| RM plc (RM.) 15 July 2025 RM plc Interim Results for the six months ended 31 May 2025 Progress on improving profitability, on course to meet FY25 expectations
RM plc (‘RM’, the ‘Company’), a leading global educational technology (‘EdTech’), digital learning and assessment solution provider, reports its interim results for the six months ended 31 May 2025.
Financial highlights
Highlights
Assessment platform showing strong growth
Current trading and outlook
Mark Cook, Chief Executive of RM, said: “I’m really pleased with the continued progress we’re making in positioning RM for sustainable, long-term growth. Our profitability has improved further, driven by stronger margins and the benefits of our cost-saving initiatives. The recent extension of our banking facility also underlines the confidence our lenders have in the actions we are taking and our strategic direction. “In our Assessment division, RM Ava provides us with a compelling platform in an expanding global market, and we’re particularly encouraged by the increase in our contracted order book and customer appetite so far. While ongoing investment in the platform has contributed to the expected increase in net debt, we are confident that this is central to the development of our strategy and will drive significant future growth. “While UK schools market conditions remain challenging, we see opportunities in both TTS and Technology. We are focused on expanding TTS into international markets and unlocking new contract opportunities for our Technology business, both with multi-academy trusts but also across the broader public sector. “Our plans to legally and operationally separate our three divisions will enhance our strategic optionality, allowing each business to be more agile and execute more effectively. “We are building real momentum, and I want to thank all of my colleagues for their continued hard work and commitment in delivering another solid set of results.” Notes
A presentation by Management for investors and analysts is available on the company website at https://www.rmplc.com/.
Contacts: RM plc investorrelations@rm.com Mark Cook, Chief Executive Officer Simon Goodwin, Chief Financial Officer Daniel Fattal, Company Secretary and Investor Relations
Headland Consultancy (Financial PR) +44 203 805 4822 Stephen Malthouse (smalthouse@headlandconsultancy.com) Chloe Francklin (cfrancklin@headlandconsultancy.com) Dan Mahoney (dmahoney@headlandconsultancy.com)
Notes to Editors: About RM RM was founded in 1973, with a mission to improve the educational outcomes of learners worldwide. More than fifty years on, we are a trusted global EdTech, digital learning and assessment solution provider, transforming learners, educators, and accreditors to be more productive, resilient, and sustainable. Our simple approach enables us to deliver best in class solutions to optimise accreditation outcomes. RM is focused on delivering a consistently high-quality digital experience, acting as a trusted consultative partner to provide solutions that deliver real impact for learners worldwide. Our three businesses comprise:
Chief Executive’s statement Progress on improving profitability Overview I am very pleased with the strong operational progress made in the first half of FY25 as we continue to execute our strategy. Adjusted operating profit of £0.9m was £1.2m higher than HY24 (restated) through continued margin improvement and the impact of cost savings taking effect. During a period of economic instability which has impacted Technology and TTS revenues, I was delighted to see our core platform revenue in Assessment grow 19% in HY25. We signed a digital assessment contract with new customer, Trinity College, , shortly after H1 which represents another fantastic win for the business. This sets us up well for the remainder of the year to achieve our strategic goal of growing Assessment through a combination of strategic renewals and new business wins, at higher margins by virtue of the increasing trend towards digital-based exams. To support and capitalise on this trend, we officially launched RM’s adaptive virtual accreditation platform, now branded RM Ava and progress continues to be made in its development, headed by Dr Grainne Watson. Our banks remain highly supportive of our strategy and agreed an extension of our facility to July 2027 on similar terms. Despite an improvement in our leverage position through higher EBITDA, net debt remains higher than I would like and increased during H1 following continued planned investment in the Ava platform. We remain committed to significantly reduce debt but on terms that are in the best interests of RM and its stakeholders. Divisional separation activities, explained below, will increase our strategic options and in the meantime, all parts of the group remain cash generative. After several years of being in deficit, I was pleased to see that our legacy defined benefits pension schemes now show a combined technical provisions surplus of £10.5m based on the latest valuation at 31 May 2024. This reflects the trajectory from the macroeconomic environment in recent years but also the contributions made by RM. As a result, no further contributions are expected beyond the remaining £1.8m from the 2023 agreement with the Trustee. I would like to thank our people for their continued hard work and commitment. FY24 was a year of transformation during which we made fundamental changes to create a sustainable future for RM and FY25 is developing into a year that delivers real progress to our defined growth strategy. Divisional Performance Assessment The strong momentum in our strategic Assessment division has continued into this year with revenue up 4.1% in HY25 versus HY24. Significantly, when one-off non-core projects are stripped out, platform revenue grew 19% on the back of further