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

RMAnnouncement

01/02/2016 07:10

RNS Number : 5242N
RM PLC
01 February 2016
1 February 2016
RMplc
Preliminary Results for the period ending 30 November 2015
RM plc ("RM"), the leading educational IT and resources group, reports its results for the year ending 30 November 2015. 
HIGHLIGHTS
Financial
2015
2014
Change
Revenue
RM Resources
RM Results
RM Education
Adjusted* operating profit
Adjusted* operating profit margins
178.2m
63.5m
30.7m
80.2m
18.2m
10.2%
202.5m
59.1m
27.8m
111.9m
18.5m
9.1%
-12.0%
+7.6%
+10.4%
-28.3%
-1.8%
+1.1pp
Adjusted* basic EPS
Basic EPS
Paid and proposed dividend per share
16.2p
18.5p
5.00p
16.4p
13.9p
4.00p
-1%
+33%
+25%
Operational
 Strong organic growth in RM Resources and RM Results
 RM Education stabilised with satisfactory margins
 Adjusted* operating margins continue to improve moving from 9.1% to 10.2%
 Cash remains strong at 48.3m
 Disposal of SpaceKraft, the small specialist manufacturing and distribution business
 Pension triennial valuation agreed with recovery plan reduced to 9 years
Commenting on the results, David Brooks, Chief Executive of RM, said:
"2015 was another good year of progress for the Group. Both RM Resources and RM Results grew organically and RM Education has been reshaped and is now on a stable platform for the future. The Group's profit margins reaching double digits is a positive milestone.
Market conditions in the UK Education sector will continue to be subdued as a result of increased pressure on school budgets. Our strategy continuesto focus on retaining a leading market position for all three businesses whilst maintaining our stronger operating margins."
* Adjusted operating profit is before the amortisation of acquisition related intangible assets; impairment of held for sale assets and related transition costs; the gain/(loss) on sale of operations; share-based payment charges; restructuring provision movements; changes in the provision for dilapidations and onerous lease contracts and exceptional credit on Defined Benefit Pension Scheme.
Contacts 
RM plc
FTI Consulting
08450 700300
David Brooks, Chief Executive Officer
Chris Lane / Antonia Gray 
Neil Martin, Chief Financial Officer
08450 700300
020 3727 1000
Extract from Strategic Report
RM's objective is to create shareholder value through the provision of education resources, IT software and IT services to the education sector. 
Operating Review
The Group is structured in three operating divisions, each with its own managing director and management team. Some staff functions are provided centrally. Approximately 33% (2014: 28%) of Group headcount is based in India, providing support services and software development to the operating divisions.
RM Resources
The RM Resources Division consists of the operating business TTS. In December 2015 we divested our small special educational needs business, SpaceKraft, for 0.8m which is separately identified as Held for Sale as at 30 November 2015. This enables the RM Resources management team to focus on the much larger TTS operation and exit from manufacturing activities that were required as part of the SpaceKraft business model.
TTS provides education resources used in schools through a mainly direct marketing business model with goods supplied from large, centralised UK distribution centres. Products supplied are a mix of third party branded and TTS branded items manufactured by a network of third party suppliers.
The Division's strategy is to grow market share in the provision of resources to UK schools, early years and special educational needs markets via direct catalogue and online sales. TTS also supplies a subset of these products through UK and international distributors as well as directly to international schools.
Divisional revenue increased by 7.6% to 63.5 million (2014: 59.1 million), with UK market share gains and a 31.6% increase in international revenues. Divisional revenue increased by 12.2% in the first six months but only by 3.7% in the second half of the year as first half sales benefited from the curriculum changes that drove strong sales of new products.
Divisional adjusted operating margins remained consistent at 17.5% reflecting the benefits of continued growth and strong control over costs. Adjusted operating profit was 11.1 million (2014: 10.3 million). 
TTS UK Direct Marketing
Revenue from TTS UK direct marketing increased by 4.0% to 48.3 million (2014: 46.4 million). The first half of the year was very strong, showing 11.9% year on year increase, with the last effects of the uplift supported by changes to the curriculum in English primary schools. However, in the second half revenue in this area decreased by 2.9% reflecting the tighter budgets within schools.
We continue to make significant investment in TTS' online channel. Online orders now make up 30% of direct marketing sales and a completely new e-commerce platform will be released this year. 
We expect the UK education resources market to continue to be subdued as a result of increased pressure on the discretionary element of school budgets. Our focus will be on maintaining sector leading margins while looking to retain our strong market position.
TTS International
Revenue from international sales to overseas resellers and to international schools increased by 31.6% to 11.1 million (2014: 8.5 million). This was driven by growth in Europe and the Americas and included a large contract in the Middle East. We expect international revenues to continue to grow in the coming year.
TTS UK Distributors
Revenue from sales to UK trade partners decreased by 1.5% to 4.1 million (2014: 4.2 million), reflecting the tightness of budgets in the wider UK education resources marketplace. 
RM Results
The RM Results business provides IT software and services to enable onscreen exam marking (e-marking), onscreen testing (e-testing) and the management and analysis of educational data. Its customers include government ministries, exam boards and professional awarding bodies in the UK and around the world.
The strategy is to primarily grow the e-assessment side of the business through expanding the scope of solutions to existing customers through the provision of leading software products and services and to win new customers in both the UK and overseas markets. Software and services are provided through a combination of proprietary and third party, in-house and outsourced arrangements. Internationally the business is expected to develop through partnerships and software licensing rather than as a service based activity.
