RM sales spike by a fifth

School success: RM claims education spending remains strong

Education specialist RM enjoyed a solid first-half to the fiscal year, with revenue up more than a fifth and committed revenue for the coming years topping £400m.

For the six months to the end of March, revenue rose 21 per cent year on year to £141.9m. Pre-tax profit remained flat on last year's figure of £200,000.

Committed revenues (which include RM's order book), deferred revenues and projects currently at selected or preferred bidder stage reached a record £425m. This marks a 3.7 per cent hike on last year's figure of £410m. Half of committed revenues will fall within a year and a further fifth within two years.

The system builder's Learning Technologies division is enjoying a particularly fruitful year and banked half-year revenue of £106.1m. Sales were bolstered by RM's acquisition of US education specialist Computrac in November, but organic growth also reached 16 per cent.

Profit for the Learning Technologies arm hit £1.7m, compared with a loss of £800,000 last year. RM attributed this return to profitability to its burgeoning software-as-a-service business.

RM's Education Resources unit swelled revenue by seven per cent year on year to £27.9m. However, profit shrank by more than two-thirds to £1m, mostly owing to difficult conditions in the UK curriculum software market, RM claimed.

Revenue from the group's Assessment and Data arm rose 11.3 per cent to £7.9m, although profit declined by a fifth to £400,000. Overall, Computrac contributed £7.5m in revenue and RM claimed its initial integration with US-based RM Educational Software was complete.

The firm took the opportunity to reiterate its three-pronged strategy for the coming months and years, including its commitment to focus entirely on education markets. It also outlined plans to operate as a broader education specialist, extending its reach beyond its historic IT expertise. Finally, RM claimed it was targeting further international revenue.

To that end, it claimed these results represented strategic progress and highlighted the fact that overseas revenue now accounts for 12 per cent of the total figure, up from seven per cent last year. RM claimed there was little evidence thus far that the economic downturn had impeded spending on education, both in this country and the US.

It cautioned, however, that medium-term growth in UK education spending would be lower than it has been over the past decade. RM claimed it was taking care to manage its cost base prudently to ensure it could continue growing for the foreseeable future.

Chief executive Terry Sweeney said: “The first half of 2009 has been a successful period for the RM Group and has reinforced our confidence in our plan for the year. Strong market positions in each of our chosen business areas, along with our financial position, mean we are well-placed for further strategic development.

“As we always comment at this stage, the first half of RM’s financial year is not a good indicator of results for the year as a whole. However, with the UK education budget for government year 2009/10 up six per cent in cash terms, and revenue growth anticipated from BSF, Computrac and general education resources, management’s expectations for this year are unchanged."