Interim Management Statement
RM PLC
06 February 2008
6 February 2008
RM - Interim Management Statement
RM is today issuing its first Interim Management Statement, which covers the
period from 1 October 2007 to 5 February 2008.
Performance at this point in the year is not a good indicator of outturn -
either for the first half, or for the year as a whole. RM is a seasonal
business, with the majority of revenue and an even greater proportion of profit
occurring in the second half of the financial year. The first three months of
the Group's year is the smallest quarter, both for revenue and order intake.
Operational update
Since the start of the financial year, RM has been selected as ICT provider for
two out of the three BSF programmes that were awarded.
The previously indicated increase in BSF bid costs will fall largely in the
first half of FY2008, whilst BSF revenues, reflecting the timing of new school
openings, will be predominantly in the second half. This will increase
seasonality and, in line with management's expectations, profit in the first
half of FY2008 will be less than in the equivalent period of FY2007.
BETT, which is the world's largest educational ICT exhibition, took place in
London on 9 - 12 January and provided a good opportunity for judging the state
of the market. The high level of attendance at this event, combined with the
announcement of additional central government funding, confirms that educational
ICT remains a high priority for both policy makers and educational
practitioners.
A significant trend at BETT this year was the growing emphasis on learning
platforms. These products will increasingly be used by schools to facilitate the
government's aim of providing parents with real time school reports. RM's
Kaleidos product is well positioned to meet this need and is attracting
significant market interest, with encouraging order intake levels. Kaleidos has
a software as a service (SAAS) delivery model, so revenues from FY2008 orders
will be spread over future years.
Recent acquisitions, DACTA, SERAP and SpaceKraft, are all performing in line
with management's expectations.
Customer satisfaction (RM's most important non-financial measure) for the year
so far is 7.65, ahead of where it was at this time year last year.
Tim Pearson, CEO of RM, said:
'BSF, where we are the clear market leader, continues to be our major area of
investment. We've had further success in the first four months of the year,
winning two out of three bids awarded and achieving the highest score for ICT in
all three. However, the consortium nature of some BSF programmes does mean that
the best ICT isn't always selected and some schools can end up with second-best
solutions.
'Learning platform sales, which we see as the foundation of long-term strategic
relationships with many customers, are also progressing well. We have recently
signed a multi-year agreement with Staffordshire, one of a number of contracts
we now have in place. We have also been selected by the South West Grid for
Learning, an existing broadband Internet customer, as preferred bidder to
provide a range of innovative learning platform services.'
Material events and transactions during the period
On 1 October 2007, RM acquired SpaceKraft, a supplier of special educational
needs and early years products, for a net cost of £4.4m. SpaceKraft brings
further scale to the Group's Educational Resources business and significantly
increases the Group's existing SEN business.
On 5 October 2007, RM announced that it had been appointed, as part of the mpb
education consortium, preferred bidder to provide ICT services to the London
Borough of Hackney's BSF programme. Hackney's BSF programme covers six secondary
schools and three special schools in total, and will be delivered in three
phases. The initial phase covers three schools and 3,350 pupils.
On 17 January 2008, RM announced that it had been appointed selected bidder to
provide ICT services to Sunderland City Council. Sunderland's BSF programme
covers five secondary schools and three academies, serving a total of 8,000
pupils.
On 6 February 2008, RM announced that it had been appointed preferred bidder for
a £2.75m contract to deliver innovative network and learning platform services
to the South West Grid for Learning (SWGfL).
On 20 December 2007, RM appointed Jo Connell as an Independent Non-Executive
Director.
For further information, please contact:
Mike Greig/Phil Hemmings, RM plc 08450 700300
Mark Antelme, Brunswick 020 7404 5959
Notes:
Founded in 1973, the RM Group is a leading provider of educational products and
services 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
RM's business reflects buying patterns in the schools market place, with many
schools purchasing equipment ready for installation during the summer vacation.
In 2007, first half profit before tax (before exceptional pension credit and
amortisation of acquisition related intangibles) was 14% of that for the year as
a whole; first half revenue was 42% of that for the year as a whole.
In line with its normal programme of communications with shareholders, RM will
release a pre-close update prior to the end of the first half of its financial
year on 31 March 2008.
This information is provided by RNS
The company news service from the London Stock Exchange