Revenue increased by 10.4% to 30.7 million (2014: 27.8 million). Adjusted operating margins increased further to 18.1% (2014: 16.7%). Adjusted operating profit increased by 19.5% on the prior year to 5.6 million (2014: 4.6 million).
During the year the business was successful in securing a three year contract with the education charity, AQA, the largest UK schools exam awarding body, to provide e-marking services alongside the current provider.
Internationally, the business is pursuing opportunities for the onscreen marking of paper-based exams as well as onscreen testing, often bidding with partner organisations. In the UK, examination and curricula changes introduced by the English Department for Education have significantly changed the phasing of exams so that the vast majority are taken in the summer term, which has moved revenue phasing into the second half of the year. There is a long-term trend from paper-based to onscreen testing in the e-assessment market, though the adoption of such systems for school based examinations is low.
The educational data side of the business is heavily dependent on the Department for Education, principally through the National Pupil Database and RAISE Online contracts. These contracts include the capture and publishing of data for the school performance tables in England and both are up for retender in the next twelve months. However, we have successfully managed these contracts for over 10 years. We are in the process of exiting a number of other smaller data services, non-profit making contracts.
We are targeting the growth opportunities in e-assessment to more than outweigh reduced revenues in the educational data business, thereby allowing us to maintain good operating margins.
RM Education
RM Education is a UK focused business supplying IT software and services to schools and colleges. 
The Division's strategy is to return to sustainable top line growth by developing the adoption of its portfolio of software products and services to existing and new UK school and college customers.
Market trends affecting the business include the demand from schools for solutions which are low-cost yet can cope with an increasingly diverse range of hardware and software. In addition, purchasing decisions in England have been increasingly devolved to schools and academy groups and away from central government and local authorities. This has required a change in the way the Division engages with its market and has resulted in an increased focus on the top c.2,000 customers. 
As anticipated, the change of strategy away from selling hardware devices and a reduction in new school openings under the Building Schools for the Future (BSF) scheme led to overall revenue in RM Education declining by 28.3% to 80.2 million (2014: 111.9 million). However, adjusted operating profit margins remained stable at 6.8% (2014: 6.9%) Adjusted operating profit was 5.5 million (2014: 7.7 million).
Managed Services
The Managed Services offering is primarily the provision of full IT outsourcing services to schools and colleges. As anticipated, revenues in 2015 again declined with a reduction in new school openings under the BSF programme. Managed Services revenues decreased by 35.5% to 32.2 million (2014: 50.0 million). However, the retention rates of existing customers increased significantly during the year to over 80%. In addition, 44 new schools signed managed services contracts in the year. 
A proportion of our managed service contracts are subject to long-term project accounting policies, in particular those relating to BSF. Consequently, as these contracts progress towards completion, profits continue to benefit from the effects of good operational performance and cost control. 
Digital Platforms 
These include established products such as RM Integris (RM's cloud-based school management system), RM Easimaths curriculum software and RM EasiTeach whole class teaching software as well as newer offerings including RM Unify. Digital Platforms revenues increased by 1.4% to 7.7 million (2014: 7.6 million).
Revenue from RM Integris increased following good market share gains including over 350 schools in Derbyshire. The strategy is to increase RM's market share by focussing on its cloud-based platform, competitive price point and investing to develop its relevance across primary, secondary and multi academy school customers in a market currently dominated by a large competitor and with low levels of switching between suppliers. 
 
RM Unify is a technology platform to allow customers easy access to the varied digital, cloud-based, educational specific content and materials that are now available online. During the year the Scottish government chose to extend its contract (providing RM Unify to all schools in Scotland) by another two years to January 2018. 
Going forward the priority areas of focus are on winning new RM Integris primary, secondary and multi academy school customers and on progressing the RM Unify proposition and profile through embedding and expanding system usage amongst existing customers.
Infrastructure
Infrastructure includes the tools, products and services to help schools manage their own IT. RM Education's internet business is also included as well as the provision of third party hardware that allows RM to meet all the ICT needs of its customers. Revenues decreased by 25.8% to 40.3 million (2014: 54.3 million) as we continue the transition from manufacturing our own PC client devices and associated warranties and installations and move to a more technology agnostic services and support provider.
On the support and network tools side the focus is on ensuring that existing customers renew their support contracts and are on the latest version of our software. 
RM is an internet broadband and e-safety service provider to approximately 5,000 schools. RM designs and manages networks, procuring and integrating bandwidth and provides its own and third party e-safety products. This business is underpinned by one large regional consortium which accounts for a large share of its revenue. The contract runs until 2018 though volumes are variable. The priority in this area is on growing customer numbers and improving retention rates.
RM no longer manufactures computers. However, some customers do still want RM to provide all their ICT needs, including PC client devices. RM therefore sources third party hardware which is shipped directly to customer sites when required. This is a low margin activity but is seen to be supportive of the broader relationship with our customers which is a critical success factor in being an infrastructure partner of choice to schools.
RM India
As at 30 November 2015, RM's operation in Trivandrum accounted for 33% of Group headcount (2014: 28%).
The Indian operation provides services solely to RM Group companies. Activities include software development, customer and operational support and back office shared service support (e.g. customer order entry, IT, finance and HR) and administration.
Employees
Average Group headcount for the year was 1,860 (2014: 1,870) which is comprised of 1,645 (2014: 1,640) permanent and 215 (2014: 230) temporary or contract staff, of which 1,294 (2014: 1,360) were located in the UK and 566 (2014: 510) in India. At 30 November 2015 headcount was 1,899 (2014: 1,778). 
