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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| RM plc | AQSE:RM.GB | Aquis Stock Exchange | Ordinary Share | GB00BJT0FF39 | Ordinary Shares 2 2/7p |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.50 | 2.14% | 71.50 | 70.00 | 78.00 | 74.00 | 70.00 | 70.00 | 4,150 | 12:17:01 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMRM.
RNS Number : 0613D
RM PLC
04 July 2016
4(th) July 2016
RM plc
Interim Results for the period ending 31 May 2016
RM plc ("RM"), the leading education software, services and resources group, reports its interim results for the 6 months ended 31 May 2016.
HIGHLIGHTS
Hot Features
Premium
Financial 2016 2015 Change
----------------------------------------- ----------- ----------- ---------
Revenue(1) GBP76.6m GBP77.7m -1.4%
RM Resources GBP29.3m GBP30.6m -4.4%
RM Results GBP13.2m GBP10.6m +23.6%
RM Education GBP34.2m GBP36.5m -6.4%
Adjusted* operating profit GBP7.1m GBP6.9m +2.9%
Adjusted* operating profit 9.3% 8.9% +0.4pp
margin
Adjusted* diluted EPS 6.1p 5.8p +5.2%
Interim dividend 1.50p 1.20p +25%
----------------------------------------- ----------- ----------- ---------
(1) The highlights set out above exclude the results of exited businesses. Revenue including exited businesses was GBP76.8m (H1 2015: GBP79.8m). Including the results of exited businesses does not change the adjusted operating profit as shown above.
Operational
-------------------------------------------------------------------------
* Strong revenue growth in RM Results partially
offsetting expected reductions in RM Resources and RM
Education
* Adjusted* operating profit improved to GBP7.1m (H1
2015: GBP6.9m)
* Adjusted* operating margin continues to improve to
9.3% (H1 2015: 8.9%)
* Cash remains strong at GBP32.1m
* Interim dividend increased by 25% to 1.50p (H1 2015:
1.20p)
* Confident of meeting full year expectations
-------------------------------------------------------------------------
Commenting on the interim results, David Brooks, Chief Executive of RM, said:
"Trading in the first six months of 2016 has been as expected. We have seen strong growth in RM Results, RM Resources has protected its robust margins despite a modest decline in revenues and RM Education continues to stabilise. Despite a subdued UK education market, our balance sheet remains strong and we are confident of meeting expectations for the full year."
Contacts
RM plc FTI Consulting
08450 700300
David Brooks, Chief Executive Chris Lane / Antonia Gray
Officer
Neil Martin, Chief Financial
Officer 020 3727 1000
08450 700300
* Throughout this statement, adjusted profit and adjusted EPS are stated before adjustments to profit which are considered exceptional in nature or with potential significant variability year on year in non-cash items which might mask underlying trading performance: the amortisation of acquisition related intangible assets; impairment of held for sale assets and related transition costs; the gain on sale of operations; share-based payment charges; restructuring program release and changes in the provisions for dilapidations and onerous lease contracts.
RM plc
Interim results for the 6 months ended 31 May 2016
Results
6 months 12 months
6 months to to
to May November
May 2016 2015 2015
------------------------------ ---------- --------- ----------
Revenue GBP76.8m GBP79.8m GBP178.2m
Revenue excluding exited
business GBP76.6m GBP77.7m GBP174.5m
Adjusted* operating profit GBP7.1m GBP6.9m GBP18.2m
Adjusted* profit before
tax GBP6.5m GBP6.3m GBP17.1m
Profit before tax GBP6.0m GBP9.2m GBP19.2m
Adjusted* diluted Earnings
per share 6.1p 5.8p 15.6p
Ordinary dividend per share 1.50p 1.20p 5.00p
Cash and short term deposits GBP32.1m GBP43.1m GBP48.3m
------------------------------ ---------- --------- ----------
Revenue declined by 3.8% to GBP76.8m compared with GBP79.8m for the same period last year (or by 1.4% when excluding the exited business, SpaceKraft that was sold in December 2015), with growth in the RM Results division being more than offset by the expected decline in the RM Resources and RM Education divisions.
Adjusted* operating profit was GBP7.1m (H1 2015: GBP6.9m). Adjusted* profit before tax was GBP6.5m (H1 2015: GBP6.3m).
Cash used in operations of GBP0.4m (H1 2015: cash generated GBP1.7m) reflects a reduction in the negative working capital associated with long-term contracts and the unwinding of related cash balances. Net cash and short-term deposits at 31 May 2016 was GBP32.1m (2015: GBP43.1m at 31 May 2015, GBP48.3m at 30 November 2015) which follows a one off additional pension payment of GBP8m agreed as part of the 2015 triennial agreement.
Adjusted* diluted earnings per share increased by 5% to 6.1p (H1 2015: 5.8p).
