RM PLC
27 September 2001
27 September, 2001
RM plc - Pre-Close Update
RM plc, the UK's leading supplier of software, services and systems to
educational establishments, is providing the following update on trading
activity for the 12 months to 30 September 2001 in advance of the close period.
RM's business has a pronounced seasonal pattern, with the second half
generating the majority of the full-year profit. This year, following a 46%
growth in turnover in the first six months, order intake during the second
half - and in particular during the last quarter - has been lower than
expected. As a result, it is likely that the company's full-year profit before
tax and goodwill amortisation, whilst showing growth on last year's figure
(before exceptional provision) of £15.5 million, will fall below current market
expectations.
Gross margin percentage in the second half of the year has been significantly
higher than it was in the first half. This, as expected, returns the Group's
gross margin performance to its usual seasonal pattern. Furthermore, operating
expenditure has continued to be tightly controlled during the second half of
the year. The Group remains strongly cash generative and the year end cash
position is expected to be significantly ahead of last year.
Trading in the second half has been affected to a greater than expected extent
by changes in the way the government's Standards Fund for educational ICT is
being distributed in the current government year. Increased delegation of this
funding to individual schools has extended sales cycles and, in some cases,
caused schools to decrease the amount of their core budgets they allocate to
ICT expenditure.
Richard Girling, Chief Executive of RM plc commented, 'Whilst this is
disappointing news, we still expect to show growth on last year's profit and RM
remains the clear leader in the educational marketplace. With education
expenditure set to grow by 9% year-on-year, and continued government enthusiasm
for educational ICT, I am confident that our market continues to offer
attractive growth opportunities.'
- Ends -
For further information, please contact:
Richard Girling/Mike Greig, RM plc, 01235 826000
Andrew Fenwick/Fiona Fong, Brunswick 020 7404 5959
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