The following table sets out a more detailed summary of the permanent staff employed as at 30 November 2015:
Male
Female
Directors
2 (100%)
0 (0%)
Senior Managers (excluding Directors)
54 (81%)
13 (19%)
All employees
1,113 (66%)
583 (34%)
The Group is committed to offering equal employment opportunities and its policies are designed to attract, retain and motivate the best staff regardless of gender, sexual orientation, race, religion, age or disability. The Group gives proper consideration to applications for employment when these are received from disabled persons and will employ them in posts whenever suitable vacancies arise. Employees who become disabled are retained whenever possible through retraining, use of appropriate technology and making available suitable alternative employment.
The Group encourages the participation of all employees in the operation and development of the business and has a policy of regular communications. The Group incentivises employees and senior management through the payment of bonuses linked to performance objectives, together with the other components of remuneration detailed in the Remuneration Report.
The Group has a wide range of other written policies, designed to ensure that it operates in a legal and ethical manner. These include policies related to health and safety, 'whistle blowing', anti-bribery and corruption, business gifts, grievance, career planning, parental leave, systems and network security. All of RM's employment policies are published internally.
Group Financial Performance
Group revenue declined by 12.0% to 178.2 million (2014: 202.5 million) as anticipated.
To provide a better understanding of underlying business performance, amortisation charges relating to acquisition related intangible assets, share-based payment charges and other items of an exceptional nature have been disclosed in an adjustments column in the Income Statement to give 'Adjusted' results.
Adjusted operating profit margins increased again this year from 9.1% in 2014 to 10.2%. Despite the decline in revenue, adjusted operating profit decreased only marginally to 18.2 million (2014: 18.5 million). On a statutory basis, operating profit was 19.6 million (2014: 16.5 million) with adjustments principally benefiting from a release of a 2.4 million provision for dilapidations on leased properties and onerous lease contracts more than offsetting the share based payments charge of 0.9 million.
The Group generated an increased unadjusted statutory profit before tax of 19.2 million (2014: 15.8 million). 
The total tax charge within the Income Statement for the year was 4.3 million (2014: 4.2 million). The Group's tax charge for the period, measured as a percentage of profit before tax, was 22% (2014: 26%). The decrease is principally due to the reduction in the UK corporate tax rate and an adjustment on finalisation of a prior year corporation tax return. Adjusted basic earnings per share were 16.2 pence (2014: 16.4 pence). Statutory basic earnings per share were 18.5 pence (2014: 13.9 pence) and statutory diluted earnings per share were 17.8 pence (2014: 13.0 pence).
RM generated cash from operations for the year of 10.9 million (2014: 19.1 million). Cash and short-term deposits increased to 48.3 million (2014: 47.9 million). The lowest cash and short-term deposit position during the year due to seasonal cash flows was 34.0 million (2014: 25.9 million).
Cash generated from operations is expected to continue to be less than operating profit in the year ahead, reflecting the reversal of a favourable working capital position related to long-term contracts.
Dividends
The total dividend paid and proposed for the year has been increased by 25% to 5.00 pence per share (2014: 4.00 pence). This comprises an already paid interim dividend of 1.20 pence per share and, subject to shareholder approval, a proposed final dividend of 3.80 pence per share. The estimated total cost of normal dividends paid and proposed for 2015 is 4.1 million (2014: 3.2 million). This increased dividend proposal reduces the dividend cover ratio from 4.1 to 3.2.
Defined Benefit Pension Scheme
At 30 November 2015 the IAS 19 scheme deficit (pre-tax) was 21.9 million (2014: 26.8 million). This reduction in Scheme deficit results from the reduction in liabilities due to beneficial membership experience over the three year valuation period ended May 2015, better than assumed returns on the Scheme assets and the shortfall contributions paid by the Company. These have been partially offset by the change in the mortality assumptions and a reduction in the inflation risk premium.
On 11 December 2015, agreement was reached with the Trustee of the RM defined benefit pension scheme ("Scheme") with regards to the triennial valuation as at 31 May 2015.The deficit was agreed at 41.8 million (31 May 2012: 53.5 million). The deficit recovery plan comprises an initial cash contribution of 4.0 million into the Scheme and 4.0 million into the escrow account previously established for the purposes of further risk mitigation exercises, together with deficit recovery payments remaining at 3.6 million per annum until 2024 (previously 2027). These funding plans will be assessed at future triennial reviews.
Going Concern
The Directors, having made appropriate enquiries, consider that the Company and 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 financial statements.
Financial Viability Statement
In accordance with the UK Corporate Governance code, in addition to an assessment of going concern, the Directors have also considered the prospects of the Company over a longer time period. The period of assessment chosen is three years, which is consistent with the time over which the Company's medium-term financial plans are prepared. These financial plans include Income Statements, Balance Sheets and Cash Flow Statements. They have been assessed by the Board in conjunction with the principal risks of the Company, which are documented within the Principal Risks and Uncertainties section below, along with their mitigating actions.
The Board considers that the principal risks which have the potential to threaten the Company's business models, future performance, solvency or liquidity over the three year period are:
1. Public policy risk - UK education policy priority changes or restrictions in government funding due to fiscal policy
2. Operational execution - including:
a. RM Results operational performance over peak examination marking periods
b. Significantly increased working capital requirements within the RM Education and RM Results long-term contract portfolios and requirements in evolving RM Education business models
c. major adverse performance in a key contract or product which results in negative publicity and which damages the Group's brand
3. Business continuity - an event impacting the Group's major buildings, systems or infrastructure components. This would include a major incident at TTS' warehouse
4. Strategic risks - loss of a significant contract which underpins an element of a Division's activity 
5. Defined Benefit Pension Scheme - funding of the Scheme deficit in adverse market conditions 
Having assessed the above risks, singularly and in combination, and via sensitivity analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three year period of assessment and are not aware of any reason that viability would be an issue for the foreseeable period after this.