Pension
The IAS 19 deficit relating to RM's defined benefit pension scheme has increased since 30 November 2015 by GBP1.1m to GBP23.0m (GBP21.9m at 30 November 2015), primarily due to increased liabilities arising from a reduction in market discount rates more than offsetting cash contributions of GBP10m and beneficial inflation factors. The deficit net of deferred tax was GBP18.8m (GBP17.9m at 30 November 2015).
Dividend
The interim dividend per share has been increased by 25% to 1.50p (H1 2015: 1.20p) reflecting the commitment to reduce dividend cover. The dividend will be payable on 9 September 2016 to shareholders on the register on 12 August 2016.
RM Resources
RM Resources consists of the operating business TTS. TTS provides education resources used in schools in the UK and internationally through a mainly direct marketing business. Products supplied are a mix of third party branded and TTS branded items manufactured from a network of third party suppliers.
6 months 6 months 12 months
to to to
May 2016 May 2015 November
2015
----------------------- ---------- ---------- ----------
RM Resources revenue GBP29.3m GBP30.6m GBP63.5m
RM Resources adjusted*
operating profit GBP4.3m GBP4.5m GBP11.1m
----------------------- ---------- ---------- ----------
The above excludes the exited SpaceKraft business which was sold in December 2015.
As anticipated, RM Resources reported a revenue decline of 4.4% to GBP29.3m (H1 2015: GBP30.6m). TTS UK direct marketing fell by 8% as a result of the end of the benefit driven by significant curriculum change in UK primary schools and continued tightening of UK schools budgets. Online ordering continues to be strong and now represents 34% of UK orders (28% for the same period in 2015). International revenue grew 18% driven primarily by increased sales of proprietary products in Europe and sales to International schools.
Despite declining revenue, focus on tight cost control has protected the strong margins with adjusted* operating margin remaining constant at 14.6%.
RM Results
The RM Results business provides IT software and e-Assessment services to enable onscreen exam marking (e-marking), onscreen testing (e-testing) and the management and analysis of educational data. Its customers include government ministries, exam boards and professional awarding bodies in the UK and overseas.
6 months 6 months 12 months
to to to
May 2016 May 2015 November
2015
------------------------------- ---------- ---------- ----------
RM Results revenue GBP13.2m GBP10.6m GBP30.7m
RM Results adjusted* operating
profit GBP2.4m GBP1.6m GBP5.6m
------------------------------- ---------- ---------- ----------
Revenue in this division increased by 23.6% to GBP13.2m (H1 2015: GBP10.6m). This resulted from growth of 46% in e-Assessment revenues driven by a greater proportion of revenues accounted for in H1 compared to the prior year (+34%) and increased e-testing revenues (+12%). Data revenues declined by 6% as a result of planned contract exits which will also impact revenues in the second half. Adjusted* operating profit increased from GBP1.6m for the first half of 2015 to GBP2.4m as a result of the increased revenue.
Increased revenues in e-testing were driven by an expanded 5 year managed services contract for English language exams with Cambridge Assessment.
RM Education
RM Education is a UK focused business supplying ICT software and services to schools and colleges.
6 months 6 months 12 months
to to to
May 2016 May 2015 November
2015
----------------------- ---------- ---------- ----------
RM Education revenue GBP34.2m GBP36.5m GBP80.2m
RM Education adjusted*
operating profit GBP2.3m GBP2.6m GBP5.5m
----------------------- ---------- ---------- ----------
As expected revenues in RM Education reduced by 6.4% reflecting the continued transition away from legacy offerings. This reduction reflects a significant slowdown in the revenue decline experienced in this division compared to previous years. The decline was experienced on the back of the government's Building Schools for the Future (BSF) programme stopping and the change of strategy away from making and selling PC client devices.
Good progress was made in the half year in relation to pursuing the division's priority areas in software and services. In particular we extended or renewed all long term managed service contracts that ended in the period including those previously under the BSF programme.
The division generated an adjusted* operating profit of GBP2.3m (H1 2015: GBP2.6m) with operating margins of 6.6%. The division includes services subject to long-term project accounting and, as in 2015, profits were positively affected by good operational performance and cost control in long term contract completions.
Corporate Costs
Corporate costs have remained stable at GBP1.8m (H1 2015: GBP1.8m).
Statement on Principal Risks and Uncertainties
Pursuant to the requirements of the Disclosure and Transparency Rules, the Group provides the following information on its principal risks and uncertainties. The Group considers strategic, operational and financial risks and identifies actions to mitigate those risks. These risk profiles are updated at least annually. The principal risks and uncertainties detailed within the Group's 2015 Annual Report remain applicable. This is available from the RM website: www.rmplc.com.
