RM posts flat revenues amid 'difficult schools market'

RM Education arm sees interim sales wilt by 6.5 per cent

Edtech giant RM has posted flat sales as a "difficult" schools market dragged on its interim results.

The London-listed outfit saw revenues inch up one per cent year on year to £95.5m in the six months to 31 May 2019, despite enjoying a cosmetic benefit from its adoption of the IFRS15 accounting standard.

RM's heritage tech arm, RM Education, saw revenues fall by 6.5 per cent to £29.5m.

Resourcing arm RM Resources posted a 3.6 per cent drop in revenues to £49.2m, while software arm RM Results saw revenue bounce 37 per cent to £16.8m.

Despite the static top line, RM saw adjusted operating profits swell by 17 per cent to £9.7m, with RM Education's contribution porking up 19 per cent to £4.3m.

"The first half of the year has seen steady progress with profit growth in our two education technology divisions, RM Results and RM Education whilst the Resources division continues to progress its organisational consolidation against a challenging UK market backdrop," said RM CEO David Brooks.

"In June this year, we concluded the acquisition of the assessment software provider, SoNET, which demonstrates our ambition to invest in new technology. The interim dividend has been increased by five per cent and our outlook remains to deliver full year expectations."

IFRS15 had a positive impact on RM's overall revenues but left a £400,000 hole in RM Education's top line.

RM isn't the first tech supplier to adopt the new accounting standard, with Softcat's roll out of IFR15 having a "presentational" impact to the tune of £174m in its first-half revenues.