RM's first-half results show a healthy boost in profit, but the system builder has warned that the Building Schools for the Future (BSF) gravy train will come to an abrupt halt when 2012 is over.
For the six months to the end of May, the Oxfordshire-based firm saw sales decline three per cent on the corresponding period last year to £124.7m. However, operating profit more than doubled to £3.9m.
After concluding a strategic review in September 2011, RM embarked upon a divestment programme to rid itself of its non-core assets. The great sell-off was completed in May with the sale of furniture firm Isis Concepts, the fifth disposal in less than seven months.
Coupled with a programme of redundancies, the strategic shake-up saw the firm's headcount reduce from 2,747 in May 2011 to 2,280 by the start of last month.
RM's net funds have also been on an upward curve, rising to £25.3m by the end of H1 FY12, their highest level in almost five years.
For the second half of this year the system builder is set to focus on fulfilling its BSF contracts, with 2012 representing the programme's biggest year, as a raft of schools are finally opened before the scheme is gradually laid to rest for good.
With BSF being phased out, RM expects that "group revenue will continue to decline for some period", a situation not helped by "the continued pressure on hardware and IT infrastructure [spending]".
During its fiscal second half RM is to launch three new cloud-based offerings: RM Books; RM Unify; and RM At Home. Despite the turmoil ahead in the market, RM sounded a note of cautious optimism in today's statement, explaining that "following the strategic and the resulting actions, RM is trading profitably and has a strong balance sheet".
The education specialist announced today that 16-year RM veteran David Brooks joins the boardroom set-up in his new role as chief operating officer, which he assumed on 1 July. Heading in the other direction is Bryan Carsberg, who has retired after nine years as a non-executive director.
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