Outlook
Whilst market conditions in the UK Education sector continue to be subdued as a result of pressure on school budgets we are confident of delivering results for the year in line with expectations. Our balance sheet remains strong and the Board is focusing on the right balance of investing in the three divisions while ensuring that margins can be maintained or improved in 2016.
Condensed Consolidated
Income Statement
for the 6 months
ended 31 May
2016
---------------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------
6 months ended 6 months ended Year ended 30
31 May 2016 31 May 2015 November 2015
Adjusted Adjustments Total Adjusted Adjustments Total Adjusted Adjustments Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- ----- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------
Revenue 76,759 - 76,759 79,806 - 79,806 178,228 - 178,228
Cost of sales (44,774) - (44,774) (47,612) - (47,612) (109,316) - (109,316)
--------------- ----- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------
Gross profit 31,985 - 31,985 32,194 - 32,194 68,912 - 68,912
Operating
expenses (24,910) - (24,910) (25,246) - (25,246) (50,713) - (50,713)
Amortisation
of
acquisition
related
intangible
assets - (8) (8) - (152) (152) - (303) (303)
Impairment
of held for
sale assets
and related
transition
costs - - - - - - - (323) (323)
Gain on sale
of operations - 136 136 - - - - 65 65
Share-based
payment
charges - (700) (700) - (385) (385) - (864) (864)
Release of
provisions
for
dilapidations
on leased
properties
and onerous
lease
contracts - 79 79 - 2,393 2,393 - 2,368 2,368
Restructuring
program
release - - - - 213 213 - 243 243
Exceptional
credit on
Defined
Benefit
Pension
Scheme - - - - - - - 206 206
--------------- ----- ----------- ------------ ----------- ------------ ------------ ------------
(24,910) (493) (25,403) (25,246) 2,069 (23,177) (50,713) 1,392 (49,321)
--------------- ----- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------
Profit from
operations 7,075 (493) 6,582 6,948 2,069 9,017 18,199 1,392 19,591
Investment
income 114 - 114 180 894 1,074 409 894 1,303
Finance costs (657) (38) (695) (782) (88) (870) (1,510) (149) (1,659)
--------------- ----- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------
Profit before
tax 6,532 (531) 6,001 6,346 2,875 9,221 17,098 2,137 19,235
Tax 4 (1,372) (9) (1,381) (1,488) (375) (1,863) (3,984) (289) (4,273)
--------------- ----- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------
Profit for
the period 5,160 (540) 4,620 4,858 2,500 7,358 13,114 1,848 14,962
--------------- ----- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------
Earnings
per ordinary
share: 5
Basic 6.4p 5.7p 6.0p 9.1p 16.2p 18.5p
Diluted 6.1p 5.4p 5.8p 8.8p 15.6p 17.8p
Paid and
proposed
dividends
per share: 6
Interim 1.50p 1.20p 1.20p
Final - - 3.80p
Adjustments to results have been presented
to give a better guide to business performance
(see note 1).
Results from exited business are shown in note 3 to these
financial statements.
Condensed Consolidated
Statement of Comprehensive
Income
for the 6 months ended
31 May 2016
--------------------------------------- ----------- ---------------------------
6 months 6 months
ended ended Year ended
31 May 31 May 30 November
2016 2015 2015
GBP000 GBP000 GBP000
--------------------------------------- ----------- ----------- --------------
Profit for the period 4,620 7,358 14,962
Items that will not be
reclassified subsequently
to profit or loss:
Defined benefit pension
scheme re-measurements (10,279) (4,553) 2,402
Tax on items that will
not be reclassified subsequently
to profit or loss 1,932 911 (950)
Items that are or may be reclassified
subsequently to profit or loss:
Fair value gain/(loss)
on hedged instruments 56 (114) (180)
Exchange gain/(loss) on
translation of overseas
operations 60 (15) (80)
Tax on items that are
or may be reclassified
subsequently to profit
or loss 17 (27) (36)
---------------------------------------- ----------- ----------- --------------
Other comprehensive (expense)/income (8,214) (3,798) 1,156
Total comprehensive (expense)/income (3,594) 3,560 16,118
---------------------------------------- ----------- ----------- --------------
Condensed Consolidated
Balance Sheet
At 31 May 2016
31 May 31 May 30 November
2016 2015 2015
-------------------------------- -----
Note GBP000 GBP000 GBP000
-------------------------------- ----- ----------- ------------ --------------
Non-current assets
Goodwill 14,067 14,067 14,067
Acquisition related
intangible assets - 310 8
Other intangible assets 812 553 562
Property, plant and
equipment 6,950 7,695 7,059
Other receivables 9 1,166 1,172 1,168
Deferred tax assets 7,189 8,256 6,121
-------------------------------- ----- ----------- ------------ --------------
30,184 32,053 28,985
