Admittedly, sales at education IT supplier, RM, have plunged, but the chunky loss isn't as grim as it seems. That largely reflects £33.7m of one-off items, covering such matters as restructuring costs and goodwill impairment - adjust for that and operating profit would have been £10m.
Still, work related to Building Schools for the Future (BSF) is facing pressure. Indeed, sales from the core learning technologies unit - which covers BSF work - fell 21 per cent from November 2010 to November 2011. And, while BSF revenues are set to peak this year, executive chairman Martyn Ratcliffe warns of a significant decline in BSF income in 2013 and 2014. Such consideration have contributed to a major restructuring effort involving the closure or sale of almost all international operations and the establishment of four separate divisions - learning technologies, education resources, assessment and data, and RM India. In fact, RM India remains the only international unit and it will deliver all software development and support functions for the group. Declining BSF income should also be mitigated by a smaller cost base.
Numis Securities expects pre-tax profit of £12.9m for 2012, giving EPS of 9.3p (£14.2 and 10.6p in 2011).
RM (RM.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 74p | MARKET VALUE: | £69.2m | |
| TOUCH: | 74-77p | 12-MONTH HIGH: | 175p | LOW: 40p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 31p* | NET CASH : | £11.3m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 271 | 18.4 | 14.6 | 5.49 |
| 2008 | 289 | 15.4 | 12.3 | 5.81 |
| 2009 | 347 | 16.3 | 14.0 | 6.17 |
| 2010 | 380 | 23.9 | 19.7 | 6.64 |
| 30 Nov | (£m) | (£m) | (p) | (p) |
| 2011† | 351 | -23.4 | -25.3 | 3.00 |
| % change** | -21 | - | - | -61 |
Ex-div:14 Mar Payment:13 Apr *Includes intangible assets of £22.2m, or 24p a share †14 months **Annualised | ||||
