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RM plc - The Assignment Report UK Education Industry Company of the Year 2018

publication date: Jan 1, 2019
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RM plc, the supplier of technology and resources to the UK and international education sectors is The Assignment Report’s UK Education Industry Company of the Year 2018.

2018 was another positive year for RM, despite continued pressure on UK school budgets. Revenue increased significantly in FY18, driven by the full year benefit of the £59m Consortium acquisition and strong international sales growth, according to RM’s latest trading update.

Led by David Brooks, CEO, RM has repositioned in the last six years from a mainly low margin technology business impacted by the closure of the Building Schools for the Future programme and a break-even hardware business, to a more diverse higher margin supplier of technology services and resources. Operating margins are now almost double what they were in 2013.

RM’s transformation is in part due to the Consortium acquisition, which completed in June 2017 and has given RM a market leading position in the distribution of curriculum and education resources to UK primary schools and nurseries. As a result, RM Resources, which comprises TTS and The Consortium, is now RM’s largest business unit by revenue, accounting for 54% of the company’s total revenue for the six months ended 31 May 2018. RM Resources also benefited from international sales growth at TTS in 2018 (international revenue up 12% at 31 May 2018).

During 2018, RM Results, which provides e-assessment and data services, and is the UK’s largest provider of on-screen marking of high stakes schools’ exams, secured three international e-assessment contract wins with the Singapore Examinations and Assessment Board, the National Examination Centre, Lithuania, and the New Zealand Qualifications Authority.

RM Education, which supplies IT software and services to UK schools and colleges, delivered a double digit adjusted operating margin in 2018 (2017: 9.3%), as a result of a reduction in the division’s cost base. RM’s strategy for RM Education is to move increasingly to recurring revenue streams while improving margins. In 2017 recurring revenue accounted for 68% of RM Education’s total revenue – almost double the proportion since 2013 (37%).

Cash generation was also strong in 2018, with net debt down £7m to £6m (2017: £13m) at 30 November 2018. 

RM plc in numbers

 

Year ended

30 November

FY18

£m

F’cast

FY17

£m

FY16

£m

FY15

£m

FY14

£m

FY13

£m

Revenue

215.5

185.9

167.6

174.4

202.5

261.8

Adjusted operating profit

26.0

22.1

18.8

18.0

18.5

17.2

Adjusted operating profit margin

12.1%

11.9%

11.2%

10.3%

9.1%

6.6%

Diluted EPS (adjusted)

23.7p

21.9p

17.4p

16.2p

16.4p

12.6p

Employees at year end

Not available

1,907

1,731

1,899

1,778

2,018

Note: The FY18 numbers are based on the consensus forecast reported by Bloomberg on 10 December 2018. The FY18 consensus forecast is for adjusted EBIT, not adjusted operating profit, and is therefore not directly comparable to previous periods. RM expects results for FY18 to be slightly ahead of expectations.


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