-------------------------------- ----- ----------- ------------ --------------
Current assets
Inventories 10,805 12,846 10,862
Trade and other receivables 9 25,815 24,606 25,592
Tax assets - 545 -
Cash and short-term
deposits 7 32,118 43,103 48,320
Assets held for sale - - 1,162
-------------------------------- -----
68,738 81,100 85,936
Total assets 98,922 113,153 114,921
-------------------------------- ----- ----------- ------------ --------------
Current liabilities
Trade and other payables 10 (56,719) (68,888) (64,974)
Tax liabilities (1,280) (780) (2,787)
Provisions 11 (1,132) (2,828) (2,077)
Liabilities directly
associated with assets
classified as held
for sale - - (549)
-------------------------------- ----- ------------ --------------
(59,131) (72,496) (70,387)
Net current assets 9,607 8,604 15,549
-------------------------------- ----- ----------- ------------ --------------
Non-current liabilities
Other payables 10 (690) (963) (662)
Provisions 11 (2,948) (2,507) (2,864)
Defined Benefit Pension
Scheme obligation 12 (22,958) (30,016) (21,861)
-------------------------------- ----- ------------ --------------
(26,596) (33,486) (25,387)
Total liabilities (85,727) (105,982) (95,774)
Net assets 13,195 7,171 19,147
-------------------------------- ----- ----------- ------------ --------------
Equity attributable to shareholders
Share capital 1,890 1,889 1,890
Share premium account 27,035 27,018 27,035
Own shares (2,510) (2,667) (2,510)
Capital redemption
reserve 94 94 94
Hedging reserve 420 430 364
Translation reserve (324) (319) (384)
Retained earnings
- (deficit) (13,410) (19,274) (7,342)
-------------------------------- ----- ------------ --------------
Total equity 13,195 7,171 19,147
-------------------------------- ----- ----------- ------------ --------------
Condensed Consolidated
Statement of Changes
in Equity
for the 6 Capital
months ended Share Share Own redemption Hedging Translation Retained
31 May 2016 capital premium shares reserve reserve reserve earnings Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ----- ----------- ---------- ---------- ------------- ---------- -------------- ----------- ----------
At 1 December
2015 1,890 27,035 (2,510) 94 364 (384) (7,342) 19,147
Profit for
the period - - - - - - 4,620 4,620
Other
comprehensive
income/(expense) - - - - 56 60 (8,330) (8,214)
------------------ -----
Total
comprehensive
income/(expense) - - - - 56 60 (3,710) (3,594)
Transactions
with owners
of the Company:
Sale of shares
held in staff
share scheme - - - - - - 21 21
Share-based
payment fair
value charges - - - - - - 700 700
Ordinary
dividends
paid 6 - - - - - - (3,079) (3,079)
------------------ -----
At 31 May
2016 1,890 27,035 (2,510) 94 420 (324) (13,410) 13,195
------------------ ----- ----------- ---------- ---------- ------------- ---------- -------------- ----------- ----------
for the 6 Capital
months ended Share Share Own redemption Hedging Translation Retained
31 May 2015 capital premium shares reserve reserve reserve earnings Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ----- ----------- ---------- ---------- ------------- ---------- -------------- ----------- ----------
At 1 December
2014 1,889 27,018 (2,950) 94 544 (304) (18,177) 8,114
Profit for
the period - - - - - - 7,358 7,358
Other
comprehensive
expense - - - - (114) (15) (3,669) (3,798)
------------------ ----- ----------- ---------- ---------- ------------- ---------- -------------- ----------- ----------
Total
comprehensive
income/(expense) - - - - (114) (15) 3,689 3,560
Transactions
with owners
of the Company:
Share-based
payment awards
exercised - - 2,592 - - - (2,720) (128)
Purchase
of own shares - - (2,309) - - - - (2,309)
Share-based
payment fair
value charges - - - - - - 385 385
Ordinary
dividends
paid 6 - - - - - - (2,451) (2,451)
------------------ ----- ----------- ---------- ---------- ------------- ---------- -------------- ----------- ----------
At 31 May
2015 1,889 27,018 (2,667) 94 430 (319) (19,274) 7,171
------------------ ----- ----------- ---------- ---------- ------------- ---------- -------------- ----------- ----------
for the year Share Share Own Capital Hedging Translation Retained Total
ended 30 capital premium shares redemption reserve reserve earnings
November reserve
2015
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ----- ---------- ---------- ---------- ------------- ---------- -------------- -------------------- ----------
At 1 December
2014 1,889 27,018 (2,950) 94 544 (304) (18,177) 8,114
Profit for
the year - - - - - - 14,962 14,962
Other
comprehensive
income/(expense) - - - - (180) (80) 1,416 1,156
------------------ ----- ---------- ---------- ---------- ------------- ---------- -------------- -------------------- ----------
Total
comprehensive
