

RM is today issuing its Interim Management Statement for the first half of its financial year, covering the period from 1 October 2009 to 5 February 2010.

Trading update - expectations for the full year unchanged

Trading in the first quarter of RM's FY-2010 was supportive of management's expectations as set out in the Group's 2009 annual results announcement on 23 November 2009. However, RM's business is highly seasonal and performance at this stage of the year is not a reliable indicator for the year as a whole.

In line with its normal programme of communications with shareholders, RM anticipates issuing a pre-close update for the first half of its financial year, which ends on 31 March 2010.

Business performance

There has been good progress across the Group's three divisions:

£ RM was chosen by Essex County Council and Hull City Council as the ICT supplier in the consortia appointed selected bidder for their BSF (Building Schools for the Future) programmes. These two wins mean that RM has now been appointed for 15 BSF projects, providing a significant level of committed revenues for the RM's Learning Technologies division. Since the start of the year, RM has delivered four more BSF schools, bringing to 45 the total number of BSF schools for which the Group is providing ICT services.

£ Medium-term visibility in RM's Assessment and Data division has further improved with three new contract wins: two new on-screen marking relationships, with the QCDA and International Baccalaureate; and a data services project for the TSA.

£ Investment in supporting the growth of RM's Education Resources division continues, with a strengthened management team and the commissioning of the Group's new warehouse facility in Nottinghamshire. Operational delivery from the new warehouse is going well.

RM continues to invest in developing its international businesses and particularly RM USA. There was significant US interest at January's BETT education technology show and meetings with senior US policy makers reinforce the management's view that the US represents a significant opportunity for RM.

Terry Sweeney, CEO of RM, said:

"We are making good progress in each of our three divisions and with our international business. During the period we have seen a number of major contract wins, which reinforce our market position and further build committed revenues. The recent BETT show in January provided us with an excellent opportunity to show UK and overseas visitors the full range of the Group's innovative education solutions in a 'real school' learning environment.

"In December, the Government's Pre-Budget Report confirmed year-on-year growth in education spending plans for government year 2010/11. These budgets will be allocated to schools by March 2010. This planned increase is on top of real-terms growth in the current government year. Against this background, our expectations for the year are unchanged."

Financial position

RM's financial position remains strong. The Group has a £25m bank facility, committed to July 2013, which is currently £8.3m drawn. In addition, the Group has annual working capital facilities of £38m agreed for the current financial year.

For further information please contact:

Mike Greig/Phil Hemmings, RM plc	08450 700300
Andrew Fenwick/Chris Blundell/Franziska Boehnke, Brunswick	020 7404 5959

About RM

The RM Group is a leading provider of educational solutions to schools, colleges and universities, local government and central government education departments and agencies. RM works closely with educationalists to create new products, processes and technology which improve teaching and learning. RM is listed on the main market of the London Stock Exchange under the symbol RM.L, ISIN GB0002870417. Further details are available at www.rm.com/investors and through the Group's investor blog at rminvestors.wordpress.com

Seasonality

RM's business is seasonal reflecting buying patterns in the schools marketplace, with a large majority of the year's profit arising in the second half. In addition, the first quarter of the Group's financial year is the lowest for revenue and order intake. As a consequence of these factors, performance at this stage is not a reliable indicator of the outcome for the full financial year.

Significant developments during the period

On 5 November 2009, RM was appointed selected bidder for a contract to provide ICT services to Hull City Council's BSF programme. The project is expected to be worth £16.5m.

On 9 December 2009, RM confirmed that it had reached financial close for a contract to provide ICT services to the Salford and Wigan BSF programme. The first stage of the project is expected to be worth £26m.

On 10 December 2009, RM was awarded a £3m, four-year contract to provide data analysis services to Tenant Services Authority.

On 5 January 2010, RM confirmed that it had agreed a framework agreement with the International Baccalaureate to provide on-screen marking services. The framework is expected to be worth in excess of £7m over five years.

On 5 January 2010, RM was appointed preferred bidder for a framework agreement to provide on-screen marking services for the government agency, QCDA. The framework is expected to be worth up to £1m during FY-2010.

On 2 February 2010, RM was appointed preferred bidder for a contract to provide ICT services to Essex County Council's BSF programme.

 

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