RM has reported double-digit slumps in its Education division and its managed services revenue, which it partly attributes to changes in the government's education policy.
For the 12 months to 30 November 2015, RM Group saw adjusted operating profit slump 1.8 per cent to £18.2m on sales which fell 12 per cent to £178.2m. RM Resources and RM Results enjoyed a 7.6 per cent and 10.4 per cent sales hike to £63.5m and £30.7m respectively, while RM Education saw sales fall 28.3 per cent to £80.2m.
In a London Stock Exchange announcement, the firm said RM Education "has been reshaped and is now on a stable platform for the future".
It put the sales slump in the division partly down to a slow down following the end of the Building Schools for the Future (BSF) scheme, which was a Labour initiative designed to overhaul schools across the country which was scrapped in 2010 by the coalition government.
It said on top of the "reduction in new school openings under BSF", changes in the way schools are governed also had an impact on its sales.
"Purchasing decisions in England have been increasingly devolved to schools and academy groups and away from central government and local authorities," the firm said. "This has required a change in the way the division engages with its market and has resulted in an increased focus on the top 2,000 customers."
The end of the BSF also had an "anticipated" impact on its managed services revenue, which fell 35.5 per cent annually to £32.2m. It added that despite this, retention rates of existing customers "increased significantly" during the year to more than 80 per cent. RM signed 44 new managed services deals in schools last year.
RM's chief executive David Brooks is pleased with last year's performance.
"2015 was another good year of progress for the group," he said. "Market conditions in the UK education sector will continue to be subdued as a result of increased pressure on school budgets. Our strategy continues to focus on retaining a leading market position for all three businesses whilst maintaining our stronger operating margins."
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