REG - RM PLC - Interim Results <Origin Href="QuoteRef">RM.L</Origin> - Part 1

RMAnnouncement

16/07/2015 14:08

RNS Number : 1809S
RM PLC
06 July 2015
6 July 2015 
RM plc announces interim results for the 6 months ended 31 May 2015
RM plc, the educational ICT and resources group, announces its interim results for the 6 months ended 31 May 2015.
Results Highlights
 Total revenue of 79.8m (2014: 92.1m) and adjusted* operating profit margin increased to 8.7%
o RM Resources revenue growth of 11% and operating profit margin increased to 13.9%
o RM Results revenue growth of 5% with 15.1% operating profit margin
o RM Education revenue declined as expected with operating profit margin increased to 7.0%
 Adjusted* operating profit decreased by 5% to 6.9m (2014: 7.3m). Adjusted* profit before tax of 6.3m (2014: 7.0m)
 Adjusted* profit before tax is lower than statutory profit before tax by 2.9m (2014: higher by 0.4m) mainly reflecting the release of a provision following the sub-lease of one surplus property
 Adjusted* diluted EPS: 5.8p (2014: 6.2p)
 Net cash and short-term deposits of 43.1m (2014: 40.3m at 31 May)
 Pension deficit increased to 30.0m (2014: 26.8m at 30 November). Deficit net of deferred tax was 24.0m
 Interim dividend per share increased by 25% to 1.20p (2014: 0.96p). 
Outlook
 RM Results and RM Resources expected to continue to grow revenue with strong margins
 RM Education expected to continue to improve margins with focus on software and services
 Revenue growth is expected in 2016 with all three divisions growing in 2017
 2015 year-end cash position likely to be ahead of current market expectations.
David Brooks, RM's CEO, said:
"We have delivered another good half year of results and are on track with our journey back to growth. RM Resources and RM Results have continued to grow and deliver strong margins. RM Education continues to improve margins as we focus on software and services. These results together with our strong balance sheet give us a stable platform for RM's long term future."
Contacts 
RM plc
08450 700300
David Brooks, Chief Executive Officer

Iain McIntosh, Chief Financial Officer

FTI Consulting
020 3727 1000
Chris Lane / Danny Wong 

* Throughout this statement, adjusted profit and adjusted EPS are stated before 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 amortisation of acquisition related intangible assets; the gain on sale of operations; share-based payment charges; restructuring program costs and changes in the provision for dilapidations and onerous lease contracts.
RM plc
Interim results for the 6 months ended 31 May 2015
Results

