REG - RM PLC - Final Results <Origin Href="QuoteRef">RM.L</Origin> - Part 2
07/02/2017 07:06
- Part 2: For the preceding part double click ID:nRSG1773Wa
- - - - 18
Sale of shares held in staff share scheme - - - - - - 55 55
Share-based payment awards exercised - - 2,910 - - - (3,038) (128)
Purchase of own shares - - (2,470) - - - - (2,470)
Share-based payment fair value charges - - - - - - 864 864
Ordinary dividends paid 7 - - - - - - (3,424) (3,424)
At 30 November 2015 1,890 27,035 (2,510) 94 364 (384) (7,342) 19,147
Profit for the year - - - - - - 11,646 11,646
Other comprehensive (expense)/income - - - - 515 261 (19,553) (18,777)
Total comprehensive (expense)/income - - - - 515 261 (7,907) (7,131)
Transactions with owners of the Company
Share-based payment awards exercised - - 840 - - - (1,450) (610)
Purchase of own shares - - (317) - - - - (317)
Share-based payment fair value charges - - - - - - 1,006 1,006
Ordinary dividends paid 7 - - - - - - (4,299) (4,299)
At 30 November 2016 1,890 27,035 (1,987) 94 879 (123) (19,992) 7,796
CONSOLIDATED BALANCE SHEET
At 30 November 2016 At 30 November 2015
Note £000 £000
Non-current assets
Goodwill 14,067 14,067
Acquisition related intangible assets - 8
Other intangible assets 704 562
Property, plant and equipment 6,219 7,059
Other receivables 8 1,153 1,168
Deferred tax assets 5 8,793 6,121
30,936 28,985
Current assets
Inventories 10,689 10,862
Trade and other receivables 8 24,403 25,592
Cash and short-term deposits 9 39,987 48,320
Assets held for sale - 1,162
75,079 85,936
Total assets 106,015 114,921
Current liabilities
Trade and other payables 10 (54,521) (64,974)
Tax liabilities (1,259) (2,787)
Provisions 11 (3,536) (2,077)
Liabilities directly associated with assets classified as held for sale - (549)
(59,316) (70,387)
Net current assets 15,763 15,549
Non-current liabilities
Other payables 10 (971) (662)
Provisions 11 (3,157) (2,864)
Defined Benefit Pension Scheme obligation (34,775) (21,861)
(38,903) (25,387)
Total liabilities (98,219) (95,774)
Net assets 7,796 19,147
Equity attributable to shareholders
Share capital 12 1,890 1,890
Share premium account 27,035 27,035
Own shares (1,987) (2,510)
Capital redemption reserve 94 94
Hedging reserve 879 364
Translation reserve (123) (384)
Retained earnings - (deficit) (19,992) (7,342)
Total equity 7,796 19,147
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 November 2016
Year ended Year ended
30 November 2016 30 November 2015
Note £000 £000
Profit before tax 15,115 19,235
Investment income 3 (279) (1,303)
Finance costs 4 1,086 1,659
Profit from operations 15,922 19,591
Adjustments for:
Impairment of non-acquisition related intangible assets 77 150
Amortisation of acquisition-related intangible assets 8 303
Amortisation of non-acquisition related intangible assets 239 297
Depreciation and impairment of property, plant and equipment 2,223 2,406
Gain on sale of operations (135) (65)
Gain on disposal of property, plant and equipment (5) (95)
Loss on foreign exchange derivatives 684 133
Share-based payment charge 1,006 864
Increase/(decrease) in provisions 2,557 (716)
Defined Benefit Pension Scheme administration cost 845 530
Operating cash flows before movements in working capital 23,421 23,398
Decrease/(increase) in inventories 173 (707)
Decrease in receivables 1,056 6,102
Decrease in trade and other payables (10,338) (14,369)
Utilisation of onerous lease and dilapidations provisions 11 (345) (2,186)
Utilisation of employee-related restructuring provisions 11 (184) (1,166)
Utilisation of other provisions 11 (396) (132)
Cash generated from operations 13,387 10,940
Defined benefit pension scheme cash contributions (11,984) (3,984)
Tax paid (3,567) (171)
Borrowing facilities arrangement and commitment fees (422) (447)
Income on sale of finance lease debt 6 45
Net cash inflow from operating activities (2,580) 6,383
Investing activities
Interest received 255 364
Repayment of loans by third parties 16 18