Environmental Matters
The Group's impact on the environment, and its policy in relation to such matters, are noted in the Directors' Report.
Principal Risks and Uncertainties
The management of the business and the execution of the Group's strategy are subject to a number of risks. Risks are reviewed by the Audit Committee and Board. The Board confirms that it has carried out a robust assessment of the principal risks facing the Company and appropriate processes have been put in place to monitor and mitigate them, further details of which are given in the Corporate Governance Report. The key business risks for the Group are set out in the table below.
Risk
Description
Mitigation
Public policy
The majority of RM's business is funded from UK government sources. Changes in political administration, or changes in policy priorities, might result in a reduction in education spending.
UK government funding in the education sector is constrained by fiscal policy.
Global economic conditions might result in a reduction in budgets available for public spending generally and education spending specifically.
The Group seeks to understand the education policy environment by regular monitoring of policy positions and by building relationships with education policy makers.
The Group's three Divisions have diverse revenue streams and product/service offerings.
The Group's strategy is to focus on areas of education spend which are important to meet customers' objectives. Where an individual business' revenues are in decline, management seek to ensure that the cost base supporting these is adjusted accordingly.
Education practice
Education practices and priorities may change and, as a result, RM's products and services may no longer meet customer requirements.
The Group seeks to maintain knowledge of current education practice and priorities by maintaining close relationships with customers.
Operational execution
RM provides sophisticated products and services, which require a high level of technical expertise to develop and support, and on which its customers place a high level of reliance.
RM is engaged in the delivery of large, multi-year education projects, typically involving the development and integration of complex ICT systems, and may have liability for failure to deliver on time.
The Group invests in maintaining a high level of technical expertise. 
Internal management control processes are in place to govern the delivery of projects, including regular reviews by relevant management. The operational and financial performance of projects, including future obligations, the expected costs of these and potential risks are regularly monitored by management.
Data and business continuity
RM is engaged in storing and processing sensitive data, where accuracy, privacy and security are important.
The Group would be significantly impacted if, as a result of a major incident, one of its major buildings, systems or infrastructure components could not function for a long period of time.
The Group's IS function has invested in developing its Data Centres, and has been successfully certified to ISO/IEC 27001:2005 for the provision of systems, information and hosting services.
The Group has established a Security and Business Continuity Committee to oversee the security aspects of the Group's information systems. This covers data integrity and protection, defence against external threats (including cyber risks) and disaster recovery.
The Group seeks to protect itself against the consequences of a major incident by implementing a series of back up and safety measures.
The Group has property and business interruption insurance cover.
People
RM's business depends on highly skilled employees.
The Group seeks to be an attractive employer and regularly monitors the engagement of its employees. The Group has talent management and career planning programmes.
Innovation
The IT market is subject to rapid, and often unpredictable, change. As a result of inappropriate technology choices, the Group's products and services might become unattractive to its customer base.
The Group's continued success depends on developing and/or sourcing a stream of innovative and effective products for the education market and marketing these effectively to customers.
The Group monitors technology and market developments and invests to keep its existing products, services and sales methods up-to-date as well as seeking out new opportunities and initiatives. 
The Group works with teachers and educators to understand opportunities and requirements.
Dependence on key contracts
The performance of the RM Education and RM Results Divisions are dependent on the winning and extension of long-term contracts with government,
local authorities, examination boards and commercial customers.
The Group invests in maintaining a high level of technical expertise and on building effective working relationships with its customers. The Group has in place a range of customer satisfaction programmes, which include management processes designed to address the causes of customers' dissatisfaction.
Pension
The Group operates a defined benefit pension scheme in the UK, which is in deficit. The scheme deficit can adversely impact the net assets position of the trading subsidiary RM Education Ltd.
The Scheme was closed to new entrants in 2003 and closed to future accrual of benefits in October 2012.
A pension escrow account was established in 2014 to fund risk mitigation exercises. The first of these was completed in October 2014 with the purchase a pensioner buy-in from an insurance company and a flexible retirement option exercise is currently in progress.
The Group evaluates risk mitigation proposals with the Scheme trustee.
Financial - liquidity 
The Group is exposed to counterparty risk on liquid assets.
Limits are placed on the level of deposit with any one counterparty. Bank selection takes into account credit ratings.
Financial - capital
The Group's ability to pay dividends to shareholders depends on having sufficient distributable reserves in the holding company, RM plc. Additional losses incurred as a result of significant increases in the pension scheme deficit could further impair the ability of RM Education Ltd to pay dividends up to RM plc.
The Group monitors the level of distributable reserves in subsidiary companies and considers their ability to make dividend payments to the holding company.
David Brooks
Chief Executive Officer
1 February 2016
Directors' responsibilities statement
The responsibility statement below has been prepared in connection with the Company's full Annual Report and Accounts for the year ended 30 November 2015. Certain parts are not included within this announcement.
