RM PLC on Wednesday said it expects to report profit as much as 10% ahead of market expectations after a ‘year of transformation’.
Shares in RM, an Abingdon, England-based supplier of technology and resources to the education sector, were up 8.5% to 96.55 pence in London on Wednesday morning.
RM said it expects adjusted operating profit for the financial year that ended November 30 to be between £8.4 million and £8.8 million, which is between 5% and 10% ahead of market expectations. The company believes that market expectations for adjusted operating profit are £8.0 million.
Adjusted operating profit from continuing operations was £300,000 in financial 2023, as the company said it faced a turbulent period.
RM on Wednesday said it expects adjusted earnings before interest, tax, depreciation and amortisation between £13 million to £14 million, up from £7.0 million the year before.
Revenue from continuing operations, which now excludes the Consortium business, is expected to be 5% to 6% lower than the prior year. Consortium is a school supply operation that was closed after losing revenue.
Revenue has been hurt by a ‘challenging’ UK schools market, but RM said the affected divisions, Technical Teaching Solutions and Technology, have improved their profitability ‘reflecting a realigned operating model delivering greater operational efficiencies with a lower cost base’.
RM said its contracted order book is closing the year over twice as large as last year, in part due to approximately £100 million of contracts for its assessment platform which were won during financial 2024.
Net debt also finished the year ‘better’ than market expectations of £53 million.
Chief Executive Officer Mark Cook said: ‘This has been a year of transformation for RM, and the success of our strategy is reflected in the progress we have made driving profitability and growing our contracted order book. Our focus on the significant opportunities for Assessment has delivered a number of major new digital contracts, alongside operational improvements throughout the business. We are pleased with the progress that has been made and remain focused on reducing our net debt.’
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