Rm Regulatory News (RM.)

4 Aug 2009 07:00



4 August 2009

RM - Interim Management Statement

RM is today issuing its Interim Management Statement for the second half of its financial year, covering the period from 1 April 2009 to 3 August 2009. 

Trading update - expectations for the full year remain unchanged

RM's business is seasonal, reflecting buying patterns in the schools marketplace. The large majority of the Group's full-year profit arises in the fourth quarter, which means that trading in the first three quarters is not a reliable indicator of outcome for the year as a whole. 

Trading in the first three quarters was supportive of expectations for the year as a whole. Activity since then has continued in line with management's plan and consequently our expectations for the year as a whole remain unchanged.

In line with our normal programme of communications with shareholders, we anticipate issuing a pre-close update to the market prior to 30 September (the end of our financial year). 

Operational update

Operational delivery in each of the Group's three divisions is progressing in line with expectations. As well as the usual peak in activity related to the supply and commissioning of learning technologies products to individual schools, this summer will additionally see 16 new BSF schools completed, 6,000 interactive classrooms installed in the US, our largest ever e-marking season, and fulfilment of the Tesco for Schools and Clubs scheme. 

Significant developments in the period

On 15 May 2009, RM acquired ISIS Concepts, a design-led supplier of physical learning spaces, for a net cash cost of up to £2.69m. ISIS is complementary to RM Learning Technologies, enhancing the Group's ability to provide excellent, technology-rich learning environments to new-build schools and colleges.

On 1 June 2009, RM was awarded a £9m, five-year contract to provided outsourced e-Marking services to ACCA (the Association of Chartered and Certified Accountants).

On 15 June 2009, the Group was appointed selected bidder for the Salford and Wigan BSF programme. The initial contract, which is for managed ICT services in Salford, is worth £26m. Wigan's BSF programme, which has now been approved by the DCSF, is expected to result in significant additional business.

Financial position

RM's financial position remains strong and the Group's cash balances are tracking management's plan for the year. 

The Group has in place a five-year, £25m committed bank facility with HSBC, which has four years left to run, and additional working capital facilities totalling £33m. Total net bank borrowings at 30 June 2009 were £8.1m, including £8.1m drawn under the five-year bank facility relating to the acquisitions of Easytrace, Computrac and ISIS Concepts.

As previously described, the installation and commissioning of BSF schools over summer results in a seasonal peak working capital requirement. RM's ability to manage this peak through a strong balance sheet and the availability of bank facilities remains a competitive advantage.

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Notes:

The RM Group is a leading provider of educational solutions to schools, colleges and universities, local government and central government education departments and agencies. RM works closely with educationalists to create new products, processes and technology which improve teaching and learning. RM is listed on the main market of the London Stock Exchange under the symbol RM.L, ISIN GB0002870417.