RM back in the black after sale of assets

Educational software supplier RM returned to a profit during the half year ended May 31st after being strenghted by a period of review and restructuring.

Profit for the six months was £0.6m compared with a loss of £1.8m the same period the previous year, on revenues of £124.7m (2011 H1: £133.0m), boosted by a decrease in operating expenses and sales costs as well as a period of reorganisation which saw it sell a number of business units and ditch 17% of its workers.

In a statement the company warned that due to the seasonality of RM's business, interim results are not a good indicator of full year performance. However it was keen to emphasise that operational delivery will be a major focus area for the second half, with 2012 being the most significant year in terms of new school openings under the Building Schools for the Future (BSF) programme.

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"Following the Strategic Review in September 2011 and the resulting actions, RM is trading profitably and has a strong balance sheet, with cash at the highest level since September 2007. Over the past 6 months, the focus of the group has evolved from operational restructuring to reinvigorating innovation to develop exciting new offerings for the education sector.

"While the board anticipates group revenue will continue to decline for some period due to the phased conclusion of the BSF programme and the continued pressure on hardware and IT infrastructure, in the medium term, RM's new offerings potentially provide an exciting channel for distribution of digital content and applications, built on the group's leading position in the UK education sector.

"The education sector remains challenging with continued budgetary pressure and uncertainty due to government policy changes, an environment that the board anticipates will continue for the foreseeable future."

A proposed dividend of 0.75p per share was approved on July 4th (2011: 1.47p). Cash at the period end was £25.3m compared with debt of £7.6m at the same date the previous year.

NR