customer renewals and wins including SEAB in Singapore and SACE in Australia. Last year we reported that we successfully renewed 99% of core Assessment contracts up for renewal in FY24, demonstrating our stickiness with customers. In HY25 we have secured 96% of the annualised revenue that was up for renewal which is further testament to our world class assessment offering, decades of building customer relationships, and our team working tirelessly to deliver these fantastic outcomes. Our newly launched RM Ava platform is set to strengthen our position further and be a key driver of profitable growth in the future, unlocking digital assessments and delivering higher margins. Our contracted order book, plus contracts awarded in H1 and signed in H2, has grown from £95.7m at the end of FY24 to £106.6m. This includes winning the Trinity College tender which we are delighted to have secured under contract shortly after H1. The three-year contract will see Trinity College move its c.600,000 mostly digital tests, provided in more than 60 countries, onto our platform and serves as another example of our ability to land strategic opportunities in our core Assessment business. The pipeline into H2 is strong and we expect to land further wins to build on our H1 success, highlighting Assessment’s position as the growth engine of RM. With recent Assessment wins being predominantly digital in nature rather than paper-based, the division’s adjusted operating margin has increased from 11.6% to 17.6%. We expect this trend to continue as our customers pivot further towards fully digital exams, enabled by RM Ava deployment. At the time of writing, we are in the middle of our summer peak exam season, the busiest period for Assessment. Approximately 15 million exams will be marked during this time on our platform and up to 500,000 per day, putting us on track to reach 21 million marked exams for the full year. Technology Technology revenue is down by 12.4% due to the continuation of the tough UK schools market highlighted last year leading to a slow start for HY25. Government funded projects, such as Connect the Classroom, generated revenue in HY24 but its relaunch was delayed and only announced in March. We expect the initiative to generate revenue from Q3 and into FY26. Technology’s slow start to the year was exacerbated by the start of managed services contracts won last year being delayed. More positively, the division won the First Federation Managed Service, Connectivity and Filtering contract and ended the period strongly by winning four consecutive managed services tenders, including Hayles Valley Trust schools. We therefore believe that the current decline will be temporary. TTS TTS revenue is down by 8.6% primarily due to the tough UK schools’ market with a continuation of budget constraints and exacerbated by US sales which were impacted by the implementation of trade tariffs in April. US sales in TTS account for less than 2% of group revenues so this impact is minimal and we are excited about the significant international opportunities in Europe and the Middle East, underpinned by our decision to open an office in Dubai which is now up and running. Even allowing for the drop in US sales, we continue to see further overseas opportunities for H2 which we expect to partly offset the decline in UK sales. Operationally, the division continues to strengthen following the consolidation from two warehouses into one in FY24 with 84% of orders delivered on time and in full, compared to 49% in HY24, and average Trustpilot scores consistently above 4. TTS launched 104 products in H1, helping us to stand out and evolve our product range. Launch of RM Ava A proud milestone in our innovation journey At the start of June, we announced the official launch of RM Ava, our adaptive virtual accreditation platform (formerly known as the Global Accreditation Platform), in a major step forward for RM’s digital assessment-focused growth strategy. RM Ava brings together our world-class tools onto a single, end-to-end solution, with a clear, new identity. The platform is our engine for profitable growth and will cover everything from assessment creation to AI-enhanced marking, with the opportunity to develop new features in the future. Early adoption has been positive, and the platform has also been a key differentiator in unlocking new contract wins. While platform revenue from customers is already helping to fund RM Ava, its development will result in a cash outflow of £6.5m in FY25 (£4.2m in FY24). This cashflow trend will reverse in the coming years as digitisation of assessments ramps up and will continue that way for the foreseeable future. I mentioned the successful AI marking proof-of-concept (“PoC”) project in last year’s annual report and we continue to work with customers to explore how AI can be tailored to support their assessment process. We are currently productionising this system to go live in 2026 and are doing further exciting PoCs introducing the ability to mark computational assessments. RM Ava will allow us to capitalise on the significant growth opportunities and the global shift towards digital assessment, enabling revenue growth, improved profitability and cash generation. This, in turn, will support our continued focus on reducing net debt in the near to medium term. Separation activities Unlocking the opportunity We have formed a plan to operationally separate our three divisions which have been historically linked through shared services, IT systems and the current legal structure. Separation will create simpler structures, provide greater strategic flexibility, and help to unlock further cost saving opportunities for the group. We are commencing the detailed evaluation on how to maximise cost savings in H2 and I will provide a further update on progress in due course.