Proceeds from sale of other receivables 2 - 1,586
Proceeds from sale of operations 759 -
Proceeds on disposal of property, plant and equipment 43 165
Purchases of property, plant and equipment (1,333) (1,576)
Purchases of other intangible assets (456) (322)
Amounts transferred from short term deposits 9 2,986 -
Net cash generated by/(used in) investing activities 2,270 235
Financing activities
Dividends paid 7 (4,299) (3,424)
Repayment of capital obligations under vehicle finance leases - (244)
Proceeds of share capital issue, net of share issue costs - 18
Proceeds from sale of shares held in Staff Share Scheme - 55
Purchase of own shares (317) (2,470)
Satisfaction of share-based payment awards (610) (128)
Net cash used in financing activities (5,226) (6,193)
Net (decrease)/increase in cash and cash equivalents (5,536) 425
Cash and cash equivalents at the beginning of the year 9 42,320 41,893
Effect of foreign exchange rate changes 189 2
Cash and cash equivalents at the end of the year 9 36,973 42,320
1. Preliminary announcement
The preliminary results for the year ended 30 November 2016 have been prepared
in accordance with those International Accounting Standards (IAS) and
International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB) and adopted for use in the EU and therefore
comply with Article 4 of the EU IAS Regulation applied in accordance with the
provisions of the Companies Act 2006. However, this announcement does not
contain sufficient information to comply with IFRS. The Group expects to
publish a full Strategic Report, Directors' Report and financial statements
which will be delivered before the Company's annual general meeting on 22
March 2017. The full Strategic Report and Directors' Report and financial
statements will be published on the Group's website at www.rmplc.com.
The financial information set out in this preliminary announcement does not
constitute the Group's statutory accounts for the year ended 30 November 2016.
Statutory accounts for 2015 have been delivered to the Registrar of Companies
and those for 2016 will be delivered following the Company's annual general
meeting. The auditor's reports on both the 2016 and 2015 accounts were
unqualified, did not draw attention to any matters by way of emphasis without
qualifying their report and did not contain statements under s498(2) or (3) of
the Companies Act 2006 or equivalent preceding legislation. This Preliminary
announcement was approved by the Board of Directors on 7 February 2017.
Consolidated Income Statement presentation
The Income Statement is presented in three columns. This presentation is
intended to give a better guide to business performance by separately
identifying adjustments to profit which are considered exceptional in nature
or with potential significant variability year on year in non-cash items which
might mask underlying trading performance.
The columns extend down the Income Statement to allow the tax and earnings per
share impacts of these transactions to be disclosed. Equivalent adjustments
to profit arising in future years, including increases in or reversals of
items recorded, will be disclosed in a consistent manner.
Adjustments to profit
See note 2 for further details in respect of adjustments to profit, which have
been analysed as recurring and non-recurring items.
Basis of preparation
The financial statements have been prepared on the historical cost basis
except for certain financial instruments, share-based payments and pension
assets and liabilities which are measured at fair value. The preparation of
financial statements, in conformity with generally accepted accounting
principles, requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Although these
estimates are based on the Directors' best knowledge of current events and
actions, actual results ultimately may differ from those estimates.
Significant accounting policies
The accounting policies used for the preparation of this announcement have
been applied consistently.
