REG - RM PLC - Interim Results <Origin Href="QuoteRef">RM.L</Origin> - Part 2
16/07/2015 14:08
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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 Employee-related restructuring Other Total
and dilapidations
£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 McIntoshChief Financial Officer6 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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