Feeds

Not so fast with the bubbly, RM: IT biz faces £40m schools-sized hole

Supremo warns of harder times as education moolah dries up

High performance access to file storage

Just when education supplier RM is getting itself back on track, it has revealed that a £40m black hole will emerge in its accounts when Blighty's Building Schools for the Future programme is finally shuttered.

The UK firm stumbled in fiscal 2011 as it posted steep losses, managed to recover somewhat in fiscal 2012 and is back on its feet at the half-way point of this financial year - for the time being, anyway.

Turnover for the six months to May 2013 fell 2.6 per cent to £118.8m, excluding businesses it exited. Including those units, sales fell 5.3 per cent from £124.7m. Last year RM changed its year-end month to November.

Chairman John Poulter warned [PDF]: "The UK education sector is, and will remain, under financial constraint and revenue is expected to decline."

The firm reckons it will pick up some Building Schools for the Future (BSF) activity in the second half of this year, but forecasts a £40m reduction in projects by 2015. That is a lot of schools equipment sales to find in a relatively short space of time.

The Tory-Lib Dem coalition put a bullet in Labour's BSF scheme - a troubled multibillion-pound investment programme to improve UK education - when it came to power in 2010 - and RM was by far the largest benefactor of the scheme. Today's government favours academies and free schools projects instead, and RM has had some success here.

The bottom line, however, did move in the right direction for RM, with operating profits coming in at £5.35m compared to £1.1m a year earlier. Net profit was £3.8m, up from a £155,000 loss.

This shareholder goodness was helped in part by a drop in operating expenses, but also because RM did not saddle the cost of offloading businesses nor did it face share-based payment charges this time round.

The Education Technology (ET) unit posted sales of £82.6m, a little off the pace with the £83.9m filed a year ago but adjusted operating profit climbed to £2.7m from £1.6m.

This was against a "backdrop of public sector budgetary constraints" as RM felt the pinch from austerity measures and competition remained intense.

The ET unit, which includes managed services, internet services, network software, digital platforms, hardware and support, requires the "immediate attention" of the CEO, said Poulter.

"Considerable effort is being directed to improve the profitability of the ET business by both commercial and efficiency improvements and through an appraisal of each of the constituent elements of the business," said Poulter.

Some hopes may be pinned on RM Unify, the school level "Platform to the Cloud" and the RM Book e-books platform.

The Education Resources unit - distribution of curriculum products and materials - declined 7.9 per cent to £26.4m and made an operating profit of £3m, down from £3.9m.

The Assessment and Data Services division was the only one to post growth; sales were up to £9.8m from £9.5m. Operating profit jumped from £600,000 to £900,000. ®

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Nokia offers 'voluntary retirement' to 6,000+ Indian employees
India's 'predictability and stability' cited as mobe-maker's tax payment deadline nears
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.