6 months to
May 2015
6 months to
May 2014

12 months to
November 2014
Revenue
79.8m
92.1m

202.5m
Adjusted* operating profit
6.9m
7.3m

18.5m
Adjusted* profit before tax
6.3m
7.0m

18.1m
Profit before tax
9.2m
6.7m

15.8m
Adjusted* diluted Earnings Per Share
5.8p
6.2p

15.4p
Diluted Earnings Per Share
8.8p
5.9p

13.0p
Ordinary dividend per share
1.20p
0.96p

4.00p
Cash and Short term deposits
43.1m
40.3m

47.9m
* Throughout this statement, adjusted profit and adjusted EPS are stated before 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 amortisation of acquisition related intangible assets; the gain on sale of operations; share-based payment charges; restructuring program costs and changes in the provision for dilapidations and onerous lease contracts.
Revenue declined 13% to 79.8m compared with 92.1m for the same period last year, with growth in the RM Results and RM Resources divisions being more than offset by the expected decline in the RM Education division following the decision to discontinue the sale of personal computing devices announced in 2013.
Adjusted* profit before tax was 6.3m (2014: 7.0m). Adjusted* operating profit was 6.9m (2014: 7.3m). Profit before tax was 9.2m (2014: 6.7m).
Operating capital efficiency remained strong. Cash generated by operations of 1.7m (2014: 6.1m) reflects a reduction in the negative working capital associated with long-term contracts and the unwinding of related cash balances. Net cash and short-term deposits at 31 May 2015 was 43.1m (2014: 40.3m at 31 May, 47.9m at 30 November). 
Adjusted* diluted earnings per share decreased by 6% to 5.8p (2014: 6.2p). Diluted earnings per share were 8.8p (2014: 5.9p).
In March terms were agreed with South Oxfordshire District Council to sub-let one of the Group's buildings in Abingdon, resulting in a reduction in the onerous lease provision held on the balance sheet by 2.4m. 
In March 2015 RM sold its equity and junior subordinated loan note interests in Newham Learning Partnership (PSP) Limited. The total consideration was 1.6m and resulted in a profit of 0.9m, recorded as adjusted investment income. 
The IAS 19 deficit relating to RM's defined benefit pension scheme has increased since 30 November 2014 to 30.0m (2014: 26.8m at 30 November), primarily due to increased liabilities arising from a reduction in market interest rates. The deficit net of deferred tax was 24.0m (2014: 21.4m at 30 November).
In the year ended 30 November 2014, Group expenditure relating to administering the defined benefit pension scheme was included in Corporate Services adjusted* profit from operations, where previously it had been included within the divisional results. The divisional results for the 6 months ended 31 May 2014 have been restated to be consistent with this treatment with 407,000 of cost allocated to Corporate Services from RM Education (346,000) and RM Results (61,000), with no impact on total adjusted profit from operations.
Dividend
Reflecting the Board's continued confidence in the business, the interim dividend per share has been increased by 25% to 1.20p (2014: 0.96p). The dividend will be payable on 11 September 2015 to shareholders on the register on 14 August 2015. 
RM Resources
The RM Resources division comprises two operating businesses: TTS and SpaceKraft. TTS, which represents over 90% of divisional revenue, is a value-added distribution business offering a wide range of curriculum products and materials to schools for both general and departmental use. SpaceKraft supplies products and installation services for the Special Educational Needs market.

6 months to
May 2015
6 months to
May 2014

12 months to
November 2014
RM Resources revenue
32.7m
29.3m 

62.8m
RM Resources adjusted* operating profit 
4.5m
3.8m

10.3m
RM Resources reported revenue growth of 11% to 32.7m (2014: 29.3m). TTS UK direct catalogue and online revenue rose 13% benefitting from strong curriculum focused propositions; International revenue grew 17% and represented 13% of TTS revenue in the period. 
Adjusted* operating margins improved further to 13.9% (2014: 13.1%).
RM Results
The RM Results division provides products and services that include secure, innovative systems for creating high-stakes exams and tests, onscreen testing, onscreen marking and the management and analysis of educational data.

6 months to
May 2015
6 months to
May 2014 (restated)

12 months to
November 2014
RM Results revenue
10.6m
10.1m

27.8m
RM Results adjusted* operating profit
1.6m
2.0m

4.6m
Revenue in this division increased by 5% to 10.6m (2014: 10.1m). Adjusted* operating profit decreased from 2.0m for the first half of 2014 to 1.6m as performance in the first half of 2014 was flattered by the cumulative impact of an improvement in the forecast lifetime profitability on an established long-term contract.
In February RM Results signed a 3-year contract to provide the education charity AQA with e-marking services alongside DRS, their existing supplier. The division has also been selected as preferred supplier to provide e-assessment services to a world leading professional membership organisation, ICAEW, an existing customer for e-marking.
RM Education
The RM Education division supplies IT Services, Internet Services, Infrastructure Solutions and Digital Platforms and Content to UK schools and colleges.

6 months to
May 2015
6 months to
May 2014 (restated)