2. Operating segments
The Group's business is supplying products, services and solutions to the UK and international education markets. Information reported to the Group's Chief Executive for the purposes of resource allocation and assessment of segmental performance is focussed on the nature of each type of activity. The Group is structured into three operating divisions: RM Resources, RM Results and RM Education. The exited business in the year relates to SpaceKraft. A full description of each division, together with comments
on its performance and outlook, is given in the Strategic Report. Corporate Services consists of central business costs associated with being a listed company and non-specific pension costs. This Segmental analysis shows the results and assets 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
RM RM RM Corporate Exited Total
Year ended 30 November 2016 Resources Results Education Services Businesses
£000 £000 £000 £000 £000 £000
Revenue
UK 46,779 26,925 75,450 - 151 149,305
Europe 5,249 3,231 1,138 - - 9,618
North America 1,723 - 232 - - 1,955
Asia 981 117 50 - - 1,148
Middle East 2,815 - 9 - - 2,824
Rest of the world 1,288 1,307 170 - - 2,765
58,835 31,580 77,049 - 151 167,615
Adjusted profit from operations 10,156 6,798 5,820 (3,926) (19) 18,829
Investment income 279
Adjusted finance costs (1,012)
Adjusted profit before tax 18,096
Adjustments (see below) (2,981)
Profit before tax 15,115
RM RM RM Corporate Exited Total
Year ended 30 November 2015 Resources Results Education Services Businesses
£000 £000 £000 £000 £000 £000
Revenue
UK 52,391 26,508 79,285 - 3,279 161,463
Europe 4,062 3,039 423 - 165 7,689
North America 932 - 272 - 64 1,268
Asia 678 109 171 - 22 980
Middle East 4,555 - 7 - 18 4,580
Rest of the world 925 1,069 85 - 169 2,248
63,543 30,725 80,243 - 3,717 178,228
Adjusted profit from operations 11,107 5,554 5,494 (4,140) 184 18,199
Investment income 409
Adjusted finance costs (1,510)
Adjusted profit before tax 17,098
Adjustments (see below) 2,137
Profit before tax 19,235
Adjustments to administrative expenses
Year ended Year ended
30 November 2016 30 November 2015
£000 £000
Amortisation of acquisition-related intangible assets 8 303
Impairment of held for sale assets and related transition costs - 323
Gain on sale of operations (135) (65)
Share-based payment charges 1,006 864
Release of provisions for dilapidations on leased properties and onerous lease contracts (90) (2,368)
Restructuring 1,593 (243)
Acquisition related costs 525 -
Exceptional credit on Defined Benefit Pension Scheme - (206)
2,907 (1,392)
In the year ended 30 November 2016 notable adjustments to profit include:
Recurring items:
These are items which occur regularly but which management judge to have a
distorting effect on the underlying results of the Group or are not regularly
monitored for the purpose of determining business performance. These items
include the amortisation of acquisition related intangible assets; share-based
payment charges and changes in the provision for dilapidations and onerous
lease contracts.
Recurring items are adjusted each year irrespective of materiality to ensure
consistent treatment.
Non-recurring items:
These are items which are non-recurring and are identified by virtue of either
their size or their nature. These items can include, but are not restricted
to, impairment of held for sale assets and related transition costs; the
gain/loss on sale of operations and restructuring and acquisition costs. As
these items are one-off or non-operational in nature, management considers
that they would distort the Group's underlying business performance.
During the year, the restructuring of the Infrastructure part of the RM
Education division was undertaken to move away from some of the lowest margin
transactional elements such as network infrastructure, network installation
and third party hardware sales. This led to a reduction of broadly 10% of the
RM Education UK staff and a one-off exceptional charge of £1.6m.
During the year, the group incurred professional advisor costs relating to an
acquisition of £525,000, see note 15 for further details.
In the prior year, the Group's 135 Milton Park leased premises were sub-let to
South Oxfordshire District Council for a minimum period of 3 years. The
premises are onerous to the Group's requirements, as they were at 30 November
2014, and on sub-letting £2.4m was released from the onerous lease provision.
In the prior year, the Group's interests in Newham Learning Partnership (PSP)
ltd were sold for a total cash consideration of £1.6m; and a profit of £0.9m
was recorded as an adjustment to Investment income (see note 3).
