Challenging year for RM resources

Resources’ Consortium brand endured “a bit of a service blip”, in chief executive David Brooks’ words. But, this problem has now been resolved. And resources’ other segment – TTS – outperformed UK competitors. Mr Brooks notes that the latter entity was helped by Ofsted’s new framework in schools, which emphasises a wider curriculum – something well-suited to TTS’s broad range of primary school products.

RM’s education (ICT software) business enjoyed its first period of growth since 2010. Meanwhile, results – which provides e-assessment services – enjoyed good organic revenue growth. The acquisition of Australian company SoNET last June brought in just under £2m in sales, and is helping RM to access new market opportunities.

The SoNET deal set RM back by £7.3m – leading net debt to rise from £5.8m to £15m. Its pension deficit also almost tripled from £2.3m to £6m – a consequence of a reduction in the bond discount rates on which it is valued.

RM beat Peel Hunt’s earnings expectations. Analysts here think its “growth engine” will be its investment in the results business, as worldwide education players look to enhance their digital capabilities. The broker forecasts adjusted EPS of 26.6p for FY2020, up from 26.4p in FY2019.