Financial Review Group financial performance
Divisional performance
All comparatives quoted are as reported, not restated. Group revenue from continuing operations decreased by 7.6% to £73.2m (HY24: £79.2m). The FY24 reported revenue includes £1.0m of revenue from the final weeks trading of the Consortium business, which was closed in December 2023. Adjusted operating profit from continuing operations improved by £1.5m to £0.9m (HY24: loss of £0.6m) partially driven by the closure of Consortium which incurred a loss of £0.3m within the FY24 reported numbers. The improved profitability is also as a result of the incremental impact of £20m+ of cost savings that have been achieved in recent years. RM TTS revenues decreased by 8.6% to £30.7m (HY24: £33.6m). UK revenue declined as UK schools’ budgets continue to be squeezed; pleasingly TTS UK held market share. International revenue also declined in the period with the uncertainty around US tariffs on TTS’ predominantly Chinese manufactured products having an impact. Material margins declined by 2.8% due to increased levels of promotional activity; however significantly increased operational efficiencies, plus the incremental impact of previous cost savings, resulted in divisional contribution declining by only £0.2m, and TTS’ Divisional adjusted operating profit remaining flat at £0.1m (HY24: £0.1m). Adjusted operating margin decreased by 0.1% to 0.3% (HY24: 0.4%). RM Assessment revenues increased by 4.1% to £20.5m (HY24: £19.7m). The division saw continued strong revenue growth in core platform revenues (+18.6%), as well as in 3rd party scanning revenues (+24.0%); resulting in a total increase of 19.5% in recurring revenue to £17.1m in HY25 (HY24: £14.3m). This growth has largely come from the impact of increased volumes of assessments from existing customers, the majority of whose contracts have been successfully renewed in the last 18 months. The period also saw digital project revenues increase to £1.3m (HY24: £0.5m) primarily from the two major contracts signed with IB & CUPA in FY24. Revenue growth was partially offset by the continued wind down of legacy and other non-core contracts to £2.1m (HY24: £4.8m). On the back of this revenue growth, divisional contribution increased by 11.7% to £6.7m (HY24: £6.0m) and adjusted operating profit increased by 56.5% to £3.6m (HY24: £2.3m), 17.6% of revenue (HY24: 11.6%). RM Technology revenues decreased by 12.0% to £22.0m (HY24: £25.0m) as a result of significant headwinds in UK schools’ budgetary pressures and delays in the announcement of key Government funded project, Connect the Classroom – now expected to impact H2. As a result of these external pressures, transactional revenue declined 23% in the period. Divisional contribution declined by £0.4m to £3.5m (HY24: £3.9m). Adjusted operating profit increased slightly to £0.9m (HY24: £0.8m) and adjusted operating margin increased to 4.1% (HY24: 3.2%). Adjusted EBITDA excluding share-based payment charges increased to £3.5m (HY24: £2.2m) reflecting improvement in our operational efficiency. Loss before tax improved to £4.3m (HY24: loss of £6.6m), this £2.3m improvement was delivered by a £1.3m increase in Adjusted Operating Profit from continuing operations and a £1.3m decrease in adjusting items, offset by a £0.3m increase in net financing costs. Statutory loss after tax was £3.3m (HY24: loss of £6.8m), which was driven by a £1.0m tax credit, mainly as a result of the recognition of deferred tax assets in relation to prior year losses. Adjusted diluted loss per share was (4.0)p (HY24: (8.1)p).