12 months to
November 2014
RM Education revenue
36.5m
52.7m

111.9m
RM Education adjusted* operating profit 
2.6m
3.4m

7.7m
As expected divisional revenues reduced by 31% reflecting the inclusion of RM's own hardware revenues in 2014 and lower BSF activity.
The division generated an adjusted* operating profit of 2.6m (2014: 3.4m) with operating margins increasing from 6.4% to 7.0%. The division includes services subject to long-term project accounting and, as in 2014, profits were positively affected by good operational performance and cost control in completing BSF contracts.
Good progress was made in the half with respect to pursuing the division's priority areas in software and services. Positive engagement with major Multi Academy Trusts has resulted in a wide ranging framework agreement being signed with one trust and with RM Education being awarded preferred bidder status on another. 98% of maintained primary schools in Derbyshire have contracted to transfer to RM Integris, the division's cloud-based School Management Systems platform. A new internet connectivity contract was signed with West Berkshire.
Statement on 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. These risk profiles are updated at least annually. The principal risks and uncertainties detailed within the Group's 2014 Annual Report remain applicable. This is available from the RM website: www.rmplc.com.
Outlook
The RM Resources and RM Results divisions, which represented 54% of the Group's revenues and 70% of the Group's profit in the half, continue to grow organically and maintain good margins. RM Education continues to make good progress focusing on software and services and improving margins. 
Trading in the year is running in line with the Board's expectations and we are confident that the Group will return to revenue growth in 2016 with all three divisions growing by 2017. The cash position at year end is likely to be ahead of current market expectations.
Condensed Consolidated Income Statement








for the 6 months ended 31 May 2015












6 months ended 31 May 2015
6 months ended 31 May 2014
Year ended 30 November 2014


Adjusted
Adjustments
Total
Adjusted
Adjustments
Total
Adjusted
Adjustments
Total

Note
000
000
000
000
000
000
000
000
000











Revenue 

79,806
-
79,806
92,110
-
92,110
202,544
-
202,544
Cost of sales 

(47,612)
-
(47,612)
(57,037)
-
(57,037)
(126,974)
-
(126,974)











Gross profit

32,194
-
32,194
35,073
-
35,073
75,570
-
75,570











Operating expenses

(25,246)
-
(25,246)
(27,747)
-
(27,747)
(57,044)
-
(57,044)











- Amortisation of acquisition related intangible assets

-
(152)
(152)
-
(152)
(152)
-
(303)
(303)











- Gain on sale of operations

-
-
-
-
-
-
-
429
429











- Share-based payment charges

-
(385)
(385)
-
(399)
(399)
-
(932)
(932)











- Release of/(increase in) provisions for dilapidations on leased properties and onerous lease contracts

-
2,393
2,393
-
445
445
-
(774)
(774)











- Restructuring program release/(costs)

-
213
213
-
(83)
(83)
-
(472)
(472)


(25,246)
2,069
(23,177)
(27,747)
(189)
(27,936)
(57,044)
(2,052)
(59,096)











Profit from operations

6,948
2,069
9,017
7,326
(189)
7,137
18,526
(2,052)
16,474











Investment income

180
894
1,074
280
-
280
476
-
476
Finance costs

(782)
(88)
(870)
(575)
(171)
(746)
(924)
(269)
(1,193)











Profit before tax

6,346
2,875
9,221
7,031
(360)
6,671
18,078
(2,321)
15,757











Tax 
4
(1,488)
(375)
(1,863)
(1,479)
43
(1,436)
(4,359)
201
(4,158)











Profit for the period

4,858
2,500
7,358
5,552
(317)
5,235
13,719
(2,120)
11,599











Earnings per ordinary share:
5




















Basic

6.0p
3.1p
9.1p
6.4p
(0.4)p
6.0p
16.4p
(2.5)p
13.9p











Diluted

5.8p
3.0p
8.8p
6.2p
(0.3)p
5.9p
15.4p
(2.4)p
13.0p











Paid and proposed dividends per share:
6




















Interim



1.20p


0.96p


0.96p











Final



-


-


3.04p






















Adjustments to results have been presented to give a better guide to business performance (see note 1).



All amounts were derived from continuing operations.








Condensed Consolidated Statement of Comprehensive Income




for the 6 months ended 31 May 2015






6 months ended 
6 months ended 
Year ended 


31 May 2015
31 May 2014
30 November 2014


000
000
000





Profit for the period

7,358
5,235
11,599





Items that will not be reclassified subsequently to profit or loss:









Defined benefit pension scheme remeasurements

(4,553)
(2,385)
(21,892)
Tax on items that will not be reclassified subsequently to profit or loss

911
188
4,378





Items that are or may be reclassified subsequently to profit or loss:









Fair value (loss)/gain on hedged instruments

(114)
618
1,018
Exchange (loss)/gain on translation of overseas operations

(15)
53
81
Tax on items that are or may be reclassified subsequently to profit or loss

(27)
-
657





Other comprehensive expense

(3,798)
(1,526)
(15,758)





Total comprehensive income/(expense)

3,560
3,709
(4,159)
Condensed Consolidated Balance Sheet




At 31 May 2015










Note
31 May 2015
31 May 2014
30 November 2014
000
000
000
Non-current assets




Goodwill

14,067
14,067
14,067
Acquisition related intangible assets

310
612
461
Other intangible assets

553
838
537
Property, plant and equipment

7,695
8,271
8,040
Other receivables
9
1,172
1,911
1,878
Deferred tax assets

8,256
4,918
8,147


32,053
30,617
33,130
Current assets




Inventories 

12,846
11,559
10,604
Trade and other receivables 
9
24,606
32,508
32,928
Tax assets

545
107
821
Cash and short-term deposits
7
43,103
40,278
47,893


81,100
84,452
92,246





Total assets 

113,153
115,069
125,376





Current liabilities




Trade and other payables 
10
(68,888)
(75,140)
(79,085)
Tax liabilities

(780)
-
(600)
Provisions
11
(2,828)
(2,961)
(3,660)


(72,496)
(78,101)
(83,345)





Net current assets

8,604
6,351
8,901





Non-current liabilities




Other payables
10
(963)
(5,652)
(1,657)
Provisions 
11
(2,507)
(6,351)
(5,507)
Defined Benefit Pension Scheme obligation 
12
(30,016)
(8,767)
(26,753)


(33,486)
(20,770)
(33,917)





Total liabilities

(105,982)
(98,871)
(117,262)





Net assets

7,171
16,198
8,114





Equity attributable to shareholders



Share capital 

1,889
1,870
1,889
Share premium account 

27,018
26,997
27,018
Own shares 

(2,667)
(2,932)
(2,950)
Capital redemption reserve 

94
94
94
Hedging reserve

430
144
544
Translation reserve

(319)
(332)
(304)
Retained earnings - (deficit)

(19,274)
(9,643)
(18,177)
Total equity

7,171
16,198
8,114
Condensed Consolidated Statement of Changes in Equity



























for the 6 months ended 31 May 2015

Share capital
Share premium
Own shares
Capital redemption reserve
Hedging reserve
Translation reserve
Retained earnings
Total

Note
000
000
000
000
000
000
000
000










At 1 December 2014

1,889
27,018
(2,950)
94
544
(304)
(18,177)
8,114
Profit for the period

-
-
-
-
-
-
7,358
7,358
Other comprehensive expense

-
-
-
-
(114)
(15)
(3,669)
(3,798)
Total comprehensive income/(expense)

-
-
-
-
(114)
(15)
3,689
3,560
Transactions with owners of the Company:








Share-based payment awards exercised

-
-
2,592
-
-
-
(2,720)
(128)
Purchase of own shares

-
-
(2,309)
-
-
-
-
(2,309)
Share-based payment fair value charges

-
-
-
-
-
-
385
385
Ordinary dividends paid
6
-
-
-
-
-
-
(2,451)
(2,451)
At 31 May 2015

1,889
27,018
(2,667)
94
430
(319)
(19,274)
7,171





















for the 6 months ended 31 May 2014

Share capital
Share premium
Own shares
Capital redemption reserve
Hedging reserve
Translation reserve
Retained earnings
Total

Note
000
000
000
000
000
000
000
000










At 1 December 2013

1,870
26,997
(2,972)
94
(474)
(385)
3,895
29,025
Profit for the period

-
-
-
-
-
-
5,235
5,235
Other comprehensive income/(expense)

-
-
-
-
618
53
(2,197)
(1,526)
Total comprehensive income

-
-
-
-
618
53
3,038
3,709
Transactions with owners of the Company:








Share-based payment awards exercised

-
-
40
-
-
-
(40)
-
Share-based payment fair value charges

-
-
-
-
-
-
399
399
Ordinary dividends paid
6
-
-
-
-
-
-
(2,257)
(2,257)
Special dividends paid
6
-
-
-
-
-
-
(14,678)
(14,678)
At 31 May 2014

