News Column

RM Raises Interim Dividend As Profit Improves Despite Revenue Drop

July 6, 2014

Hana Stewart-Smith

LONDON (Alliance News) - RM PLC said Monday it expects its performance in the second half of the year to be similar to its first half, as it raised its dividend on an improved profit in the half year ended May 31,despite seeing revenue decline due to the restructuring in its largest division.

The educational technology company proposed an interim dividend of 0.96 pence, up from 0.84 pence a year before.

RM posted a pretax profit of GBP6.7 million for the recent half, up from GBP4.5 million in the same period a year earlier, despite seeing revenue fall to GBP92.1 million from GBP118.8 million, hit restructuring of its largest division during the year. However, this was offset as the company also cut its cost of sales to GBP57.0 million from GBP85.3 million.

RM said it continues to reshape its largest division, Education Technology, discontinuing the manufacturing of hardware devices and sales of stand-alone personal computer devices, and cutting headcount to 1,885 from 2,201.

As a result, revenues in this division shrank to GBP52.7 million from GBP82.6 million. The company said that it is shifting the business to meet customer needs as the market has "changed significantly", after the UK government scrapped its Building Schools for the Future plan in 2010.

RM continues to expect revenue from contracts relating to the axed plan to fall over the next two years.

Additionally, within the Education Technology segment, its infrastructure solutions business saw more subdued sales than expected.

Whilst the poor performance from this division hit revenues for the half year, this was partly offset by growth in its Assessment and Data Services division and its Education Resources division.

In Assessment and Data Services, revenue rose to GBP10.1 million, as the division continues projects with education charity AQA and it won a contract with the Caribbean Examinations Council.

Education Resources revenues rose to GBP29.2 million from GBP26.4 million, driven by growth in direct catalogue and online revenue, and in international revenues.

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Source: Alliance News

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