Each of the Directors, whose names and functions are listed at the front of the Annual Report, confirm that, to the best of their knowledge:
 the Group financial statements, which have been prepared in accordance with IFRSs, as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
 the information contained in the Strategic Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
The responsibility statement was approved by the Board of Directors on 1 February 2016 and is signed on its behalf by:
Greg Davidson
Company Secretary
CONSOLIDATED INCOME STATEMENT
for the year ended 30 November 2015
Year ended 30 November 2015
Year ended 30 November 2014
Adjusted
Adjustments Total
Adjusted
Adjustments Total
Note
000 
000 
000 
000 
000 
000 
Revenue
2 
178,228 
- 
178,228 
202,544 
- 
202,544 
Cost of sales
(109,316)
- 
(109,316)
(126,974)
- 
(126,974)
Gross profit
68,912 
- 
68,912 
75,570 
- 
75,570 
Operating expenses
(50,713)
- 
(50,713)
(57,044)
- 
(57,044)
Amortisation of acquisition related intangible assets
- 
(303)
(303)
- 
(303)
(303)
Impairment of held for sale assets and related transition costs
- 
(323)
(323)
- 
- 
- 
Gain on sale of operations
- 
65 
65 
- 
429 
429 
Share-based payment charges
- 
(864)
(864)
- 
(932)
(932)
Release of/(increase in) provisions for dilapidations on leased properties and onerous lease contracts
- 
2,368 
2,368 
- 
(774)
(774)
Restructuring provision release/(charge)
- 
243 
243 
- 
(472)
(472)
Exceptional credit on Defined Benefit Pension Scheme
- 
206 
206 
- 
- 
- 
(50,713)
1,392 
(49,321)
(57,044)
(2,052)
(59,096)
Profit from operations
18,199 
1,392 
19,591 
18,526 
(2,052)
16,474 
Investment income
3 
409 
894 
1,303 
476 
- 
476 
Finance costs
4 
(1,510)
(149)
(1,659)
(924)
(269)
(1,193)
Profit before tax
17,098 
2,137 
19,235 
18,078 
(2,321)
15,757 
Tax
5 
(3,984)
(289)
(4,273)
(4,359)
201 
(4,158)
Profit for the year
13,114 
1,848 
14,962 
13,719 
(2,120)
11,599 
Earnings per ordinary share 
6 
- basic
16.2p
2.3p
18.5p
16.4p
(2.5)p
13.9p
- diluted
15.6p
2.2p
17.8p
15.4p
(2.4)p
13.0p
Paid and proposed dividends per share
7 
- interim
1.20p
0.96p
- final
3.80p
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.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 November 2015
Year ended
30 November 2015
Year ended
30 November 2014
Note
000 
000 
Profit for the year
14,962 
11,599 
Items that will not be reclassified subsequently to profit or loss
Defined Benefit Pension Scheme re-measurements
2,402 
(21,892)
Tax on items that will not be reclassified subsequently to profit or loss
5 
(950)
4,378 
Items that are or may be reclassified subsequently to profit or loss
Fair value (loss)/gain on hedged instruments
(180)
1,018 
Exchange (loss)/gain on translation of overseas operations
(80)
81 
Tax on items that are or may be reclassified subsequently to profit or loss
5 
(36)
657 
Other comprehensive income/(expense)
1,156 
(15,758)
Total comprehensive income/(expense) for the year attributable to equity holders
16,118 
(4,159)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 November 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 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 
Dividends paid
7 
- 
- 
- 
- 
- 
- 
(17,706)
(17,706)
At 30 November 2014
1,889 
27,018 
(2,950)
94 
544 
(304)
(18,177)
8,114 
Profit for the year
- 
- 
- 
- 
- 
- 
14,962 
14,962 
Other comprehensive (expense)/income
- 
- 
- 
- 
(180)
(80)
1,416 
1,156 
Total comprehensive (expense)/income
- 
- 
- 
- 
(180)
(80)
16,378 
16,118 
Transactions with owners of the Company
Shares issued 
13 
1 
17 
- 
- 
- 
- 
- 
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 
CONSOLIDATED BALANCE SHEET
at 30 November 2015
At 30 November 2015
At 30 November 2014
Note
000 
000 
Non-current assets
Goodwill
14,067 
14,067 
Acquisition related intangible assets
8 
461 
Other intangible assets
562 
537 
Property, plant and equipment
7,059 
8,040 
Other receivables
8 
1,168 
1,878 
Deferred tax assets
5 
6,121 
8,147 
28,985 
33,130 
Current assets
Inventories
10,862 
10,604 
Trade and other receivables
8 
25,592 
32,928 
Tax assets
- 
821 
Cash and short-term deposits
9 
48,320 
47,893 
Assets held for sale
10 
1,162 
- 
85,936 
92,246 
Total assets
114,921 
125,376 
Current liabilities
Trade and other payables
11 
(64,974)
(79,085)
Tax liabilities
(2,787)
(600)
Provisions
12 
(2,077)
(3,660)
Liabilities directly associated with assets classified as held for sale
10 
(549)
- 
(70,387)
(83,345)
Net current assets
15,549 
8,901 
Non-current liabilities
Other payables
11 
(662)
(1,657)
Provisions
12 
(2,864)
(5,507)
Defined Benefit Pension Scheme obligation
(21,861)
(26,753)
(25,387)
(33,917)
Total liabilities
(95,774)
(117,262)
Net assets
19,147 
8,114 
Equity attributable to shareholders
Share capital
13 
1,890 
1,889 
Share premium account
27,035 
27,018 
Own shares
(2,510)
(2,950)
Capital redemption reserve
94 
94 
Hedging reserve
364 
544 
Translation reserve
(384)
(304)
Retained earnings - (deficit)
(7,342)
(18,177)
Total equity
19,147 
8,114 
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 November 2015
Year ended
30 November 2015
Year ended
30 November 2014
Note
000 
000 
Profit before tax
19,235 
15,757 
Investment income
(1,303)
(476)
Finance costs
1,659 
1,193 
Profit from operations
19,591 
16,474 
Adjustments for:
Impairment of acquisition related intangible assets
150 
- 
Amortisation of acquisition related intangible assets
303 
303 
Amortisation of other intangible assets
297 
417 
Depreciation and impairment of property, plant and equipment
2,406 
3,415 
Gain on sale of operations
(65)
(429)
Loss on disposal of other intangible assets
- 
73 
Gain on disposal of property, plant and equipment
(95)
(398)
Loss/(gain) on foreign exchange derivatives
133 
(83)
Share-based payment charge
864 
932 
(Decrease)/increase in provisions
(716)
1,339 
Defined Benefit Pension Scheme administration cost
530 
475 
Operating cash flows before movements in working capital
23,398 
22,518 
Increase in inventories
(707)
(55)
Decrease in receivables
6,102 
2,792 
Decrease in trade and other payables
(14,369)
(708)
Utilisation of onerous lease and dilapidations provisions
12 
(2,186)
(836)
Utilisation of employee-related restructuring provisions
