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RM slumps after profit warning Date: Thursday 29 Sep 2011 LONDON (ShareCast) - Educational software supplier RM has warned that full year results will fall short of expectations after the usually strong seasonal uplift in the second half failed to materialise. RM said that in previous years, about 60% of revenues were generated in the second half of the year. “However, whilst the group has experienced some seasonal increase in the current year, this has been lower than the historic trend,” the company said. “As a result, for the 12 months to 30 September 2011, the board anticipates operating results below current analyst forecasts.” It added that it will incur charges related to a strategic and operation review of the company. Among the changes the company is making is a 13% reduction to its headcount from levels in July. At 9.20am, shares in RM were down by 31.75p at 69p.
Markets remain challenging at RM Date: Monday 16 May 2011 LONDON (ShareCast) - Education IT services provider RM swung to a pre-tax loss and said UK and US markets remain challenging amid ongoing spending cuts. Budget cuts in the UK and US has hurt demand for its services while trading conditions continue to be very challenging, RM explained. For the six months ended 31 March 2011 adjusted loss before tax of £1.4m compared to a profit of £1.2m in 2010. Restructuring charges increased to £1.8m from £0.8m the year before. Revenue for the half year fell 15% to £133m. Commenting on the results chief executive Terry Sweeney said, "We experienced challenging market conditions in our core markets in the first half, as customers continued to respond to changes in policy and funding in both the UK and the US." "We have realigned our cost base through a restructuring programme to reflect the changed conditions and to protect group profitability." RM said it continues to attract new business and win major contracts. Forward committed revenues rose 12% to £436m at 31 March 2011. The interim dividend rose by 6% to 1.47p.
http://www.investegate.co.uk/Article.aspx?id=201105160700106162G
short doing nicely :)
this is going to struggle in the future. OK, some BSF projects will continue for now, but with no further bidding, they will have to re-think their strategy going forward. They rely heavily on H2 for income, which could be down, and with £1.5m exceptional costs, they are looking good for a loss IMO. OPened a short today. Will need more than a director buy of a measly 3401 shares to convince me otherwise.
(Adds detail, executive comment, analyst comment) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Educational information technology vendor RM PLC (RM.LN) Monday played down fears that possible government budget cuts could hurt its business, as it said it has GBP505 million of long-term revenue committed and is bidding for up to 30 more 'Building Schools for the Future' (BSF) contracts. RM's products and services are delivered to both primary and secondary schools and include things like PCs, whiteboards and its own software. The firm said its broad spread of work means it should be well-placed to adjust to any new requirements laid down by the new Conservative-Liberal Democrat coalition government in the U.K. "Let's see what sort of changes they want to make first, but both the Tories (Conservative party) and Liberals support the academy program as being the favored approach and we're successful in that," Chief Executive Terry Sweeney told Dow Jones Newswires Monday. Under the BSF program, RM provides information and communication systems in schools in a particular U.K. council under long-term contracts. It has sealed seven BSF contracts so far in fiscal 2010, including two this month in Stoke and Essex, U.K., worth about GBP33 million and GBP8 million respectively. "If you look at BSF we will be working on that for years to come," Sweeney said. RM is currently bidding on 13 more BSF contracts and Sweeney said he was confident it will win "more than our fair share." RM's first half pretax profit rose to GBP393,000 from GBP228,000 a year earlier. Sales in the half, which ended March 31, climbed 10% to GBP156.4 million from GBP141.9 million a year earlier, boosted by strong revenue growth in education resources, BSF and its work in the U.S. Sweeney expects strong growth in the second half, which is traditionally RM's strongest period. "School budgets have been set for this year already. We're confident but remain alert to what the new government does," he said. Numis Securities analyst Will Wallis told clients that fears about U.K. government spending remains "a legitimate ongoing concern" for RM. Yet he said RM's interim results were "solid" and keeps an "add" rating on the stock. RM lifted its interim dividend to 1.39 pence a share from 1.32 pence a share a year earlier. It expects further growth overseas and separately announced a tie-up with LEGO Education for a joint venture to become the exclusive distributor of LEGO Education products to education customers across Europe. It didn't provide financial details of the deal but said a new company, LEGO Education Europe Ltd.--which will be owned 51% by the LEGO Group and 49% by RM--will hold exclusive European education distribution rights for LEGO Education products, initially for 10 years from January 2011. Company Website: www.rm.com -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; hannah.benjamin@d
Altium Securities, repeating its 'buy' rating, notes the Essex BSF programme is one of the largest in the country, the first phase of which is estimated at 150 million pounds overall and around 13 million pounds for ICT. 'The revenue potential for RM over the course of the multiple phases of the contract could be worth in excess of 100 million pounds,' says the broker in a note. '2010 is the year that RM expects profits from BSF to exceed bid costs for the first time; while today's win is unlikely to generate revenues this year, it should materially enhance the contribution from BSF in the years to come,' it says. Reuters Messaging rm://david.brett.reuters.com@reuters.net
Nice rise on more contract wins: Essex County Council has awarded RM the contract to provide ICT services for its Building Schools for the Future programme. The first four schools should be open by January 2012. This follows last week's agreement of contractual terms with the Qualifications and Curriculum Development Agency (QCDA) for a four-year framework agreement to provide outsourced on-screen marking services
The private sector is expecting a bonanza from supplying schools. “Schools are complex organisations, with big budgets and sophisticated technology,” said Terry Sweeney, chief executive of RM, which puts computers into classrooms and maintains them. “The head teachers I talk to definitely understand about buying in professional support services.” http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article6982320.ece
RM is one of the world's leading education solution businesses and is well-positioned for growth, with highly relevant experience and world-class solutions. The shares are trading on an 2010 earnings multiple of just 10.3 times, falling to 8.8pc next year. Questor believes that the company is operating in an excellent global market and the shares look undervalued. Buy says the Telegraph. There is also potential for consolidation at home, adds the Times. Redstone, the indebted rival which beat RM to two big-ticket BSF contracts in Birmingham and Lancashire, is in play ? and RM confirmed yesterday that it was keeping a "close eye" on the situation. RM is a buy suggests the Times
bit of movement here today hope we have good results on 23rd nov
The venture will provide educational ICT products and services to schools in the Middle East, North Africa and South Asia (MENASA) and will be the exclusive distributor of RM's learning technologies products in the region. RM's CEO Terry Sweeney said increasing sales in selected international territories was a central part of his strategy for the group.
RM Group has announced a new joint venture business, between RM and a local partner experienced in the MENASA education sector. RM MENASA, based in Dubai, to be the exclusive distributor of RM's learning technologies products in the MENASA region
http://www.investegate.co.uk/Article.aspx?id=200905151555363679S
Educational supplier RM Group reported a first-half adjusted profit before tax of £1.0m, up from £0.6m in 2008, with revenue increasing 21% to £141.9m. The company increased its interim dividend 5% to 1.32p per share. CEO Terry Sweeney said the first half of RM's financial year was not a good indicator of results for the year as a whole. 'However, with the UK education budget for government year 2009/10 up 6% in cash terms, and revenue growth anticipated from BSF, Computrac and general education resources, management's expectations for FY-2009 are unchanged.' Story provided by Business Financial Newswire
for a change - - - - http://www.moneyam.com/quote/index.php?epic=RM.
RM ups dividend as H1 revenue rises 21% - - - - http://www.moneyam.com/action/news/showArticle?id=3605726