Adjusting items To provide an understanding of business performance excluding the effect of significant change programmes and material transactions, certain costs are identified as ‘adjustments’ to business performance as set out below:
1 Restructuring costs in HY25 and HY24 relate to the implementation of the Group’s new Target Operating Model announced in FY24. This restructuring programme has now concluded. 2 Ongoing costs for the CARE pension scheme are presented as an adjusting item within continuing operations as they are not related to the underlying trading operations of the Group, following the discontinuation of the Consortium business. 3 During the six months ended 31 May 2024, the Group released £0.1m of onerous contract provisions previously recognised in the year ended 30 November 2023 as part of the £38.9m charge arising from the announcement of the closure of the Consortium business and the subsequent termination of the ERP replacement programme.
Inventory Inventories have increased to £16.6m (FY24: £15.2m) as TTS is holding stock in advance of anticipated large one-off international orders in H2. Corporate Costs Total corporate costs reduced by £1.3m to £11.1m (FY24: £12.3m) as a result of the savings programmes delivered; these reductions were partially offset by the cost associated with share plan awards for management. Corporate costs in the period after divisional allocations were £3.6m, slightly up from £3.5m in HY24. Taxation The total tax credit for the period for continuing operations was £1.0m (HY24: £0.0m). There are multiple tax effects influencing the tax rate in income, costs, and deferred tax. Cash flow, Net Debt and Lender Agreement The first half of the financial year is normally a working capital outflow period for the Group, with lower revenues and profitability than H2, as well as inventory purchases ahead of the second half peak selling periods in TTS & Technology; the majority of cash inflow from examinations sessions also comes in the second half. On a statutory basis, net cash inflow from operating activities was £1.1m (HY24: outflow of £0.4m), which includes £1.2m (HY24: £2.1m) of deficit recovery payments made to the Group’s defined benefit pension schemes during the period. Adjusted net debt at the end of the period was £59.6m (HY24: £51.7m) as the £1.1m net cash inflow from operating activities (see above) was offset by £4.2m of asset purchases (HY24: £2.1m) as we stepped up investment in RM Ava, our Digital Assessment Platform, £2.8m of interest paid (HY24: £2.9m), and £1.4m of lease repayments (HY24: £1.3m). Since the period end, the Group has secured an agreement with Lenders, which extends the existing £70.0m bank facility to July 2027. The fixed charge over the shares of each of the obligor companies (except for RM plc), and the fixed and floating charge over all assets of the obligor companies granted previously to Lenders, remains in place. Under the amended facility covenants have been reset as follows:
Balance Sheet The Group had net assets of £11.6m at 31 May 2025 (FY24: £17.1m). The balance sheet includes non-current assets of £93.8m (FY24: £90.1m), of which £28.9m (FY24: £29.2m) is goodwill and £19.1m (FY24: £20.5m) relates to the Group’s defined benefit pension scheme which is discussed further below. Operating PPE, intangible and right-of-use assets total £28.5m (FY24: £26.1m) and includes acquired brands, customer relationships, intellectual property, and leases primarily relating to properties used by the Group. Net current liabilities of £2.2m (FY24: net current assets of £0.2m) includes cash and cash equivalents of £3.4m (FY24: £8.2m) and bank overdrafts of £nil (FY24: £4.3m). Non-current liabilities of £80.0m (FY24: £73.2m) includes borrowings of £63.0m (FY24: £55.5m) and lease liabilities of £12.7m (FY24: £12.8m) which are predominately associated with the Group utilisation of properties. Dividend A condition of the previously extended and amended banking facility agreement remains the same, which was to restrict dividend distribution until the Company has reduced its net debt to LTM EBITDA (post IFRS 16) leverage to less than 1x for two consecutive quarters. Therefore, we are not recommending the payment of a dividend and are unlikely to in the short-term since our focus is to continue investing in RM’s growth. Pension The Company operates two defined benefit pension schemes (“RM Scheme” and “CARE Scheme”) and participates in a third, multi-employer, defined benefit pension scheme (“Platinum Scheme”). All schemes are now closed to future accrual of benefits. As set out in Note 10, the net IAS 19 surplus decreased by £1.4m to £19.1m during the period. All three schemes are in surplus. The decrease was driven by returns on assets in the RM scheme underperforming expectations on an IAS19 basis, which was partially offset by contributions and the change in financial assumptions used (specifically the higher discount rate and lower future inflation assumption) which, all else being equal, has reduced the value placed on the liabilities. The 31 May 2024 triennial valuation for the RM and CARE schemes was approved in March 2025, with the previous