RM (RM.)

Sector:

Retailers

Index:

FTSE Fledgling

59.40p
   
  • Change Today:
    -1.00p
  • 52 Week High: 92.00
  • 52 Week Low: 20.60
  • Currency: UK Pounds
  • Shares Issued: 83.88m
  • Volume: 33,417
  • Market Cap: 49.82m
  • RiskGrade: 242

RM swings to statutory loss, warns of short-term challenges

By Josh White

Date: Tuesday 23 Aug 2022

LONDON (ShareCast) - (Sharecast News) - Education resource and technology provider RM reported a 4% improvement in first-half revenue on Tuesday, to £100.3m, driven by growth in RM Resources and the return of UK school exams in RM Assessment.

The London-listed firm said adjusted operating profit tumbled 42% in the six months ended 31 May, however, to £3.6m, which it put down to the "required turnaround" in the RM Technology division, impacts associated with its IT implementation programme, and increased freight costs in RM Resources.

Statutory losses after tax totalled £5.9m, swinging from a £2m profit a year ago, due to lower operating profits and higher expensed investment programme costs of £7.7m, up from £3.4m.

The board said the implementation of its new IT platform was proving "more challenging than anticipated", leading to extended timelines and increased project cost.

Net debt totalled £41.5m, with normal seasonal working capital movements and elevated IT project spend, widening from £10.5m a year ago, while the company's bank covenants were relaxed at May and November.

The payment of the company's dividend was paused due to elevated debt levels, with the directors saying they remained "committed" to a sustainable dividend policy, and would review it again ahead of the full-year preliminary results.

Looking ahead, RM said school funding was increasing in the UK, but school budgets had "challenging headwinds" including salaries, energy costs and general inflation, which would impact discretionary spending.

The company said its underlying market drivers were continuing to strengthen, confirming long-term growth potential with leadership positions in resilient markets.

Improving underlying sales momentum was being seen in each division, and the phasing impacts of delayed shipments in RM Resources from the first to the second half supported a positive revenue outlook.

RM described the macroeconomic environment as "challenging", explaining that together with IT implementation impacts, it would dilute profit conversion in the short-term.

"RM is starting to build encouraging revenue momentum across the group, which demonstrates the strength of our offer and market positioning," said chief executive officer Neil Martin.

"At the same time, it is clear that there is more work to do to translate this into the levels of operating margin that we aspire to."

Martin said the company was addressing that through its two-year transition period, which it outlined at the start of the year.

"Our long-term outlook remains positive, with the opportunity to capitalise on leading positions in resilient markets.

"Nearer-term, the work required to improve our operating platform and manage the challenging economic backdrop creates volatility that we must manage while we structure ourselves for long-term, sustainable success."

At 0926 BST, shares in RM were down 32.53% at 66.8p.

Reporting by Josh White at Sharecast.com.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

RM Market Data

Currency UK Pounds
Share Price 59.40p
Change Today -1.00p
% Change -1.66 %
52 Week High 92.00
52 Week Low 20.60
Volume 33,417
Shares Issued 83.88m
Market Cap 49.82m
RiskGrade 242

RM Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
58.88% above the market average58.88% above the market average58.88% above the market average58.88% above the market average58.88% above the market average
9.09% above the sector average9.09% above the sector average9.09% above the sector average9.09% above the sector average9.09% above the sector average
Price Trend
6.62% below the market average6.62% below the market average6.62% below the market average6.62% below the market average6.62% below the market average
21.74% below the sector average21.74% below the sector average21.74% below the sector average21.74% below the sector average21.74% below the sector average
Income Not Available
Growth
94.88% below the market average94.88% below the market average94.88% below the market average94.88% below the market average94.88% below the market average
95.56% below the sector average95.56% below the sector average95.56% below the sector average95.56% below the sector average95.56% below the sector average

What The Brokers Say

Strong Buy 1
Buy 0
Neutral 0
Sell 0
Strong Sell 0
Total 1
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

RM Dividends

  Latest Previous
  Final Final
Ex-Div 17-Mar-22 18-Mar-21
Paid 29-Apr-22 30-Apr-21
Amount 4.70p 3.00p

Trades for 27-Sep-2023

Time Volume / Share Price
14:17 32 @ 58.00p
12:18 140 @ 58.00p
11:01 2,500 @ 58.28p
10:25 336 @ 57.00p
10:25 3,225 @ 57.00p

RM Key Personnel

CEO Mark Cook
CFO Simon Goodwin

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