1,870
26,997
(2,932)
94
144
(332)
(9,643)
16,198

















for the year ended 30 November 2014

Share capital
Share premium
Own shares
Capital redemption reserve
Hedging reserve
Translation reserve
Retained earnings
Total

Note
000
000
000
000
000
000
000
000










At 1 December 2013

1,870
26,997
(2,972)
94
(474)
(385)
3,895
29,025
Profit for the year

-
-
-
-
-
-
11,599
11,599
Other comprehensive income/(expense)

-
-
-
-
1,018
81
(16,857)
(15,758)
Total comprehensive income/(expense)

-
-
-
-
1,018
81
(5,258)
(4,159)
Transactions with owners of the Company:








Shares issued

19
21
(18)
-
-
-
-
22
Share-based payment awards exercised

-
-
40
-
-
-
(40)
-
Share-based payment fair value charges

-
-
-
-
-
-
932
932
Ordinary dividends paid
6
-
-
-
-
-
-
(3,028)
(3,028)
Special dividends paid
6
-
-
-
-
-
-
(14,678)
(14,678)
At 30 November 2014

1,889
27,018
(2,950)
94
544
(304)
(18,177)
8,114
Condensed Consolidated Cash Flow Statement




for the 6 months ended 31 May 2015











6 months ended 
6 months ended 
Year ended 


31 May 2015
31 May 2014
30 November 2014

Note
000
000
000





Profit before tax

9,221
6,671
15,757
Investment income

(1,074)
(280)
(476)
Finance costs

870
746
1,193
Profit from operations

9,017
7,137
16,474
Adjustments for:




Amortisation of acquisition related intangible assets

152
152
303
Amortisation of other intangible assets

154
188
417
Depreciation and impairment of property, plant and equipment

1,138
1,475
3,415
Gain on sale of operations

-
-
(429)
Loss on disposal of other intangible assets

-
-
73
Gain on disposal of property, plant and equipment

(75)
(199)
(398)
Loss/(gain) on foreign exchange derivatives

134
(106)
(83)
Share-based payment charge

385
399
932
(Decrease)/increase in provisions
11
(2,258)
(391)
1,339
Defined Benefit Pension Scheme administration cost
12
205
159
475
Operating cash flows before movements in working capital

8,852
8,814
22,518
Increase in inventories

(2,242)
(1,010)
(55)
Decrease in receivables

7,594
2,506
2,792
Decrease in payables:




- decrease in trade and other payables

(10,805)
(328)
(708)
- utilisation of onerous lease and dilapidations provisions
11
(959)
(550)
(836)
- utilisation of employee-related restructuring provisions
11
(599)
(3,112)
(4,348)
- utilisation of other provisions
11
(105)
(262)
(289)
Cash generated by operations

1,736
6,058
19,074
Defined Benefit Pension Scheme cash contributions:




- deficit catch-up payments and Scheme expenses
12
(1,992)
(1,861)
(3,821)
- pension escrow account
12
-
(8,000)
(8,000)
Tax paid

(632)
(1,311)
(2,527)
Borrowing facilities arrangement and commitment fees

(183)
(263)
(353)
Income on sale of finance lease debt

-
54
55
Net cash (outflow)/inflow from operating activities

(1,071)
(5,323)
4,428





Investing activities




Interest received

163
163
403
Repayment of loans by third parties

14
-
33
Proceeds from sale of other receivables

1,586
-
-
Proceeds on disposal of property, plant and equipment

122
380
661
Purchases of property, plant and equipment

(370)
(813)
(2,597)
Purchases of other intangible assets

(170)
-
(1)
Net cash generated by/(used in) investing activities

1,345
(270)
(1,501)
Financing activities




Ordinary dividends paid
6
(2,451)
(2,257)
(3,028)
Special dividend paid
6
-
(14,678)
(14,678)
Repayment of capital obligations under vehicle finance leases