12 
(1,166)
(4,348)
Utilisation of other provisions
12 
(132)
(289)
Cash generated from operations
10,940 
19,074 
Defined benefit pension scheme cash contributions (2014: including 8m escrow payment)
(3,984)
(11,821)
Tax paid
(171)
(2,527)
Borrowing facilities arrangement and commitment fees
(447)
(353)
Income on sale of finance lease debt
45 
55 
Net cash inflow from operating activities
6,383 
4,428 
Investing activities
Interest received
364 
403 
Repayment of loans by third parties
18 
33 
Proceeds from sale of other receivables
1,586 
- 
Proceeds on disposal of property, plant and equipment
165 
661 
Purchases of property, plant and equipment
(1,576)
(2,597)
Purchases of other intangible assets
(322)
(1)
Net cash generated by/(used in) investing activities
235 
(1,501)
Financing activities
Ordinary and Special dividends paid
7 
(3,424)
(17,706)
Repayment of capital obligations under vehicle finance leases
(244)
(530)
Proceeds of share capital issue, net of share issue costs
18 
22 
Proceeds from sale of shares held in Staff Share Scheme
55 
- 
Purchase of own shares
(2,470)
- 
Satisfaction of share-based payment awards
(128)
- 
Net cash used in financing activities
(6,193)
(18,214)
Net increase/(decrease) in cash and cash equivalents
425 
(15,287)
Cash and cash equivalents at the beginning of the year
41,893 
57,169 
Effect of foreign exchange rate changes
2 
11 
Cash and cash equivalents at the end of the year
9 
42,320 
41,893 
1. Preliminary announcement
The preliminary results for the year ended 30 November 2015 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 23 March 2016. 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 2015. Statutory accounts for 2014 have been delivered to the Registrar of Companies and those for 2015 will be delivered following the Company's annual general meeting. The auditor's reports on both the 2015 and 2014 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 1 February 2016.
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; impairment of held for sale assets and related transition costs; the gain/(loss) on sale of operations; share-based payment charges; restructuring provision movements, changes in the provision for dilapidations and onerous lease contracts and exceptional credit on Defined Benefit Pension Scheme. 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
During the year ended 30 November 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.
 In May 2015 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 year.
At the balance sheet date, the Group's 100% investment in SpaceKraft Ltd was identified for disposal and was subsequently disposed in December 2015. Assets and liabilities relating to SpaceKraft Ltd have been transferred to held for sale at the balance sheet date. An impairment of 233,000 has been recognised in acquisition related intangible assets and property, plant and equipment and charged to the income statement in addition to related transition costs.
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. 
The Group is structured into three operating divisions: RM Resources, RM Results and RM Education. 
A full description of each division, together with comments on its performance and outlook, is given in the Strategic Report. 
This Segmental analysis shows the results and assets of these divisions. Revenue is that earned by the Group from third parties. 
Exited businesses in both years include the results and assets of operations held for sale at 30 November 2015 and other exited businesses.
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 note 1)
2,137 
Profit before tax
19,235 
RM
RM
RM
Corporate
Exited
Total 
Year ended 30 November 2014
Resources
Results 
Education
Services
Businesses
000 
000 
000 
000 
000 
000 
Revenue
UK
50,601 
27,136 
110,712 
- 
3,302 
191,751 
Europe
3,885 
37 
315 
- 
167 
4,404 
North America
943 
- 
206 
- 
51 
1,200 
Asia
2,977 
119 
- 
- 
3 
3,099 
Rest of the world
653 
535 
680 
- 
222 
2,090 
59,059 
27,827 
111,913 
- 
3,745 
202,544 
Adjusted profit before tax
10,314 
4,648 
7,700 
(4,152)
16 
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 
Segmental assets
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 
RM
RM
RM
Corporate
Exited
Resources
Results 
Education
Services
Businesses
Total 
000 
000 
000 
000 
000 
000 
At 30 November 2014
Segmental
32,734 
6,636 
27,334 
353 
1,236 
68,293 
Other
57,083 
Total assets
125,376 
3. Investment income
Year ended
30 November 2015
Year ended
30 November 2014
000 
000 
Bank interest
224 
242 
Income on sale of finance lease debt
45 
55 
Income from sale of other receivables (see note 1)
894 
- 
Other finance income 
140 
179 
1,303 
476 
4. Finance costs
Year ended
30 November 2015
Year ended
30 November 2014
Note
000 
000 
Borrowing facilities arrangement fees and commitment fees
467 
467 
Finance lease interest
5 
21 
Net finance costs on defined benefit pension scheme
964 
379 
Unwind of discount on long term contract provisions
74 
57 
Unwind of discount on onerous lease and dilapidations provisions
12 
149 
269 
1,659 
1,193 
5. Tax
a) Analysis of tax charge in the Consolidated Income Statement
Year ended
30 November 2015
Year ended
30 November 2014
000 
000 
Current taxation
UK corporation tax 
3,684 
3,117 
Adjustment in respect of prior years
297 
627 
Overseas tax
278 
437 
Total current tax charge
4,259 
4,181 
Deferred taxation
Temporary differences
259 
34 
Adjustment in respect of prior years
(213)
(57)
Overseas tax
(32)
- 
Total deferred tax charge/(credit)
14 
(23)
Total Consolidated Income Statement tax charge
4,273 
4,158 
b) Analysis of tax charge/(credit) in the Consolidated Statement of Comprehensive Income
Year ended
30 November 2015
Year ended
30 November 2014
000 
000 
UK corporation tax
Defined benefit pension scheme
(469)
(1,533)
Share based payments
(504)
- 
Deferred tax
Defined benefit pension scheme movements
949 
(2,185)
Defined benefit pension scheme escrow
- 
(660)
Share based payments
540 
(657)
Deferred tax relating to the change in rate*
470 
- 
Total Consolidated Statement of Comprehensive Income tax charge/(credit)
986 
(5,035)
 * Relates entirely to the defined benefit pension scheme.