income/(expense) - - - - (180) (80) 16,378 16,118
Transactions
with owners
of the Company:
Shares issued 1 17 - - - - - 18
Sale of shares
held in staff
share scheme - - - - - - 55 55
Share-based
payment awards
exercised - - 2,910 - - - (3,038) (128)
Purchase
of own shares - - (2,470) - - - - (2,470)
Share-based
payment fair
value charges - - - - - - 864 864
Ordinary
dividends
paid 6 - - - - - - (3,424) (3,424)
At 30 November
2015 1,890 27,035 (2,510) 94 364 (384) (7,342) 19,147
------------------ ----- ---------- ---------- ---------- ------------- ---------- -------------- -------------------- ----------
Condensed Consolidated
Cash Flow Statement
for the 6 months ended
31 May 2016
6 months 6 months
ended ended Year ended
31 May 31 May 30 November
2016 2015 2015
Note GBP000 GBP000 GBP000
---------------------------------- ----- ------------ --------- ------------
Profit before tax 6,001 9,221 19,235
Investment income (114) (1,074) (1,303)
Finance costs 695 870 1,659
---------------------------------- ----- --------- ------------
Profit from operations 6,582 9,017 19,591
Adjustments for:
Impairment of acquisition
related intangible
assets - - 150
Amortisation of acquisition
related intangible
assets 8 152 303
Amortisation of other
intangible assets 120 154 297
Depreciation and impairment
of property, plant
and equipment 1,057 1,138 2,406
Gain on sale of operations (136) - (65)
Loss/(gain) on disposal
of property, plant
and equipment 42 (75) (95)
Loss on foreign exchange
derivatives 133 134 133
Share-based payment
charge 700 385 864
Decrease in provisions 11 (79) (2,258) (716)
Defined Benefit Pension
Scheme administration
cost 12 480 205 530
---------------------------------- ----- --------- ------------
Operating cash flows
before movements in
working capital 8,907 8,852 23,398
Decrease/(increase)
in inventories 57 (2,242) (707)
(Increase)/decrease
in receivables (353) 7,594 6,102
Movement in payables:
- decrease in trade
and other payables (8,233) (10,805) (14,369)
- utilisation of
onerous lease and
dilapidations provisions 11 (306) (959) (2,186)
- utilisation of
employee-related restructuring
provisions 11 (94) (599) (1,166)
- utilisation of
other provisions 11 (381) (105) (132)
---------------------------------- ----- --------- ------------
Cash (used in)/generated
by operations (403) 1,736 10,940
Defined Benefit Pension
Scheme cash contributions (9,992) (1,992) (3,984)
Tax paid (1,882) (632) (171)
Borrowing facilities
arrangement and commitment
fees (365) (183) (447)
Income on sale of
finance lease debt 16 - 45
---------------------------------- ----- --------- ------------
Net cash (outflow)/inflow
from operating activities (12,626) (1,071) 6,383
---------------------------------- ----- ------------ --------- ------------
Investing activities
Interest received 98 163 364
Repayment of loans
by third parties - 14 18
Proceeds from sale
of other receivables - 1,586 1,586
Proceeds from sale
of operations 759 - -
Proceeds on disposal
of property, plant
and equipment 13 122 165
Purchases of property,
plant and equipment (1,019) (370) (1,576)
Purchases of other
intangible assets (369) (170) (322)
---------------------------------- ----- --------- ------------
Net cash (used in)/generated
by investing activities (518) 1,345 235
---------------------------------- ----- ------------ --------- ------------
Financing activities
Ordinary dividends
paid 6 (3,079) (2,451) (3,424)
Repayment of capital
obligations under
vehicle finance leases - (177) (244)
Proceeds of share
capital issue, net
of share issue costs - - 18
Proceeds from sale
of shares held in
Staff Share Scheme 21 - 55
Purchase of own shares - (2,309) (2,470)
Satisfaction of share-based
payment awards - (128) (128)
---------------------------------- ----- --------- ------------
Net cash used in financing
activities (3,058) (5,065) (6,193)
---------------------------------- ----- ------------ --------- ------------
Net (decrease)/ increase
in cash and cash equivalents (16,202) (4,791) 425
Cash and cash equivalents
at the beginning of
the period/year 42,320 41,893 41,893
Effect of foreign
exchange rate changes - 1 2
---------------------------------- ----- --------- ------------
Cash and cash equivalents
at the end of period/
year 7 26,118 37,103 42,320
---------------------------------- ----- ------------ --------- ------------
Notes to the Condensed Interim Financial Statements
1. General information
RM plc ('Company') is incorporated in the United Kingdom
and listed on the London Stock Exchange. The unaudited
Condensed Consolidated Interim Financial Statements
as at 31 May 2016 and for the 6 months then ended
comprise those of the Company and its subsidiaries
(together 'the Group').
Condensed Consolidated Income Statement presentation
The Income Statement is presented in three columns.