(177)
(342)
(530)
Proceeds of share capital issue, net of share issue costs

-
-
22
Purchase of own shares

(2,309)
-
-
Satisfaction of share-based payment awards

(128)
-
-
Net cash used in financing activities

(5,065)
(17,277)
(18,214)
Net decrease in cash and cash equivalents

(4,791)
(22,870)
(15,287)
Cash and cash equivalents at the beginning of the period

41,893
57,169
57,169
Effect of foreign exchange rate changes

1
(21)
11
Cash and cash equivalents at the end of period
7
37,103
34,278
41,893
Notes to the Condensed Interim Financial Statements
1. General information
RM plc ('Company') is incorporated in the United Kingdom and listed on the London Stock Exchange. The unaudited Condensed Consolidated Interim Financial Statements as at 31 May 2015 and for the 6 months then ended comprise those of the Company and its subsidiaries (together 'the Group').
Condensed 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 the following 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 amortisation of acquisition related intangible assets; the gain on sale of operations; share-based payment charges; restructuring program costs; and changes in the provisions for dilapidations and onerous lease contracts. The columns extend down the Income Statement to allow the tax and earnings per share impacts of these transactions to be disclosed. Equivalent material 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
During the 6 months ended 31 May 2015 adjustments to profit include:
 In March 2015 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.
 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 has been released from the onerous lease provision in the period.
2. Accounting policies
This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority (FCA), the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published Consolidated Financial Statements for the year ended 30 November 2014.
The preparation of the Condensed Consolidated Interim 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 Interim 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.
In preparing these Condensed Consolidated Interim Financial Statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements as at and for the year ended 30 November 2014.
Going concern 
The Directors, having made appropriate enquiries, consider that the Group have adequate resources to continue in operational existence for the foreseeable future and that therefore it is appropriate to adopt the going concern basis in preparing the Interim Financial Statements.
3. Segmental results






The Group's business is supplying products, services and solutions to the UK and international education markets.
The Group is structured into three operating divisions: RM Resources, RM Results and RM Education. 
This Segmental analysis shows the result and assets of these divisions. Revenue is that earned by the Group from third parties.




RM
RM
RM
Corporate
Total 
6 months ended 31 May 2015

Resources
Results 
Education
Services


000
000
000
000
000
Revenue

32,650
10,640
36,516
-
79,806
Adjusted profit from operations

4,523
1,610
2,571
(1,756)
6,948
Adjusted investment income





180
Adjusted finance costs





(782)
Adjusted profit before tax





6,346
Adjustments (see note 1)





2,875
Profit before tax





9,221









RM
RM
RM
Corporate
Total 
6 months ended 31 May 2014 (restated)

Resources
Results (restated)
Education (restated)
Services (restated)


000
000
000
000
000














Revenue

29,329 
10,115 
52,666 
- 
92,110 
Adjusted profit from operations (restated)

3,828 
2,019 
3,367 
(1,888)
7,326 
Investment income





280 
Adjusted finance costs





(575)
Adjusted profit before tax





7,031 
Adjustments (see note 1)





(360)
Profit before tax





6,671 
















RM
RM
RM
Corporate
Total 
Year ended 30 November 2014

Resources
Results 
Education
Services


000
000
000
000
000







Revenue

62,804 
27,827 
111,913 
- 
202,544 
Adjusted profit from operations

10,330 
4,648 
7,700 
(4,152)
18,526 
Investment income





476 
Adjusted finance costs





(924)
Adjusted profit before tax





18,078 
Adjustments (see note 1)





(2,321)
Profit before tax





15,757 







In the year ended 30 November 2014, Group expenditure relating to administering the Defined Benefit Pension Scheme was included in Corporate Services adjusted profit from operations, where previously it had been included within the divisional results. The divisional results for the 6 months ended 31 May 2014 have been restated to be consistent with this treatment with 407,000 of cost allocated to Corporate Services from RM Education (346,000) and RM Results (61,000), with no impact on total adjusted profit from operations.
Segmental assets