total scheme deficit becoming a technical surplus. The deficit recovery payments set by the 31 May 2021 valuation of £4.4m per annum until the end of 2024, which then reduce to £1.2m per annum until the end of 2026, will continue but no further recovery payments will be required after that date. Internal Controls During the period management have continued to work on ensuring that financial controls are properly embedded, through a programme of quarterly self-certification by control owners, and independent testing by the Internal Audit & Internal Controls team, who are also expanding the scope of controls to be implemented and tested. The Board and Audit & Risk Committee are updated regularly with respect to ongoing improvements to the control environment and the outcomes of testing. Where controls currently are not designed, implemented, or operating as effectively as they should, management have provided the Committee with assurance that appropriate mitigating actions are in place to conclude that these Financial Statements do not contain material errors. As a by-product of providing greater assurance to management over the effectiveness of financial controls, the Group also expects, in time, to transition to a controls-based audit approach. Going Concern In assessing the going concern position, the Directors have considered the balance sheet position as included on page 12 and the level of available finance not drawn down. The net current liabilities and adjusted net debt for the Group at 31 May 2025 were £2.2m and £59.6m respectively (30 November 2024: net current assets of £0.2m and £51.7m respectively). RM Group plc has a bank facility (“the facility”) which totalled £70.0m at the date of this report. The facility maturity was extended in June 2025 and is committed until July 2027. The terms of the revised facility are as disclosed in Note 12. The debt facilities are subject to financial covenants. Details of these covenants can be found in the ‘Cash Flow, Net Debt and lender agreement’ section above. The Directors have prepared cash flow forecasts for the period to 12 months from the date of this report which indicate there is headroom for both covenants at each measurement period. A number of reasonably plausible downside scenario sensitivities have been assessed, alongside a review of mitigating actions which are within management’s control. While the Directors of the Group believe that all reasonable worst-case downside scenarios occurring together is highly unlikely, under this reasonable worst case scenario without any mitigating actions the Group would continue to comply with the hard liquidity covenant until August 2025, when it would be breached, and the EBITDA covenant until November 2025, when it would be breached. With mitigations applied to the reasonable worst-case scenarios, no breach of either covenant is forecast. Taking this into account, the Group is expected to comply with all debt covenants in place and will have sufficient funds to meet its liabilities as they fall due for at least 12 months from the date of this report. Further detail on the Directors assessment of going concern, including details in relation to the base assessment and the reasonably plausible downside scenario are set out in Note 1 to the financial statements below. Principal risks and uncertainties Pursuant to the requirements of the Disclosure and Transparency Rules, the Group provides the following information on its principal risks and uncertainties. The Board considers that the categories of principal risks and uncertainties which could have a material impact on the Group's performance in the remaining six months of the financial year remain in line with those stated on pages 42 to 45 of the 2024 Annual Report and Financial Statements, which is available at: https://www.rmplc.com/reports Directors’ Responsibility Statement We confirm that to the best of our knowledge:
By order of the Board,
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATED INCOME STATEMENT
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(EXPENSE)
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATED BALANCE SHEET
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
1 The capital redemption reserve arose from the repurchase of issued share capital. It is not distributable. 2 The Group hedging reserve arises from cash flow hedges entered into by the Group. It is not distributable as the gains and losses are unrealised. 3 The Group translation reserve arises on consolidation from the unrealised movement of foreign exchange on the net assets of overseas entities. It is not distributable. The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATED CASH FLOW STATEMENT
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of preparationThe unaudited condensed consolidated financial statements for the six months ended 31 May 2025:
The information relating to the year ended 30 November 2024 is extracted from the Group’s published Annual Report and Financial Statements for that year, which has been delivered to the Registrar of Companies, and on which the auditors’ report (issued by Deloitte) was unqualified and did not contain any emphasis of matter or statements under section 498(2) or 498(3) of the UK Companies Act 2006. RSM, the Company's auditors, have not undertaken an independent review of the condensed set of financial statements in this interim report, consistent with the same period in the prior year. The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period, and the reported amounts of revenue and expenses during the period. Actual results could vary from these estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Principal risks and uncertainties Pursuant to the requirements of the Disclosure and Transparency Rules, the Group provides the following information on its principal risks and uncertainties. The Group considers strategic, operational and financial risks and identifies actions to mitigate those risks. Risk management systems are monitored on an ongoing basis. The principal risks and uncertainties detailed within the Group’s Annual Report and Financial Statements for the year ended 30 November 2024 remain applicable. This is available from the RM website: www.rmplc.com. The principal risks and uncertainties that could have a significant effect on the Group’s financial performance, include the following:
Going concern The unaudited condensed consolidated financial statements for the six months ended 31 May 2025 have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons. At 31 May 2025, the Group had net debt of £59.6m (30 November 2024: £51.7m) and drawn facilities of £64.0m (30 November 2024: £57.0m). Average Group net debt over the six months to 31 May 2025 was £58.9m (year to 30 November 2024: £53.8m) with a maximum borrowings position of £64.0m (year to 30 November 2024: £60.7m). The Group has a £70.0m (2024: £70.0m) committed bank facility (“the facility”) at the date of this report. The facility provides lenders a fixed and floating charge over the shares of all obligor companies (except for RM plc). The facility is due to mature on 5 July 2027, following an amendment and extension of the facility for another 12 months on 23 June 2025. For going concern purposes the Board have assessed the Group’s forecast performance against the following covenants which apply for the period of 12 months from the date of this report:
As part of the Group's business planning process, the Directors of the Group have closely monitored the Group's financial forecasts, key uncertainties, and sensitivities. As part of this exercise, the Directors of the Group reviewed a number of scenarios, including the base case and reasonable worst-case downside scenarios. The base case scenario assumes ongoing downturns in UK and International markets as experienced in the year to 30 November 2024 and first half of FY25, and also assumes a broadly similar macroeconomic environment to that currently being experienced. However, it also assumes revenue growth across all businesses in the Group, and profit margin growth including annualised savings from restructuring programmes undertaken in the period. Under the base case, adequate headroom is forecast against the covenants such that there are no breaches within the going concern period of 12 months from the date of this report. The aggregate impact of reasonably plausible downsides has been taken together to form a reasonable worst-case scenario that removes a number of the growth assumptions from the base case, including delays in significant customer contracts or distributor arrangements, markets and/or market share not growing, reductions in contract wins or renewals, and increases in costs that cannot be passed on to customers. Taken together, the reasonable worst-case scenario applies significant reductions to the revenue, EBITDA and cash figures in the base case forecast. While the Directors of the Group believe that all reasonable worst-case downside scenarios occurring together is highly unlikely, under this scenario without any mitigating actions the Group would continue to comply with the hard liquidity covenant until August 2025, when it would be breached, and the EBITDA covenant until November 2025, when it would be breached. Taking into account the associated mitigations that the Directors of the Group are confident could be enacted in the event these reasonable worst-case downside scenarios should occur, the Group is expected to comply with all debt covenants in place and will have sufficient funds to meet its liabilities as they fall due for at least 12 months from the date of this report. These mitigations include reducing discretionary spend, delaying capital expenditure and selling surplus IP addresses. These are actions the Group has taken before and therefore the Board is confident of its ability to deliver these mitigating actions if required. The Board’s assessment of the likelihood of a further downside scenario is remote. Management has undertaken reverse stress testing of the base case scenario which shows that, should sales reduce in TTS by £8.6m (12%) or Technology by £10.9m (22%) in the quarter ended 31 August 2025 in isolation, the covenants would still be complied with for that quarter if none of the other downside scenarios were to occur. The timing of this reverse stress test is aligned with the period at which the first covenant is forecast to be breached under the unmitigated downside scenario disclosed above. Consequently, the Directors of the Group have concluded that the going concern basis of accounting remains appropriate and the financial statements do not require the adjustments that would result if the Group were unable to continue as a going concern. Alternative Performance Measures (APMs) In response to the Guidelines on APMs issued by the European Securities and Markets Authority (ESMA) and the Financial Reporting Council (FRC), additional information on the APMs used by the Group is provided below. The following APMs are used by the Group:
