REG - RM PLC - Final Results <Origin Href="QuoteRef">RM.L</Origin> - Part 3

RMAnnouncement

07/02/2017 07:07

- Part 3: For the preceding part double click  ID:nRSG1773Wb 

                                                                -                                1,844                           1,057  2,901    
 Unwind of discount                                                                     84                               -                               -      84       
 At 30 November 2016                                                                    3,157                            1,844                           1,692  6,693    
                                                                                                                                                                         
 Provisions for onerous leases and dilapidations have been recognised at the present  
 value of the expected obligation at discount rates of 2.6% (2015: 2.6%) per annum    
 reflecting a risk free discount rate, applicable to the liabilities. These discounts 
 will unwind to their undiscounted value over the remaining lives of the leases via a 
 finance cost within the Income Statement.  At 30 November 2016, £1,465,000 (2015:    
 £1,829,000) of the provision refers to onerous leases, and £1,692,000 (2015:         
 £1,750,000) refers to dilapidations. The major release in the prior year relates to  
 the successful sub-letting of one of the Group's properties.                         
 The average remaining life of the leases at 30 November 2016 is 3.1 years (2015: 3.5 
 years).                                                                              
 In making their assessment of the required provisions, the group is required to      
 estimate the likely sub-let income that could be earned over the remaining life of   
 the lease.  This requires the Directors to make judgements relating to the likelihood 
 that a property will be sub-let and the income that will be earned.                  
 Employee related restructuring provisions refer to costs arising from restructuring  
 to meet the future needs of the Group and are all expected to be utilised during the 
 following financial year.                                                            
 Other provisions includes one-off items not covered by any other category. During the 
 year risk provisions totalling £475,000 from ended BSF contracts were transferred    
 from long-term contract creditors to provisions.  The other most significant element 
 in the provision at 30 November 2016 relates to regulatory compliance.               
 
 
                                          
                                          
 Group                      2016   2015   
                            £000   £000   
                                          
 Current liabilities        3,536  2,077  
 Non-current liabilities    3,157  2,864  
                            6,693  4,941  
                          
 
 
 12. Share capital                                                                          
                                                                                            
 Company and Group                                         Ordinary shares of 22/7p  
                                                           '000                      £000   
 Allotted, called-up and fully paid:                                                        
 At 1 December 2014                                        82,640                    1,889  
 Issued in the year                                        10                        1      
 At 30 November 2015                                       82,650                    1,890  
 Issued in the year                                        -                         -      
 At 30 November 2016                                       82,650                    1,890  
                                                                                            
 Ordinary shares issued carry no right to fixed income.                                     
                                                                                            
 
 
13. Defined benefit pension scheme 
 
As at 31 May 2015, the triennial valuation for statutory funding purposes
showed a deficit of £41,800,000 (31 May 2012: £53,500,000). The Group agreed
with the Scheme Trustee that it will repay this amount via deficit catch-up
payments of £4,000,000 in December 2015 and £3,600,000 per annum until 30
September 2024.  At 30 November 2016 there were amounts outstanding of
£300,000 (2015: £300,000) for one month's deficit payment and £32,000 (2015:
£32,000) for Scheme expenses.  The next triennial valuation of the Scheme is
due as at 31 May 2018 and may result in changes to the level of deficit
catch-up payments required. 
 
In addition to the £4,000,000 of catch up payments in December 2015, a further
£4,000,000 contribution was paid in December 2015 into an escrow account
established in March 2014, the use of which within the Scheme is required to
be agreed by RM Education Limited and the Scheme Trustee. 
 
IAS 19 Employee Benefits, amended June 2011, has been adopted in these
financial statements. 
 
14. Related party transactions 
 
Ipswich School 
 
John Poulter, non-executive director of RM plc, is a director of Ipswich
School. Sales made in the year total £2,419 and at the year end there is a
balance of £90 outstanding. 
 
Grant Thornton LLP 
 
The Company has engaged Grant Thornton to provide advice in connection with
certain acquisition related activities.  No payments were made to Grant
Thornton during the year ended 30 November 2016.  Deena Mattar, one of the
Company's Non-Executive Directors, is a member of the Advisory Board of Grant
Thornton. Grant Thornton were chosen from a competitive tender conducted by
the Company and Deena Mattar was not involved in that exercise. 
 
British Educational Suppliers Association 
 
TTS Director Catherine Jeffrey sits on the Executive Council of BESA, in the
year the Group made purchases of £7,424. 
 
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. 
 
15. Events after the reporting period 
 
On 7 February 2017, the Company agreed to acquire the entire issued share
capital of Hedgelane Limited (including its principal trading subsidiary known
as The Consortium) from Smiths News Holdings Limited (part of the Connect
Group plc group of companies) (the "Acquisition").  In connection with the
Acquisition, the Company has entered into a £75 million revolving credit
facility (the "New Facility") with Barclays Bank plc and HSBC Bank plc. 
Completion of the Acquisition is conditional upon, among other things,
clearance being received from the Competition and Markets Authority and
shareholder approval.  The New Facility will become available upon completion
of the Acquisition and will expire 36 months from such date.  If the
Acquisition does not complete for any reason, the New Facility will not come
into effect and the Current Facility will remain in force unaffected. 
 
This information is provided by RNS
The company news service from the London Stock Exchange