RM has just completed a major restructuring and comparatives have been further complicated by a change of year-end. However, compared with pro-forma figures for the previous year, RM's underlying performance was solid enough – the group benefited from selling loss-making non-core operations which helped lift adjusted operating profit from £1.7m to £3.9m. However, those profits were virtually wiped out by exceptional items, including a £2.9m loss from disposals. And, while the company is now leaner and fitter, RM still faces significant headwinds as cuts in education spending work though – the dividend has been halved, too, leaving the shares up with events.
Of its four trading divisions, educational resources – which comprises a distribution business for school products, including services for special needs schools – delivered the strongest performance. While turnover here was flat at £28.6m, operating profit rose sharply from £1.8m to £4m, thanks to a combination of reduced costs and other operational benefits. Restructuring helped the education technology division back into profitability, too, although revenue here fell 3.6 per cent to £47.6m as budgetary constraints hit spending levels.
Numis Securities expects full-year pre-tax profit of £12.6m, giving EPS of 10.7p (2011: £14.2m/11.7p).
| RM (RM.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 75p | MARKET VALUE: | £70m | |
| TOUCH: | 74-76p | 12-MONTH HIGH: | 155p | LOW: 40p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | na | |
| NET ASSET VALUE: | 22p* | NET CASH: | £25.3m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share |
|---|---|---|---|---|
| 2011** | 129 | -1.45 | -1.10 | 1.47 |
| 2012 | 125 | 0.60 | -0.20 | 0.75 |
| % change | -3 | - | - | -49 |
Ex-div: 15 Aug Payment: 14 Sep Includes intangible assets of £21.7m, or 23p a share **Pro-forma figures reflecting change to year-end | ||||