RM
RM
RM
Corporate
Total 


Resources
Results 
Education
Services
At 31 May 2015

000
000
000
000
000







Segmental

35,969 
6,067 
17,422 
409 
59,867 
Other





53,286 
Total assets





113,153 









RM
RM
RM
Corporate
Total 


Resources
Results 
Education
Services
At 31 May 2014

000
000
000
000
000







Segmental

33,796 
7,040 
28,312 
164 
69,312 
Other





45,757 
Total assets





115,069 









RM
RM
RM
Corporate
Total 


Resources
Results 
Education
Services
At 30 November 2014

000 
000 
000 
000 
000 







Segmental

33,970 
6,636 
27,334 
353 
68,293 
Other
 
57,083 
Total assets





125,376 







Other non-segmented assets includes tax assets, cash and short-term deposits and other non division-specific assets.
4. Tax










Corporation tax for the interim period is charged at the expected effective tax rate for the financial year ending 30 November 2015, based upon adjusted profit as explained within note 1. The charge incorporates both current and deferred taxation:













6 months ended 31 May 2015
6 months ended 31 May 2014
Year ended 30 November 2014


Adjusted
Adjustments
Total
Adjusted
Adjustments
Total
Adjusted
Adjustments
Total


000
000
000
000
000
000
000
000
000











Profit before tax

6,346
2,875
9,221
7,031
(360)
6,671
18,078
(2,321)
15,757
Tax charge

(1,488)
(375)
(1,863)
(1,479)
43
(1,436)
(4,359)
201
(4,158)











Effective tax rate

23.4%
13.0%
20.2%
21.0%
11.9%
21.5%
24.1%
8.7%
26.4%
5. Earnings per ordinary share




















6 months ended 31 May 2015
6 months ended 31 May 2014
Year ended 30 November 2014

Profit after tax
Weighted average number of shares
Pence 
per share
Profit 
after tax
Weighted average number of shares
Pence 
per share
Profit 
after tax
Weighted average number of shares
Pence per share

000
000
000
000
000
000
Basic earnings per ordinary share:









Basic earnings
7,358
80,913
9.1
5,235
87,167
6.0
11,599
83,702
13.9
Adjustments (see note 1)
(2,500)
-
(3.1)
317
-
0.4
2,120
-
2.5
Adjusted basic earnings 
4,858
80,913
6.0
5,552
87,167
6.4
13,719
83,702
16.4










Diluted earnings per ordinary share:









Basic earnings
7,358
80,913
9.1
5,235
87,167
6.0
11,599
83,702
13.9
Effect of dilutive potential ordinary shares: share-based payment awards
-
3,010
(0.3)
-
2,149
(0.1)
-
5,346
(0.9)
Diluted earnings per ordinary share
7,358
83,923
8.8
5,235
89,316
5.9
11,599
89,048
13.0
Adjustments (see note 1)
(2,500)
-
(3.0)
317
-
0.3
2,120
-
2.4
Adjusted diluted earnings
4,858
83,923
5.8
5,552
89,316
6.2
13,719
89,048
15.4
6. Dividends



Amounts recognised as distributions to equity holders were:




6 months ended
6 months ended
Year ended

31 May 2015
31 May 2014
30 November 2014

000
000
000




Final dividend for the year ended 30 November 2014 - 3.04p per share (2013: 2.46p)
2,451
2,257
2,257




Interim dividend for the year ended 30 November 2014 - 0.96p per share
-
-
771




Special dividend for the year ended 30 November 2013 - 16.00p per share
-
14,678
14,678 

2,451
16,935
17,706
The proposed interim dividend of 1.20p per share was approved by the Board on 3 July 2015. The anticipated cost of 974,000 has not be included as a liability at 31 May 2015.
7. Cash and short-term deposits











31 May 2015
31 May 2014
30 November 2014


000
000
000
Cash and cash equivalents

37,103
34,278
41,893
Short-term deposits

6,000
6,000
6,000
Cash and short-term deposits

43,103
40,278
47,893
8. Long-term contracts











31 May 2015
31 May 2014
30 November 2014

Note
000
000
000
Amounts due from contract customers included in trade and other receivables
9 
83
1,133
154
Amounts due to contract customers included in trade and other payables
10 
(29,245)
(32,767)
(31,320)


