New accounting rules and growth in the results business offset a decline in RM's (RM) resources and education operations during the first half, driving a slight uptick in the top line.
The recent acquisition of SoNet Systems, an Australia-based provider of e-testing software, should open up new opportunities within the results division, which enjoyed a 37 per cent rise in sales to £16.8m. This stemmed from existing clients and new contract wins, along with the advantageous introduction of new revenue recognition accounting standards. However, for the full year, RM expects the timing benefits of those accounting rules to reverse and have a negative revenue impact on group revenues and profits.
Resources endured a 3.6 per cent dip in revenues to £49.2m, partly reflecting a planned exit from the non-education areas of Consortium, which RM acquired in 2017. Strong growth in international sales offset a small decline in the UK, amidst tightening school budgets.
Numis expects adjusted EPS of 25.9p for the year to November 2019, against 25.8p for FY2018.
| RM (RM) | ||||
| ORD PRICE: | 255p | MARKET VALUE: | £214m | |
| TOUCH: | 250-255p | 12-MONTH HIGH: | 268p | LOW: 173p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 50p* | NET DEBT: | 51% | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 94.9 | 6.9 | 6.8 | 1.9 |
| 2019 | 95.5 | 8.4 | 8.3 | 2.0 |
| % change | +1 | +21 | +22 | +5 |
| Ex-div: | 8 Aug | |||
| Payment: | 13 Sep | |||
| *Includes intangible assets of £63.8m, or 76p a share | ||||
