Primary schools pump up RM profits

Government-funded sales bonanza

RM (Research Machines), Britain's top IT reseller to the education sector, saw soaring spending by primary schools boost interim sales by 41 per cent. The Oxfordshire-based company recorded £71.1 million turnover for the six months ended 31 March 1999, against £50.5 million for the same period in 1998. Pre-tax profit was up to £2.5 million, compared to £600,000 the previous year. Earnings per share grew to 1.9 pence, up on last year's 0.5 pence. RM said its own sales to primary schools surged by 140 per cent, due to the government pumping funds into the area since last April. Richard Girling, RM's CEO, forecast the quick growth in this area continuing for the next two to three years. The UK education market was responsible for 95 per cent of RM sales for the period. Much of this spending stems from the government's Standard Fund, a four-year plan to invest £700 million in IT in primary and secondary schools. Much of the cash, aimed at getting schools hooked up to the National Grid for Learning, has gone to the most needy institutions -- primary schools. Tim Pearson, RM software and integrated systems director, told The Register: "Primary schools will continue to get the lion's share of government funding for IT. They have a lot of catching up to do on secondary schools." According to Pearson, the group will also keep its hardware manufacturing business. "Our volume in this area is growing, though it is becoming less important to the company's finances," he said. "Maybe things will change one day if hardware standards improve," said Pearson. But at present RM needs to keep a degree of control and offer a complete package to schools. Pearson was optimistic about the second half of the year, adding that the company was not fazed by the many new rivals trying to cash in on the education sector. ®

Sponsored: Designing and building an open ITOA architecture