Rm Regulatory News (RM.)

6 Feb 2008 07:00

RM PLC06 February 2008 6 February 2008 RM - Interim Management Statement RM is today issuing its first Interim Management Statement, which covers theperiod from 1 October 2007 to 5 February 2008. Performance at this point in the year is not a good indicator of outturn -either for the first half, or for the year as a whole. RM is a seasonalbusiness, with the majority of revenue and an even greater proportion of profitoccurring in the second half of the financial year. The first three months ofthe Group's year is the smallest quarter, both for revenue and order intake. Operational update Since the start of the financial year, RM has been selected as ICT provider fortwo out of the three BSF programmes that were awarded. The previously indicated increase in BSF bid costs will fall largely in thefirst half of FY2008, whilst BSF revenues, reflecting the timing of new schoolopenings, will be predominantly in the second half. This will increaseseasonality and, in line with management's expectations, profit in the firsthalf of FY2008 will be less than in the equivalent period of FY2007. BETT, which is the world's largest educational ICT exhibition, took place inLondon on 9 - 12 January and provided a good opportunity for judging the stateof the market. The high level of attendance at this event, combined with theannouncement of additional central government funding, confirms that educationalICT remains a high priority for both policy makers and educationalpractitioners. A significant trend at BETT this year was the growing emphasis on learningplatforms. These products will increasingly be used by schools to facilitate thegovernment's aim of providing parents with real time school reports. RM'sKaleidos product is well positioned to meet this need and is attractingsignificant market interest, with encouraging order intake levels. Kaleidos hasa software as a service (SAAS) delivery model, so revenues from FY2008 orderswill be spread over future years. Recent acquisitions, DACTA, SERAP and SpaceKraft, are all performing in linewith management's expectations. Customer satisfaction (RM's most important non-financial measure) for the yearso far is 7.65, ahead of where it was at this time year last year. Tim Pearson, CEO of RM, said: 'BSF, where we are the clear market leader, continues to be our major area ofinvestment. We've had further success in the first four months of the year,winning two out of three bids awarded and achieving the highest score for ICT inall three. However, the consortium nature of some BSF programmes does mean thatthe best ICT isn't always selected and some schools can end up with second-bestsolutions. 'Learning platform sales, which we see as the foundation of long-term strategicrelationships with many customers, are also progressing well. We have recentlysigned a multi-year agreement with Staffordshire, one of a number of contractswe now have in place. We have also been selected by the South West Grid forLearning, an existing broadband Internet customer, as preferred bidder toprovide a range of innovative learning platform services.' Material events and transactions during the period On 1 October 2007, RM acquired SpaceKraft, a supplier of special educationalneeds and early years products, for a net cost of £4.4m. SpaceKraft bringsfurther scale to the Group's Educational Resources business and significantlyincreases the Group's existing SEN business. On 5 October 2007, RM announced that it had been appointed, as part of the mpbeducation consortium, preferred bidder to provide ICT services to the LondonBorough of Hackney's BSF programme. Hackney's BSF programme covers six secondaryschools and three special schools in total, and will be delivered in threephases. The initial phase covers three schools and 3,350 pupils. On 17 January 2008, RM announced that it had been appointed selected bidder toprovide ICT services to Sunderland City Council. Sunderland's BSF programmecovers five secondary schools and three academies, serving a total of 8,000pupils. On 6 February 2008, RM announced that it had been appointed preferred bidder fora £2.75m contract to deliver innovative network and learning platform servicesto the South West Grid for Learning (SWGfL). On 20 December 2007, RM appointed Jo Connell as an Independent Non-ExecutiveDirector. For further information, please contact:Mike Greig/Phil Hemmings, RM plc 08450 700300Mark Antelme, Brunswick 020 7404 5959 Notes: Founded in 1973, the RM Group is a leading provider of educational products andservices to schools, colleges and universities, local government and centralgovernment education departments and agencies. RM works closely witheducationalists to create new products, processes and technology which improveteaching and learning. RM is listed on the main market of the London StockExchange under the symbol RM.L RM's business reflects buying patterns in the schools market place, with manyschools purchasing equipment ready for installation during the summer vacation.In 2007, first half profit before tax (before exceptional pension credit andamortisation of acquisition related intangibles) was 14% of that for the year asa whole; first half revenue was 42% of that for the year as a whole. In line with its normal programme of communications with shareholders, RM willrelease a pre-close update prior to the end of the first half of its financialyear on 31 March 2008. This information is provided by RNS The company news service from the London Stock Exchange