REG - RM PLC - Preliminary Results <Origin Href="QuoteRef">RM.L</Origin> - Part 2
01/02/2016 07:10
- Part 2: For the preceding part double click ID:nRSA5242Na
(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 Year ended
30 November 2015 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 Year ended
30 November 2015 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 Year ended
30 November 2015 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 Year ended
30 November 2015 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 Year ended
30 November 2015 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 123 - 123 - - -
deferred tax assets
- other expenses not deductible for tax 50 - 50 104 - 104
purposes
- temporary timing differences unrecognised - - - 4 - 4
for deferred tax
- 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 Share-based payments Short-term timing differences Acquisition related intangible assets Total
benefit pension scheme obligation
£000 £000 £000 £000 £000 £000
At 1 December 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 Weighted average number of shares Pence per share Profit for Weighted average number of shares Pence per share
the year the year
£000 '000 £000 '000
Basic earnings per ordinary share
Basic earnings 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 Year ended
30 November 2015 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
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