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 2015
Year ended 30 November 2014
Adjusted
Adjustments Total
Adjusted
Adjustments Total
000 
000 
000 
000 
000 
000 
Profit on ordinary activities before tax
17,098 
2,137 
19,235 
18,078 
(2,321)
15,757 
Tax at 20.33% (2014: 21.67%) thereon
3,476 
434 
3,910 
3,918 
(503)
3,415 
Effects of:
- change in tax rate on carried forward
 deferred tax assets
123 
- 
123 
- 
- 
- 
- other expenses not deductible for tax
 purposes
50 
- 
50 
104 
- 
104 
- temporary timing differences unrecognised
 for deferred tax
- 
- 
- 
4 
- 
4 
- other temporary timing differences
(7)
1 
(6)
- 
28 
28 
- R&D tax credit
4 
 -
 4
(77)
- 
(77)
- impairments
12 
36 
48 
- 
- 
- 
- overseas tax
246 
- 
246 
207 
- 
207 
- gain on sale of operations
- 
(182)
(182)
- 
(93)
(93)
- prior period adjustments
80 
- 
80 
203 
367 
570 
Tax charge in the Consolidated Income Statement
3,984 
 289
 4,273
4,359 
(201)
4,158 
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:
Accelerated tax depreciation
Defined
benefit pension scheme obligation
Share-based payments
Short-term timing differences
Acquisition related intangible assets
Total 
000 
000 
000 
000 
000 
000 
At 1 December 2013
988 
3,166 
181 
440 
(153)
4,622 
Credit/(charge) to income
(201)
- 
178 
(15)
61 
23 
Credit to equity
- 
2,185 
657 
660 
- 
3,502 
At 30 November 2014
787 
5,351 
1,016 
1,085 
(92)
8,147 
Credit/(charge) to income
- 
- 
(53)
(52)
91 
(14)
Charge 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 
Certain deferred tax assets and liabilities have been offset above.
6. Earnings per ordinary share 
Year ended 30 November 2015
Year ended 30 November 2014
Profit for
the year
Weighted average number of shares
Pence per share
Profit for
the year
Weighted average number of shares
Pence per share
000 
'000
000 
'000
Basic earnings per ordinary share
Basic earnings
14,962 
80,954 
18.5 
11,599 
83,702 
13.9 
Adjustments (see note 1)
(1,848)
- 
(2.3)
2,120 
- 
2.5 
Adjusted basic earnings
13,114 
80,954 
16.2 
13,719 
83,702 
16.4 
Diluted earnings per ordinary share
Basic earnings
14,962 
80,954 
18.5 
11,599 
83,702 
13.9 
Effect of dilutive potential ordinary shares: share based payment awards
- 
3,080 
(0.7)
- 
5,346 
(0.9)
Diluted earnings
14,962 
84,034 
17.8 
11,599 
89,048 
13.0 
Adjustments (see note 1)
(1,848)
- 
(2.2)
2,120 
- 
2.4 
Adjusted diluted earnings
13,114 
84,034 
15.6 
13,719 
89,048 
15.4 
The weighted average number of shares for the year ended 30 November 2015 has been calculated based upon the weighted average of the number of ordinary shares of 22/7p each.
7. Dividends
Amounts recognised as distributions to equity holders were:
Year ended
30 November 2015
Year ended
30 November 2014
000 
000 
Final dividend for the year ended 30 November 2014 - 3.04p per share (2013: 2.46p)
2,451 
2,257 
Special dividend for the year ended 30 November 2013 - 16.00p per share
- 
14,678 
Interim dividend for the year ended 30 November 2015 - 1.20p per share (2014: 0.96p)
973 
771 
3,424 
17,706 
The proposed final dividend of 3.80p per share for the year ended 30 November 2015 was approved by the Board on 1 February 2016. The dividend is subject to approval by Shareholders at the annual general meeting. The anticipated cost of this dividend is 3,079,000 which is not included as a liability at 30 November 2015.