This presentation is intended to give a better guide
to business performance by separately identifying
the following adjustments to profit which are considered
exceptional in nature or with potential significant
variability year on year in non-cash items which might
mask underlying trading performance: the amortisation
of acquisition related intangible assets; the impairment
of held for sale assets and related transition costs,
the gain on sale of operations; share-based payment
charges; restructuring program releases; and movements
in the provisions for dilapidations and onerous lease
contracts. The columns extend down the Income Statement
to allow the tax and earnings per share impacts of
these transactions to be disclosed. Equivalent material
adjustments to profit arising in future years, including
increases in or reversals of items recorded, will
be disclosed in a consistent manner.
Adjustments to profit
During the 6 months ended 31 May 2016 adjustments
to profit include a GBP0.7m share based payment fair
value charge in accordance with IFRS 2 and a GBP0.1m
profit on the disposal of investment in subsidiary
entity, SpaceKraft Limited.
Other Comprehensive Income
Also during the period, GBP10.3m of actuarial losses
relating to the defined benefit pension scheme deficit
have been recognised in Other Comprehensive Income.
These have been mainly offset by deficit reduction
payments of GBP10.0m.
2. Accounting policies
This condensed set of financial statements has been
prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the European Union.
The annual financial statements of the Group are prepared
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority (FCA), the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published Consolidated Financial Statements for the year ended 30 November 2015. The preparation of the Condensed Consolidated Interim Financial Statements, in conformity with generally accepted accounting principles, requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Interim Financial Statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the Directors' best knowledge of current events and actions, actual results ultimately may differ from those estimates. In preparing these Condensed Consolidated Interim Financial Statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements as at and for the year ended 30 November 2015. Going concern The Directors, having made appropriate enquiries, consider that the Group has adequate resources to continue in operational existence for the foreseeable future and that therefore it is appropriate to adopt the going concern basis in preparing the Interim Financial Statements.
3. Segmental results
The Group's business is supplying products, services
and solutions to the UK and international education
markets.
The Group is structured into three operating divisions:
RM Resources, RM Results and RM Education.
This Segmental analysis shows the results and assets
of these divisions. Revenue is that earned by the Group
from third parties.
6 months ended RM RM RM Corporate Exited
31 May 2016 Resources Results Education Services Businesses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------ ---------- ------------ ------------ ------------- --------------------
Revenue 29,265 13,155 34,188 - 151 76,759
------------ ---------- ------------ ------------ ------------- --------------------
Adjusted
profit/(loss)
from
operations 4,272 2,364 2,264 (1,806) (19) 7,075
Adjusted
investment
income 114
Adjusted
finance
costs (657)
--------------------
Adjusted profit
before tax 6,532
Adjustments
(see
note 1) (531)
--------------------
Profit before
tax 6,001
---------------- ------------ ---------- ------------ ------------ ------------- --------------------
6 months ended RM RM RM Corporate Exited
31 May 2015 Resources Results Education Services Businesses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------ ---------- ------------ ------------ ------------- --------------------
Revenue 30,574 10,640 36,516 - 2,076 79,806
------------ ---------- ------------ ------------ ------------- --------------------
Adjusted
profit/(loss)
from
operations 4,468 1,610 2,571 (1,756) 55 6,948
Adjusted
investment
income 180
Adjusted
finance
costs (782)
--------------------
Adjusted profit
before tax 6,346
Adjustments
(see
note 1) 2,875
--------------------
Profit before
tax 9,221
---------------- ------------ ---------- ------------ ------------ ------------- --------------------
Year ended 30 RM RM RM Corporate Exited
November 2015 Resources Results Education Services Businesses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------ ---------- ------------ ------------ ------------- ----------
Revenue 63,543 30,725 80,243 - 3,717 178,228
Adjusted
profit/(loss)
from
operations 11,107 5,554 5,494 (4,140) 184 18,199
Investment
income 409
Adjusted
finance
costs (1,510)
Adjusted profit
before tax 17,098
Adjustments
(see
note 1) 2,137
Profit before
tax 19,235
---------------- ------------ ---------- ------------ ------------ ------------- ----------
Segmental assets
----------------------------------------- ----------------------- ---------- -------------------------- ------------ -------------- ----------
RM RM RM Education Corporate Exited Total
Resources Results Services Businesses
At 31 May 2016 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental 34,444 5,662 15,949 3,362 - 59,417
Other 39,505
-----------------------------------------------------------------------------------------------------------
Total assets 98,922
----------------------------------------- ----------------------- ---------- -------------------------- ------------ -------------- ----------
RM RM RM Education Corporate Exited Total
Resources Results Services Businesses
At 31 May 2015 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental 34,553 6,067 17,422 409 1,416 59,867
Other 53,286
-------------------------------------------------------------------------------------------
Total assets 113,153
--------------------------- ------------ ----------------------- ---------- -------------------------- ------------ -------------- ----------
RM RM RM Education Corporate Exited Total
Resources Results Services Businesses
At 30 November 2015 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental 32,962 7,732 16,539 700 1,162 59,095
Other 55,826
-------------------------------------------------------------------------------------------
Total assets 114,921
--------------------------- ------------ ----------------------- ---------- -------------------------- ------------ -------------- ----------
Other non-segmented assets includes tax assets,
cash and short-term deposits and other non
division-specific assets.
