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I pick up a lot of doubts about RM in schools. In Hackney, for instance, RM is widely hated and will certainly lose the contract in 2014. One critique of it: http://bit.ly/WHfHfq
Daniel Stewart maintained its "buy" rating for RM (RM.) with a target price of 130p. The teaching software developer completed a planned restructuring, with the broker noting a 13 million pound reduction in borrowings and a 17% cut in staff as it disposed of loss making businesses. Therefore, while Daniel Stewart forecasts a 10.5% decline in revenues for 2012 to 313.9 million pounds, the broker expects earnings per share to increase to 11p, from 7.2p for 2011.
Tempus rather likes RM, the school products supplier. After a tricky few years it is now focusing on what look like three sensible products: e-books, sign-on software for pupils and teachers working from home and parent and child software. Tempus also rates the boss of the firm, Martyn Ratcliffe, and it’s Ratcliffe’s track record with turnarounds at Sagentia an Microgen that lead Tempus to suggest RM as a “long term punt”. Buy.
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.
"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."
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.
Could anybody tell me about US OIL and GAS PLC
"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."
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.
Educational software supplier RM has said that following a review of its UK operations it has decided to sell a number of its businesses, including ISIS Concepts, the sale of which has now been completed for £205,000. The sale was made to ISIS Concepts Holdings, a new company formed by Nick Topliss, who owned ISIS before it was sold to RM in 2009, and has remained as its Managing Director. Rob Sirs, former Managing Director of RM, is expected to invest in ISIS Concepts Holdings in the near future. In the financial year to date, ISIS has been loss-making. RM has agreed to provide a short-term working capital loan facility of up to £850,000, secured on freehold property and other assets valued in excess of that figure.
Buy: RM Education (RM.) "This company supplies information technology to schools in all its forms - hardware, software and networks. It is by far the largest supplier of these types of products in the UK and it has very good contacts at the individual school level. A lot of its competitors go through the Building Schools for the Future programme instead. "RM has been through a tough time recently because of the cuts the government is making to the education budget; 80% of a school's costs are staff and if the choice is between getting rid of teachers and shrinking the IT spend, most will opt for the latter. "As a result, RM's shares have slipped significantly. Yet, it is this recent weakness that has become the opportunity. "Initially the company was slow to react to the new environment, but major changes were made to the board last year. This is one of the things I look out for - management change can make a significant difference. "In this case, Martyn Ratcliffe came on board as executive chairman. He used to run Dell Europe, and has a reputation for creating value. "Ratcliffe refocused RM on its UK schools franchise. The company had bought businesses in America and Asia. "He exited all that. He believes that the group is in the business of distribution to schools rather than specifically technology. He is therefore also looking at distributing, for example, insurance or energy. "As more schools convert to academies, it takes them out of local authority control and plays to RM's strengths. We believe that they should be able to gain market share, and share price performance will pick up."
B/E in 3 months then :)
Sorry to see there are still angry and immature young men around. (re HW), your post is another vindication to keep clear of the company! An understanding of a business and market research are two different aspects of financial success and recording ones views do not constitute an 'outburst'. However, I am sure LSE would be highly delighted if a comment posted on their boards would in any way 'ramp' or even 'de-ramp' a company, but I suspect our observations are of little noteworthiness! For those with shares I hope break even comes swiftly!
Looking at your recent outburst "the bubble burst" and your now softening views on this company, it seems u just wanted to deramp the good name of RM with total false witterings, u obv work for some naff competitor, well I'm glad your pathetic views have well and truly shown u for what u are. RM is going places with or without you and your bull****.
Very happy to see him buy so many. Perhaps I might get to break even within 6 mths :)
It looks as if Mr Ratcliffe shares the same optimism as yourself, he is sure expecting to see a return on his investment, as 750K takes a bit of finding! I hope it works out well for him - as well as his competitors! The next eighteen months will be the most challenging and then replacement systems will be needed - big time, I guess. Good luck all shareholders in RM! (Especially the little guys!!)
Martyn Ratcliffe, Executive Chairman of educational software supplier RM, has bumped up his stake in the firm with the purchase of one million shares. Ratcliffe bought the shares, which cost him 75.00p each for a total of £750,000, just three days after the company reported falling revenue and profit for the 14 months ended November 30th. Revenue for the period fell from £380.1m to £350.8m, while adjusted operating profit dropped from £22.6m to £10m. Loss before tax remained stable at £23.4m, compared to £23.9m the previous year. During the period the firm committed a revolving three year bank facility of £30m to replace the old facility.
from the ashes will rise a phoenix
Work for a competitor actually.
OK, on those terms I can see that RM may bounce along the bottom for a while! No in fact you are correct and it is not as gloomy for those who stick with the smaller company as either employees or shareholders. (I would love to ask how long you have worked for them! but I guess I'm not allowed to). Besides even the share price has stabilised through the day or at least not fallen further and there is also the dividend to come and not all co's can do that!
Cash will only burn away if losses persist! With the reduction in staff numbers (sorry for those that lose their jobs) and other costs (leases etc). The sale of loss making businesses (there was too many) and a new mgmt with focus on recurring revenues I can see a positive outcome. I admit that RM will be a lot smaller, with revenues below £200m pa again, but if they can deliver a £10m quality EBIT then the downside should be limited.
The poor return on capital and the reduction in staff numbers will weigh heavily on these shares for quite a time yet. Lack of competition in the market -(as yet?) will help a little but cash reserve will soon burn away. The company appears to rely on capital expenditure not regular 'service' income and capital expenditure is now very much reduced. That's why I think your idea of a 'strong cash flow' is difficult to reconcile. What could the light at the end of the tunnel be? An interesting mess to rescue value from and a challenge for an unfocused team.
I agree that the management had a very poor strategy. However, don't you think that the new team can rescue some value out of the mess. Although turnover is going to fall rapidly over the next few years, cash flow is going to be strong. At the end of the BSF project a market for educational systems / support will still be there. With an enterprise value of circa £60m @ say 69p / share there could be some value.
So the bubble has has finally been seen to have burst. A poor model for a business, interesting while it was working! I have never held shares in the company but have observed very closely. Never did like the employ, train (indoctrinate) , sell them some shares and then push them out into local government education departments to recommend/insist on RM computers in the schools system of expansion. Lobbying for the building schools programme, buying little peripheral businesses in the hope local authorities could continue to spend money they didn't have and training useless middle aged head teachers how to 'turn it off and then back on again' was soon going to be seen through by computer literate 'proper teachers' and was never going to make money long term for RM. No worthwhile R and D, no innovation and no vision - that has always been my observation of RM, (except for one visit to their virtual nonsense - just as they had spent another tronch of dosh on brick ends for teenagers!! it did all look very colourful but not a business!) RM rest in peace or pieces perhaps.
Shore Capital downgrades RM from buy to hold