8. Trade and other receivables
2015 
2014 
000 
000 
Current
Financial assets
Trade receivables
17,303 
24,830 
Long-term contract balances
138 
154 
Other receivables
1,048 
743 
Derivative financial instruments
138 
565 
Accrued income
1,489 
1,571 
20,116 
27,863 
Non-financial assets
Prepayments
5,476 
5,065 
25,592 
32,928 
Non-current
Financial assets
Other receivables 
1,168 
1,878 
26,760 
34,806 
Currency profile of receivables
Sterling
26,303 
34,387 
US Dollar
150 
163 
Euro
44 
- 
Indian Rupee
263 
256 
26,760 
34,806 
9. Cash and short-term deposits
2015 
2014 
000 
000 
Cash and cash equivalents
42,320 
41,893 
Short-term deposits
6,000 
6,000 
48,320 
47,893 
The short-term deposits are for a maximum period of 6 months at interest rates of 0.80-0.85%.
10. Held for sale operations
At the balance sheet date, the Group's 100% investment in SpaceKraft Limited was identified for disposal by the Board and was being actively marketed for sale but had not been disposed. This has been determined not to meet the IFRS 5 Non-current Assets Held for Sale and Discontinued Operations definition of discontinued operations but has been recorded as held for sale and presented separately in the balance sheet. In December 2015, the entire share capital of SpaceKraft Limited was disposed. The proceeds on disposal were lower than the combined book value of the net assets of the company and of the Group relating specifically to the company. Accordingly, an impairment of 233,000 has been recognised in acquisition related intangible assets and property, plant and equipment. The corresponding deferred tax liability on the acquisition related intangible assets has also been released.
The major classes of assets and liabilities comprising the operations classified as held for sale at 30 November 2015 are as follows:
Net assets of entity before impairment on classification to held for sale
Net assets arising on consolidation
Impairment on classification to held for sale
Net assets held for sale
000 
000 
000 
000 
Acquisition related intangible assets
- 
150 
(150)
- 
Property, plant and equipment
155 
- 
(83)
72 
Deferred tax assets
53 
- 
- 
53 
Inventories
454 
- 
- 
454 
Trade and other receivables
583 
- 
- 
583 
Total assets held for sale
1,245 
150 
(233)
1,162 
Trade and other payables
(437)
- 
- 
(437)
Provisions
(112)
- 
- 
(112)
Deferred tax liabilities
- 
(30)
30 
- 
Total liabilities directly associated with assets held for sale
(549)
(30)
30 
(549)
Net assets held for sale
696 
120 
(203)
613 
The total pre-tax charge in the income statement relating to the assets held for sale is 323,000, comprising an impairment charge of 233,000 as detailed above and related transition costs.
11. Trade and other payables
2015 
2014 
000 
000 
Current liabilities
Financial liabilities
Trade payables
11,518 
12,793 
Other taxation and social security
4,010 
4,673 
Other payables
761 
2,066 
Accruals
12,525 
14,041 
Obligations under finance leases
40 
230 
Derivative financial instruments
5 
3 
Long-term contract balances
25,509 
31,320 
54,368 
65,126 
Non-financial liabilities
Deferred income
10,606 
13,959 
64,974 
79,085 
Non-current liabilities
Financial liabilities
Obligations under finance leases
- 
49 
Non-financial liabilities:
Deferred income:
- due after one year but within two years
472 
1,077 
- due after two years but within five years
190 
531 
662 
1,657 
65,636 
80,742 
12. Provisions
Onerous lease and dilapidations
Employee-related restructuring
Other 
Total 
Group
000 
000 
000 
000 
At 1 December 2013
7,885 
4,241 
1,330 
13,456 
Utilisation of provisions
(836)
(4,348)
(289)
(5,473)
Release of provisions
(524)
(366)
(431)
(1,321)
Increase in provisions
1,298 
838 
95 
2,231 
Effect of movements in exchange rates
2 
- 
3 
5 
Unwind of discount
269 
- 
- 
269 
At 30 November 2014
8,094 
365 
708 
9,167 
Increase in provisions
-
1,070
1,025
2,095
Utilisation of provisions
(2,186)
(1,166)
(132)
(3,484)
Release of provisions
(2,368)
(85)
(423)
(2,876)
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 
Disclosure of provisions
2015 
2014 
000 
000 
Current liabilities
2,077 
3,660 
Non-current liabilities
2,864 
5,507 
4,941 
9,167 
Provisions for onerous leases and dilapidations have been recognised at the present value of the expected obligation at discount rates of 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 2015, 1,829,000 (2014: 5,738,000) of the provision refers to onerous leases, and 1,750,000 (2014: 2,356,000) refers to dilapidations. The major release in the year relates to the successful sub-letting of one of the Group's properties.
The average remaining life of the leases at 30 November 2015 is 3.5 years (2014: 5.1 years).
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. The major release of Group provisions during the year relates to the successful completion of certain legal activities and a re-assessment of provisions recognised as part of the exit of operations following the 2011 Strategic Review. The significant elements in the provision at 30 November 2015 and the increase in the year are related to regulatory initiatives.
13. Share capital
Ordinary shares of 2p
Ordinary shares of 22/7p
Total 
Number 
000 
Number 
000 
000 
Allotted, called-up and fully paid:
'000
'000
At 1 December 2013
93,515 
1,870 
- 
- 
1,870 
Share consolidation
(93,515)
(1,870)
81,826 
1,870 
- 
Issued in the year
- 
- 
814 
19 
19 
At 30 November 2014
- 
- 
82,640 
1,889 
1,889 
Issued in the year
- 
- 
10 
1 
1 
At 30 November 2015
- 
- 
82,650 
1,890 
1,890 
During the year 10,000 ordinary shares of 22/7p each were issued following the exercise of options under the RM plc 2004 Company Share Option Plan. The exercise price was 1.742 per option.
Ordinary shares issued carry no right to fixed income.

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