Further explanation of what each APM comprises and reconciliations between statutory reported measures and adjusted measures are shown in Note 4. The Board believes that presentation of the Group results in this way is relevant to an understanding of the Group’s financial performance (and that of each segment). Underlying performance excludes adjusted items which are identified by virtue of their size, nature and incidence. The treatment of adjusted items is applied consistently period on period. This presentation is consistent with the way that financial performance is measured by management, reported to the Board, the basis of financial measures for senior management’s compensation schemes and provides supplementary information that assists the user to understand the underlying financial performance, position and trends of the Group. The APMs used by the Group are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures. All APMs relate to the current year results and comparative periods where provided. The definition of Adjusted EBITDA has been redefined to exclude share-based payment charges, in order to allow evaluation of core operating results that are more closely aligned to cashflows. Comparatives have been restated to show the impact of the change. See Note 4. New accounting pronouncements adopted On 1 December 2024, the Group adopted certain new accounting policies to comply with amendments to IFRS, including:
None of the above had a material impact on the consolidated results, financial position or cash flows of the Group. Further details are provided in the Group’s Annual Report and Financial Statements for the year ended 30 November 2024. Key sources of estimation uncertainty In applying the Group’s accounting policies the Directors are required to make estimates and assumptions. Actual results may differ from these estimates. The following are considered key sources of estimation uncertainty:
Critical accounting judgements In applying the Group’s accounting policies the Directors are required to make judgements and assumptions, actual results may differ from these. The following are considered key critical accounting judgments:
2. Operating SegmentsThe Group’s business is supplying products, services and solutions to the UK and international education markets. The Chief Executive Officer is the Chief Operating Decision Maker. The Chief Operating Decision Maker reviews segments at an adjusted operating profit level and adjustments are not allocated to segments. Information reported to the Chief Operating Decision Maker for the purposes of resource allocation and assessment of segmental performance is focused on the nature of each type of activity. The Group was historically structured into four operating divisions: RM TTS, RM Assessment, RM Technology and RM Consortium. RM Consortium was classified as a discontinued operation in the second half of FY24 and therefore ceased to be a reportable segment. The HY24 comparatives have been restated. Typically, two of the divisions are impacted by seasonality trends. RM TTS experiences increased revenues in March, June, July and October in line with customer financial and academic years. In RM Assessment scanning revenues are recognised over the period of the scanning activity and create seasonality depending on the timing of exam sessions and the number and type of examinations being sat. UK government assessment scanning revenues are spread typically between May to July. This segmental analysis shows the result of these divisions. Revenue is that earned by the Group from third parties. Net financing costs and tax are not allocated to segments as the funding, cash and tax management of the Group are activities carried out by the central treasury and tax functions.
Segmental results
1 Included in UK are International Sales via UK Distributors of £318,000.
1 Included in UK are International Sales via UK Distributors of £542,000. 2 HY24 is restated to present the results of RM Consortium within discontinued operations as set out in Note 6.
Segmental assets
Other non-segmented assets include defined benefit pension surplus, tax assets and cash and short-term deposits. 3. Revenue
4. Alternative Performance MeasuresAs set out in Note 1, the Group uses alternative performance measures that the Board believes reflect the trading performance of the Group, and it is these adjusted measures that the Board use as the primary measures of performance during the year.
