RM sees sluggish growth amid 'challenging year' for resourcing arm

New IFRS 15 accounting standards also affected revenue figure reported

RM posted flat growth for its FY19 which it attributed to a difficult year for its Resources arm and the adoption of the IFRS15 accounting standard.

The edtech giant reported a revenue rise of one per cent year on year to £223.8m for its year ending 30 November 2019. International revenue rose 18 per cent to £31.3m, somewhat offsetting the UK's slight revenue decline of one per cent to £192.5m.

Aussie e-testing software firm SoNET was acquired by RM last June and contributed £1.7m to the overall figure.

The adoption of IFRS15 resulted in a £2.4m reduction in revenue as well as a reduced operating profit of £1.5m.

The international accounting standard replaces existing revenue recognition guidance and "establishes a comprehensive framework for determining whether, how much and when revenue is recognised".

The London-listed firm saw revenue for its Resources unit decline by six per cent to £114.5m. CEO David Brooks said that this was reflective of the wider UK market.

"RM Resources had a challenging year of trading, particularly in the UK," he stated.

"This included declining legacy revenues from the planned closure of indirect channels and the focus away from non-education resources. Revenue in the UK was lower than last year, but in line with the wider UK competitive market decline. International revenues, after a very strong 2018, grew marginally year on year."

Turnover for its Education division grew by six per cent to £71.6m, driven primarily by its Services business - which includes hardware sales and installation services - which made up 85 per cent of the division's total revenue.

Its assessment unit Results saw revenue shoot up 19 per cent to £37.7m, with 59 per cent of that coming from new and existing international customers.

However, the London-listed firm saw revenue for its Resources unit decline by six per cent to £114.5m. Chief exec Brooks said this was reflective of the wider UK market and was driven by a planned £3.5m reduction in legacy revenue streams.

"Revenue and operating profit have been underpinned by a stronger underlying performance from our two technology divisions which have offset a challenging year in our Resources division," Brooks continued.

"We have continued to make good progress strategically, including the acquisition of SoNET. SoNET enables us to provide end-to-end digital assessment in this growing market. In the year ahead, we are well placed to address the market opportunities across each of our divisions."