4.
Tax
Corporation tax for the interim period is charged at the
expected effective tax rate for the financial year ending
30 November 2016, based upon adjusted profit as explained
within note 1. The charge incorporates both current and deferred
taxation:
6 months ended 6 months ended 31 Year ended 30 November
31 May 2016 May 2015 2015
Adjusted Adjustments Total Adjusted Adjustments Total Adjusted Adjustments Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ------------ ---------- ----------- -------------------------- ---------- ------------ -------------- ----------
Profit
before
tax 6,532 (531) 6,001 6,346 2,875 9,221 17,098 2,137 19,235
Tax
charge (1,372) (9) (1,381) (1,488) (375) (1,863) (3,984) (289) (4,273)
------------- ------------- ------------ ---------- ----------- -------------------------- ---------- ------------ -------------- ----------
Effective
tax
rate 21.0% -1.7% 23.0% 23.4% 13.0% 20.2% 23.3% 13.5% 22.2%
------------- ------------- ------------ ---------- ----------- -------------------------- ---------- ------------ -------------- ----------
5. Earnings
per ordinary
share
6 months ended 6 months ended Year ended 30
31 May 2016 31 May 2015 November 2015
Weighted Weighted Weighted
average average average
Profit number Pence Profit number Pence Profit number Pence
after of per after of per after of per
tax shares share tax shares share tax shares share
GBP000 000 GBP000 000 GBP000 000
Basic earnings
per ordinary
share:
Basic earnings 4,620 80,954 5.7 7,358 80,913 9.1 14,962 80,954 18.5
Adjustments
(see note 1) 540 - 0.7 (2,500) - (3.1) (1,848) - (2.3)
--------------------- ---------
Adjusted basic
earnings 5,160 80,954 6.4 4,858 80,913 6.0 13,114 80,954 16.2
--------------------- ------- --------- --------- -------- --------- --------- -------- --------- ---------
Diluted earnings
per ordinary
share:
Basic earnings 4,620 80,954 5.7 7,358 80,913 9.1 14,962 80,954 18.5
Effect of dilutive
potential ordinary
shares: share-based
payment awards - 4,245 (0.3) - 3,010 (0.3) - 3,080 (0.7)
---------------------
Diluted earnings
per ordinary
share 4,620 85,199 5.4 7,358 83,923 8.8 14,962 84,034 17.8
Adjustments
(see note 1) 540 - (2,500) - (1,848) -
---------------------
Adjusted diluted
earnings 5,160 85,199 6.1 4,858 83,923 5.8 13,114 84,034 15.6
--------------------- ------- --------- --------- -------- --------- --------- -------- --------- ---------
6. Dividends
Amounts recognised as distributions
to equity holders were:
-------------------------------------------------------------------- --------- ---------
6 months 6 months Year ended
ended ended
31 May 31 May 30 November
2016 2015 2015
GBP000 GBP000 GBP000
-------------------------------------------------------------------- --------- --------- ------------
Final dividend for the year ended
30 November 2015 - 3.80p per share
(2014: 3.04p) 3,079 2,451 2,451
Interim dividend for the year ended
30 November 2015 - 1.20p per share - - 973
3,079 2,451 3,424
-------------------------------------------------------------------- --------- --------- ------------
The proposed interim dividend of 1.50p per share was approved
by the Board on 4 July 2016. The anticipated cost of GBP1,214,000
has not been included as a liability at 31 May 2016.