Segmental assets
RM RM RM Corporate Exited
Resources Results Education Services Businesses Total
£000 £000 £000 £000 £000 £000
At 30 November 2016
Segmental 31,968 7,085 17,803 217 - 57,073
Other 48,942
Total assets 106,015
RM RM RM Corporate Exited
Resources Results Education Services Businesses Total
£000 £000 £000 £000 £000 £000
At 30 November 2015
Segmental 32,962 7,732 16,539 700 1,162 59,095
Other 55,826
Total assets 114,921
3. Investment income
Year ended Year ended
30 November 2016 30 November 2015
£000 £000
Bank interest 123 224
Income on sale of finance lease debt 46 45
Income from sale of other receivables (see note 2) - 894
Other finance income 110 140
279 1,303
4. Finance costs
Year ended Year ended
30 November 2016 30 November 2015
Note £000 £000
Borrowing facilities arrangement fees and commitment fees 421 467
Net finance costs on defined benefit pension scheme 498 964
Unwind of discount on long term contract provisions 37 74
Unwind of discount on onerous lease and dilapidations provisions 11 84 149
Other finance costs 46 5
1,086 1,659
5. Tax
a) Analysis of tax charge in the Consolidated Income Statement
Year ended Year ended
30 November 2016 30 November 2015
£000 £000
Current taxation
UK corporation tax 2,924 3,684
Adjustment in respect of prior years 302 297
Overseas tax 296 278
Total current tax charge 3,522 4,259
Deferred taxation
Temporary differences 173 259
Adjustment in respect of prior years (237) (213)
Overseas tax 11 (32)
Total deferred tax (credit)/charge (53) 14
Total Consolidated Income Statement tax charge 3,469 4,273
b) Analysis of tax (credit)/charge in the Consolidated Statement of Comprehensive Income
Year ended Year ended
30 November 2016 30 November 2015
£000 £000
UK corporation tax
Defined benefit pension scheme (1,241) (469)
Share based payments (142) (504)
Deferred tax
Defined benefit pension scheme movements (2,325) 949
Defined benefit pension scheme escrow (749) -
Share based payments 110 540
Deferred tax relating to the change in rate 345 470
Total Consolidated Statement of Comprehensive Income tax (credit)/charge (4,002) 986
c) Reconciliation of Consolidated Income Statement tax charge
The tax charge in the Consolidated Income Statement reconciles to the effective rate applied by the Group as follows:
Year ended 30 November 2016 Year ended 30 November 2015
Adjusted Adjustments Total Adjusted Adjustments Total
£000 £000 £000 £000 £000 £000
Profit on ordinary activities before tax 18,096 (2,981) 15,115 17,098 2,137 19,235
Tax at 20% (2015: 20.33%) thereon: 3,619 (596) 3,023 3,476 434 3,910
Effects of:
- change in tax rate on carried forward 65 - 65 123 - 123
deferred tax assets
- other expenses not deductible for tax 110 - 110 50 - 50
purposes
- other temporary timing differences - 151 151 (7) 1 (6)
- R&D tax credit (10) - (10) 4 - 4
- impairments - - - 12 36 48
- overseas tax 81 - 81 246 - 246
- gain on sale of operations - (27) (27) - (182) (182)
- prior period adjustments 76 - 76 80 - 80
Tax charge in the Consolidated Income Statement 3,941 (472) 3,469 3,984 289 4,273
d) Deferred tax
The Group has recognised deferred tax assets as these are anticipated to be recoverable against profits in future periods. The major deferred tax assets and liabilities recognised by the Group and movements thereon are as follows:
Group Accelerated tax depreciation Defined Share-based payments Short-term timing differences Acquisition related intangible assets Total
benefit pension scheme obligation
£000 £000 £000 £000 £000 £000
At 1 December 2014 787 5,351 1,016 1,085 (92) 8,147
Credit/(charge) to income - - (53) (52) 91 (14)
Credit to equity - (1,419) (540) - - (1,959)
Transfer to assets held for sale (53) - - - - (53)
At 30 November 2015 734 3,932 423 1,033 (1) 6,121
Credit/(charge) to income 112 - (59) (1) 1 53
Charge to equity - 1,980 (110) 749 - 2,619
At 30 November 2016 846 5,912 254 1,781 - 8,793
Certain deferred tax assets and liabilities have been offset above.