(29,162)
(31,634)
(31,166)
9. Trade and other receivables








31 May 2015
31 May 2014
30 November 2014

000
000
000
Current



Financial assets



Trade receivables
17,264
23,861
24,830
Long-term contract balances 
83
1,133
154
Other receivables
826
398
743
Derivative financial instruments
340
270
565
Accrued income
2,155
1,602
1,571

20,668
27,264
27,863
Non-financial assets



Prepayments
3,938
5,244
5,065

24,606
32,508
32,928




Non-current



Financial assets



Other receivables
1,172
1,911
1,878
10. Trade and other payables








31 May 2015
31 May 2014
30 November 2014
000
000
000
Current



Financial liabilities



Trade payables
9,748
9,344
12,793
Other taxation and social security
4,059
3,451
4,673
Other payables
1,053
2,507
2,066
Derivative financial instruments
26
86
3
Accruals
12,507
14,567
14,041
Obligations under finance leases
106
297
230
Long-term contract balances 
29,245
32,767
31,320

56,744
63,019
65,126
Non-financial liabilities



Deferred income
12,144
12,121
13,959

68,888
75,140
79,085




Non-current



Financial liabilities



Obligations under finance leases
-
162
49




Non-financial liabilities



Deferred income:



- due after one year but within two years
667
3,578
1,077
- due after two years but within five years
296
1,912
531

963
5,652
1,657
11. Provisions










Onerous lease
and dilapidations
Employee-related restructuring
Other 
Total 

000 
000 
000 
000 





At 1 December 2014
8,094 
365 
708 
9,167 
Utilisation of provisions
(959)
(599)
(105)
(1,663)
Release of provisions
(2,393)
(85)
(99)
(2,577)
Increase in provisions
- 
319 
- 
319 
Effect of movements in foreign exchange rates
- 
- 
1 
1 
Unwind of discount
88 
- 
- 
88 
At 31 May 2015
4,830 
- 
505 
5,335 
12. Defined Benefit Pension scheme
In the half-years ended 31 May 2015 and 31 May 2014 the financial position of the Group's Defined Benefit Pension Scheme has been rolled forward from the respective prior year end. The roll forward includes updating for actual investment returns for the periods; market derived discount rates on liabilities; and market derived inflation assumptions. Mortality assumptions have been held in line with those applied at 30 November of the preceding financial year.
The last triennial valuation at 31 May 2012 was used as the basis for the 30 November 2014 IAS 19 valuation and the roll-forward to 31 May 2015. 
As at 31 May 2012, the triennial valuation for statutory funding purposes showed a deficit of 53.5m (31 May 2009: 16.6m). The Group agreed with the Scheme Trustees to repay this amount via deficit catch up payments of 4.0m per annum until 31 May 2013 and thereafter at 3.6m per annum until 31 May 2027. In addition the Group pays the administration costs of the scheme including the Payment Protection Fund levy. In the half-year to 31 May 2015 total payments of 2.0m were made under this arrangement.
The Scheme is closed to future accrual of benefits.
In 2014 the Board and Scheme Trustee agreed a further 8.0m contribution the form of use of which within the Scheme is required to be agreed by the Board and the Scheme Trustee. As at 31 May 2015 3.3m remained unutilised in an escrow account and has been included within the calculation of the Scheme assets under IAS 19.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. 
PricewaterhouseCoopers LLP
The Group uses PricewaterhouseCoopers LLP to provide certain consultancy and assurance services, but excluding external audit services. RM Board Director Iain McIntosh's wife is an equity partner in PricewaterhouseCoopers. She has not been involved in any services provided to the Group.
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.
Responsibility statement of the directors in respect of the interim financial statements
We confirm that to the best of our knowledge:
 the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
 the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first 6 months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining 6 months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first 6 months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
 
By order of the Board,
Iain McIntosh
Chief Financial Officer
6 July 2015




INDEPENDENT REVIEW REPORT TO RM PLC 
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 May 2015 which comprises the Condensed Consolidated Income Statement, Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance Sheet, Condensed Consolidated Cash Flow Statement, Condensed Consolidated Statement of Changes in Equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 May 2015 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Tudor Aw
For and on behalf of KPMG LLP
Chartered Accountants
Arlington Business Park, Theale
Reading RG7 4SD 
6 July 2015

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