7. Cash and short-term deposits
31 May 31 May 30 November
2016 2015 2015
GBP000 GBP000 GBP000
----------------------------------- ----- --------- --------- ------------
Cash and cash equivalents 26,118 37,103 42,320
Short-term deposits 6,000 6,000 6,000
----------------------------------- ----- --------- --------- ------------
Cash and short-term deposits 32,118 43,103 48,320
----------------------------------- ----- --------- --------- ------------
8. Long-term contracts
31 May 31 May 30 November
2016 2015 2015
Note GBP000 GBP000 GBP000
----------------------------------- ----- --------- --------- ------------
Amounts due from contract
customers included in trade
and other receivables 9 1 83 138
Amounts due to contract customers
included in trade and other
payables 10 (21,664) (29,245) (25,509)
----------------------------------- -----
(21,663) (29,162) (25,371)
----------------------------------- ----- --------- --------- ------------
9. Trade and other receivables
31 May 31 May 30 November
2016 2015 2015
GBP000 GBP000 GBP000
----------------------------------- --------- --------- ------------
Current
Financial assets
Trade receivables 18,319 17,264 17,303
Long-term contract balances 1 83 138
Other receivables 1,796 826 1,048
Derivative financial instruments - 340 138
Accrued income 762 2,155 1,489
----------------------------------- --------- ------------
20,878 20,668 20,116
Non-financial assets
Prepayments 4,937 3,938 5,476
----------------------------------- ----- --------- ------------
25,815 24,606 25,592
----------------------------------- ----- --------- --------- ------------
Non-current
Financial assets
Other receivables 1,166 1,172 1,168
----------------------------------- ----- --------- --------- ------------
10. Trade and
other payables
31 May 31 May 30 November
2016 2015 2015
GBP000 GBP000 GBP000
Current
Financial
liabilities
Trade payables 11,707 9,748 11,518
Other payables 315 1,053 761
Derivative
financial
instruments - 26 5
Accruals 8,813 12,507 12,525
Obligations
under
finance
leases - 106 40
20,835 23,440 24,849
Non-financial
liabilities
Other taxation
and social
security 4,006 4,059 4,010
Long-term
contract
balances 21,664 29,245 25,509
Deferred
income 10,214 12,144 10,606
--------------- ------------------------- ----------------------------- -------------------- ----------------------------
35,884 45,448 40,125
--------------- ------------------------- ----------------------------- -------------------- ----------------------------
56,719 68,888 64,974
--------------- ------------------------- ----------------------------- -------------------- ----------------------------
Non-current
Non-financial
liabilities
Deferred
income:
- due after
one
year but
within
two years 422 667 472
- due after
two
years but
within
five years 268 296 190
--------------- -------------------- ----------------------------
690 963 662
--------------- ------------------------- ----------------------------- -------------------- ----------------------------
11. Provisions
Onerous
lease Employee-related
and dilapidations restructuring Other Total
GBP000 GBP000 GBP000 GBP000
--------------- ------------------------- ----------------------------- -------------------- ----------------------------
At 1 December
2015 3,579 184 1,178 4,941
Utilisation of
provisions (306) (94) (381) (781)
Release of
provisions (150) - (58) (208)
Increase in
provisions - - 90 90
Unwind of
discount 38 - - 38
---------------
At 31 May 2016 3,161 90 829 4,080
--------------- ------------------------- ----------------------------- -------------------- ----------------------------
12. Defined Benefit Pension scheme
In the half-years ended 31 May 2016 and 31 May 2015 the financial position of the Group's Defined Benefit Pension Scheme has been rolled forward from the respective prior period end. The roll forward includes updating for actual investment returns for the periods; market derived discount rates on liabilities; and market derived inflation assumptions. Mortality assumptions have been held in line with those applied at 30 November 2015 of the preceding financial year.
The last triennial valuation at 31 May 2015 was used as the basis for the 30 November 2015 IAS 19 valuation and the roll-forward to 31 May 2016.
As at 31 May 2015, the triennial valuation for statutory funding purposes showed a deficit of GBP41.8 million (31 May 2012: GBP53.5 million). The Group agreed with the Scheme Trustees to repay this amount via deficit catch up payments of GBP4.0 million in December 2015 and GBP3.6 million per annum until 30 September 2024. In addition the Group pays the administration costs of the scheme including the Payment Protection Fund levy. In the half-year to 31 May 2016 total payments of GBP6.0 million were made under this arrangement.
In addition to the GBP4.0 million of catch up payments in December 2015, a further GBP4.0 million contribution was paid in December 2015 into an escrow account established in March 2014, the use of which within the Scheme is required to be agreed by RM Education Limited and the Scheme Trustee. As at 31 May 2016 GBP7.0 million remained unutilised in an escrow account and has been included within the calculation of the Scheme assets under IAS 19.
The Scheme is closed to future accrual of benefits.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.
The Group encourages its Directors and employees to be Governors, Trustees or equivalent of educational establishments. The Group trades with these establishments in the normal course of its business.
Responsibility statement of the directors in respect of the interim financial statements
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial period and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the period; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial period and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board,
Neil Martin Chief Financial Officer
4 July 2016
INDEPENT REVIEW REPORT TO RM PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 May 2016 which comprises the Condensed Consolidated Income Statement, Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance Sheet, Condensed Consolidated Cash Flow Statement, Condensed Consolidated Statement of Changes in Equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 May 2016 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
John Bennett
For and on behalf of KPMG LLP
Chartered Accountants
Arlington Business Park, Theale
Reading RG7 4SD
4 July 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UASNRNUABRAR
(END) Dow Jones Newswires
July 04, 2016 02:00 ET (06:00 GMT)
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