Education player RM sees revenue jump, but IT supplier division struggles

IT software and services arm sees revenue drop, but managed services revenue increased

Education sector provider RM saw its revenue jump to over £180m in its last financial year, but it its IT supply arm suffered.

For the 12 months ending 30 November 2017, RM saw revenue hike 10.9 per cent year on year to £185.9m.

The jump was largely driven by the curriculum resources RM Resources arm, which holds the education and care unit that RM acquired from Connect last year. RM Resources saw revenue shoot up 42.1 per cent to £83.6m.

RM's Education unit, which supplies IT products and services to schools, saw revenue drop 8.4 per cent year on year to £70.6m, as a number of legacy contracts completed and margins in infrastructure supplying continued to shrink.

RM chairman John Poulter said: "[Last year] was a positive year for RM with revenue, adjusted operating profits and margins improved compared with the prior year.

"RM Education revenues declined as expected, following a reshaping of the lower-margin elements of the business in late 2016. Profitability and operating margins improved on the prior year, as did cash generation.

"The outlook for 2018 is still affected by continued pressure on UK school budgets. However, management is focused on delivering the synergies from the acquisition in RM Resources, while delivering continued good operating performance and developing strategies for top-line growth."

RM has shifted its focus away from hardware infrastructure projects over recent years and more onto software and services.

The IT supply arm saw its adjusted operating margin lifted from 7.6 per cent to 9.3 per cent. Managed services revenue also increased by 15.1 per cent to £28.1m.