BSF project bears fruit for RM

Hemmings: we keep hearing rumours about BT bidding, but there is not much evidence of it

Concerns that the Building Schools for the Future (BSF) programme would never be a profitable venture for VARs have been laid to rest by RM as it posted its annual results.

The system builder, which is the largest BSF supplier with 14 contracts under its belt, saw BSF revenue quadruple to £34m in its fiscal year to 30 September and expects it to become a profit-making activity this year.

The bid costs associated with BSF prompted Morse to exit the market in January and left others questioning whether the up-front investment required would pay off.

RM’s director of corporate affairs, Phil Hemmings, said: “There was always a question over whether it would be profitable, and now we are clearly saying it is. It was a bidding business for us, but now we are moving into delivery.”

Hemmings also said there were signs the BSF space is consolidating, with few new players entering the market. Ramesys is the second-largest player, while Civica, Northgate and Redstone have also established themselves as serious players, he said.

“We keep hearing rumours about BT bidding, but there is not much evidence [of it],” added Hemmings.

Hemmings said RM is currently bidding for 13 BSF contracts which it anticipates will come to fruition this fiscal year. He scotched suggestions that RM is eyeing up struggling rival Redstone, which yesterday confirmed that potential takeover talks for the business have ended.

“We will always look at opportunities in the marketplace but have nothing on the boil now,” he explained. “Redstone may have been in play for a while but my understanding is that it now has its head down and is getting on with it.”

Clive Longbottom, analyst at Quocirca, said: “RM has got that leverage in the schools sector to make the investment worthwhile.”