Adjusted items: These are items which are identified by virtue of their size, nature and incidence to be important to understanding the performance of the business including the comparability of the results year on year. These items can include, but are not restricted to, impairment; gain on held-for-sale assets and related transaction costs; changes in the provision for exceptional property costs; the gain/loss on sale of operations; and restructuring and acquisition costs. The amortisation of acquisition related intangible assets is an annual recurring adjustment to profit that is a non-cash charge arising from historical investing activities. This adjustment is made to clearly highlight the amounts relating to historical acquisitions and is in common with peer companies across the technology sector. The income generated from the use of these intangible assets is, however, included in the adjusted profit measures. The following costs and income were identified as adjusted items:
Adjusted net debt of £59.6m (30 November 2024: £51.7m) is the total of borrowings less capitalised fees of £63.0m (30 November 2024: £55.5m), bank overdraft of £nil (30 November 2024: £4.3m) and cash at bank of £3.4m (30 November 2024: £8.2m). Lease liabilities of £14.8m (30 November 2024: £15.0m) are excluded from this measure as they are not included in the measurement of adjusted net debt for the purpose of covenant calculations. Adjusted net debt is a key metric measured by management as it is used in covenant calculations. The above adjustments have the following impact on key metrics:
Adjusted operating profit is defined as the profit from continuing operations before excluding the adjustments referred to above. Operating margin is defined as the operating profit as a percentage of revenue. 5. Tax
For the interim periods, the ETR is calculated by applying a forecast full year ETR to the interim results. The standard rate of corporation tax in the UK for the period is 25% (2024: 25%).
6. Discontinued Operations and Assets held for saleDiscontinued operations On 24 November 2023, the Group announced its decision to close the RM Consortium business. By 30 November 2024, the RM Consortium business had completely ceased operations, and the results of the business are therefore presented within discontinued operations for the comparative period. Income statement analysis of discontinued operations
7. Earnings per share
In accordance with IAS 33 the diluted loss per share is corrected on the face of the Income Statement to reflect the undiluted figure as a loss should not be diluted. 8. Borrowings
At 31 May 2025, the Group had drawn down £64.0m (30 November 2024: £57.0m) of the £70.0m committed revolving credit facility, which expires in July 2027. For further details of committed revolving credit facility please see Note 12. 9. Provisions
Disclosure of provisions
10. Defined benefit pension schemesThere are three defined benefit pension schemes: The Research Machines plc 1988 Pension Scheme (RM Scheme), The Consortium CARE Scheme (CARE Scheme) and The Prudential Platinum Pension (Platinum Scheme). In addition, the Group has TUPE employees who retain membership of Local Government Pension Schemes, many of which have a customer contractual guarantee whereby the Group reimburses for any IAS 19 deficit when it ceases to be a participating employer and are therefore accounted for as a defined benefit arrangement, with actuarial movements recognised through Other Comprehensive Income. For further details of each of these schemes please see Note 24 in the Group’s Annual Report and Financial Statements for the year ended 30 November 2024. Reconciliation of net defined benefit obligation
Significant actuarial assumptions
The 31 May 2024 triennial valuation for the RM and CARE schemes was approved in March 2025, with the previous total scheme deficit becoming a technical surplus. The deficit recovery payments set by the 31 May 2021 valuation were £4.4m per annum (£3.2m to the RM scheme and £1.2m to the CARE scheme). The RM scheme payments ceased on 31 December 2024 and the CARE scheme payments will cease on 31 December 2026, with no further recovery payments required after that date. During the year ended 30 November 2023, the Group agreed with the Trustees of the RM and CARE Schemes to provide the Schemes with a second ranking fixed and floating charge over the shares of all obligor companies (except for RM plc) and a payment of £0.5m each at bi-annual intervals starting on August 2023 which is contingent upon the adjusted debt leverage ratio being less than 3.2x at that date. No such payments were made in the current or comparative periods. 11. Related party transactionsTransactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. The Group encourages its Directors and employees to be governors, trustees or equivalent of educational establishments. The Group trades with these establishments in the normal course of its business. The sole significant related party transaction relates to the provision of contract staff by Searchlight Business Services Limited, of which Mark Cook (the Chief Executive Officer of RM plc) is non-Executive Chairman. In the six months to 31 May 2025 the Group purchased services totalling £0.1m. Mr Cook is not involved in the commercial discussions relating to this supply. 12. Post balance sheet eventsOn 23 June 2025 the lenders approved an extension and amendment to the Group’s revolving credit facility, which will now run to 6 July 2027. The following covenants apply from the approval date to the end of the facility:
Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ISIN: | GB00BJT0FF39 |
| Category Code: | IR |
| TIDM: | RM. |
| LEI Code: | 2138005RKUCIEKLXWM61 |
| Sequence No.: | 395865 |
| EQS News ID: | 2169590 |
| End of Announcement | EQS News Service |
| |
UK Regulatory announcement transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.