RM admits 'more work to do' as growth slower than expected

Performance was affected by delayed shipments in RM's Resources division

RM has said there is "more work to do" as it revealed its growth has been slower than expected.

The education technology supplier has reported its interim results for the six months ending 31 May 2022 in its latest trading update.

Figures show the company's adjusted operating profit fell 42 per cent year on year to £5m while margins fell from nine per cent to five per cent.

While revenue was up four per cent year-on-year to £100.3m, RM says it is "worth noting that revenue was lower than anticipated".

Performance was affected by delayed shipments in RM's Resources division and challenges associated with the implementation of its new IT platform.

"The macroeconomic environment is challenging and together with IT implementation impacts, will dilute profit conversion in the short-term," the business said in a statement.

It also warned that although school funding is increasing in the UK, the backdrop with regard to salaries, energy costs and inflation "create headwinds that will impact school budgets and will need to be monitored carefully over the next 18 months".

However, RM says it is continuing to see positive customer demand for products and services.

It added that improving underlying sales momentum across divisions and phasing impacts of delayed shipments in RM Resources from H1 to H2 "supports positive revenue outlook".

Chief executive Neil Martin said: "RM is starting to build encouraging revenue momentum across the Group which demonstrates the strength of our offer and market positioning.

"At the same time, it is clear that there is more work to do to translate this into the levels of operating margin that we aspire to. We are addressing this through the 2-year transition period which we outlined at the beginning of the year.

"Our long-term outlook remains positive, with the opportunity to capitalise on leading positions in resilient markets. Nearer-term, the work required to improve our operating platform and manage the challenging economic backdrop creates volatility that we must manage while we structure ourselves for long-term, sustainable success."