6. Earnings per ordinary share
Year ended 30 November 2016 Year ended 30 November 2015
Profit for Weighted average number of shares Pence per share Profit for Weighted average number of shares Pence per share
the year the year
£000 '000 £000 '000
Basic earnings per ordinary share
Basic earnings 11,646 81,144 14.4 14,962 80,954 18.5
Adjustments (see note 2) 2,509 - 3.0 (1,848) - (2.3)
Adjusted basic earnings 14,155 81,144 17.4 13,114 80,954 16.2
Diluted earnings per ordinary share
Basic earnings 11,646 81,144 14.4 14,962 80,954 18.5
Effect of dilutive potential ordinary shares: share based payment awards - - - - 3,080 (0.7)
Diluted earnings 11,646 81,144 14.4 14,962 84,034 17.8
Adjustments (see note 2) 2,509 - 3.0 (1,848) - (2.2)
Adjusted diluted earnings 14,155 81,144 17.4 13,114 84,034 15.6
7. Dividends
Amounts recognised as distributions to equity holders were:
Year ended Year ended
30 November 2016 30 November 2015
£000 £000
Final dividend for the year ended 30 November 2015 - 3.80p per share (2014: 3.04p) 3,079 2,451
Interim dividend for the year ended 30 November 2016 - 1.50p per share (2015: 1.20p) 1,220 973
4,299 3,424
The proposed final dividend of 4.50p per share for the year ended 30 November 2016 was approved by the Board on 7 February 2017. The dividend is subject to approval by Shareholders at the annual general meeting. The anticipated cost of this dividend is £3,660,000 which is not included as a liability at 30 November 2016.
8. Trade and other receivables
2016 2015
Note £000 £000
Current
Financial assets
Trade receivables 15,060 17,303
Long-term contract balances - 138
Other receivables 1,294 1,048
Derivative financial instruments 685 138
Accrued income 1,824 1,489
Amounts owed by Group undertakings - -
18,863 20,116
Non-financial assets
Prepayments 5,540 5,476
24,403 25,592
Non-current
Financial assets
Other receivables 1,153 1,168
25,556 26,760
9. Cash and short-term deposits
2016 2015
£000 £000
Cash and cash equivalents 36,973 42,320
Short-term deposits 3,014 6,000
39,987 48,320
The short-term deposits are for a maximum period of 6 months at interest rates of 0.70%.
10. Trade and other payables
2016 2015
Note £000 £000
Current liabilities
Financial liabilities
Trade payables 13,777 11,518
Amounts owed to Group undertakings - -
Other taxation and social security 2,842 4,010
Other payables 2,284 761
Accruals 9,096 12,525
Obligations under finance leases - 40
Derivative financial instruments 45 5
Long-term contract balances 16,766 25,509
44,810 54,368
Non-financial liabilities
Deferred income 9,711 10,606
54,521 64,974
Non-current liabilities
Non-financial liabilities:
Deferred income:
- due after one year but within two years 462 472
- due after two years but within five years 509 190
971 662
55,492 65,636
11. Provisions Onerous lease and dilapidations Employee-related restructuring Other Total
Group £000 £000 £000 £000
At 30 November 2014 8,094 365 708 9,167
Utilisation of provisions (2,186) (1,166) (132) (3,484)
Release of provisions (2,368) (85) (423) (2,876)
Increase in provisions - 1,070 1,025 2,095
Effect of movements in exchange rates - - 2 2
Transfer to held for sale liabilities (110) - (2) (112)
Unwind of discount 149 - - 149
At 30 November 2015 3,579 184 1,178 4,941
Utilisation of provisions (345) (184) (396) (925)
Release of provisions (161) - (147) (308)
Increase in provisions
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