RM shares tank on gloomy update

Education specialist admits it is unlikely to hit its full-year targets

Education-specialist technology supplier RM's share price tanked by 15 per cent this morning after it warned results for its fiscal year to 30 September may fall short of previous expectations.

In an interim management statement covering the period from 1 April to 21 July, the London-listed firm admitted that education market conditions remain "difficult" in the UK and the US.

RM stressed that it was not all doom and gloom, claiming that, over the next few years, it would benefit from the cash flow derived from its past investment in the axed Building Schools for the Future scheme.

Its net debt has also halved year on year to £11m, as of 30 June.

"Due to the seasonality of many of the group's businesses it is difficult to predict accurately the outcome for the current period until after the summer," it stated.

"However, the Board has undertaken a forecast review and the balance of probabilities suggests an outcome that may be below the Board's previous expectations."

RM had already stripped out £5m of costs in its H1 2011 to 31 March, a period in which sales fell 15 per cent annually to £133m and pre-tax losses hit £1.4m.