REG-RM plc RM plc: Final Results
14/03/2024 07:15
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RM plc (RM.)
RM plc: Final Results
14-March-2024 / 07:03 GMT/BST
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14 March 2024
RM plc
Final Results for the year ended 30 November 2023
Solid transformation progress, business stabilised and clear strategic path to deliver growth
RM plc (‘RM’), a leading global educational technology (‘EdTech’), digital learning and assessment
solution provider, reports its full year results for the year ended 30 November 2023 and outlines its new
strategic development programme following a fundamental review of the business by its newly established
leadership team.
Stabilised the business and made significant operational progress following severely demanding
operational challenges
• Consortium business ceased trading in December 2023 following FY23 losses of c.£10m.
• Over-specified ERP system implementation permanently ceased to avoid significant additional costs.
• Two into one distribution centre consolidation commenced, realising £1.5m annualised savings.
• Transformation driven restructuring delivering additional annualised savings of £8.5m, as announced,
with further gross annualised cost synergies of £10m identified and commencing in FY24, with plans to
reinvest £5m in the business to support growth.
• Established and embedded new leadership team alongside the completion of a thorough strategic review
of the business.
Clear strategy unveiled – to become a leading EdTech company serving global customers
• Strategic Plan unveiled to build a Global Accreditation Platform to take advantage of the education
transformation towards fully on-screen examinations. Strategic Portfolio Roadmap of RM developed IP,
products and solutions delivered to accreditors, educators and directly to learners for adjacent
solutions.
• Further international expansion with strategic aim of capturing the significant future growth
opportunities in the $222 billion Global EdTech market1.
• New wins with strategic customers as foundation customers move towards fully digital assessment and
accreditation processes. New wins are proof of the expertise and customer appeal of the new RM.
• RM signs amended and extended agreement with lenders in support of strategy.
• Move towards a streamlined and customer-centric target operating model, creating greater agility and
gross cost synergies of £20m.
Financial highlights
• Revenue from continuing operations2 of £195.2m, down 8.9% (FY22: £214.2m), revenue growth of 8.7% in
the strategic RM Assessment business and 5.8% in TTS International partially offsetting revenue
decline of 42.8% in the troubled Consortium business and challenges in UK schools budgets impacting
revenues for Technology managed services and TTS UK.
• Adjusted operating profit from continuing operations decreased by 96.0% to £0.3m (FY22: £7.5m)
predominately driven by the lower trading volumes in the Consortium business and increased Corporate
costs linked to rebuilding the finance and management teams, offset by the various divisional savings
initiatives commenced during the year.
• Excluding the recently closed Consortium business, the Group had revenues of £175.9m (FY22: £180.4m)
and adjusted operating profit of £10.0m (FY22: £12.5m) in the year. Exceptional impairment costs of
£38.9m relate to the closure of the Consortium school supply business in December 2023. Total
exceptional costs of £46.9m comprise £41.4m non-cash and £5.4m cash.
• Adjusted EBITDA of £7.0m (FY22: £12.9m).
• Statutory loss of £(29.1)m (FY22: loss of £14.5m) driven by a £10.4m impact from adjusted loss before
tax, a £38.9m impairment relating to the decision to close the Consortium business offset by lower
ERP replacement programme and warehouse strategy costs, a £10.6m gain from the sale of IP addresses
and a £13.4m gain on the sale of RM Integris and RM Finance, and a £1.8m tax charge.
• Adjusted net debt of £45.6m (HY23: £52.0m) reflecting improved profitability in H2, lower exceptional
spend following actions taken to cease ERP implementation and closure of Consortium.
1. Source: IMARC Group
2. Continuing operations for the years ended 30 November 2023 and 2022 include the results of RM’s TTS,
Consortium, Assessment and Technology businesses. Continuing operations excludes the results of the
RM Integris and RM Finance businesses which were sold on 31 May 2023 and have been included in
discontinued operations.
New strategy unveiled to build a simpler, customer-centric business
• Simplified business will focus on end customers: learners, educators, and accreditors.
• Further gross annualised cost savings of £10m to be realised through a number of strategic
initiatives identified including a new target operating model in FY24, with up to £5m reinvested
annually in Sales & Marketing to support the new strategy. This is in addition to the £10m annualised
cost savings already announced and delivered in FY23.
• Plans to further simplify group, de-leverage, return to growth, and enrich the RM products and
solutions to greater profitability.
• A new Strategic Portfolio Roadmap to build a broader platform of RM owned and developed IP, products,
and solutions to capture the digital transformation opportunity across the world of learning,
educating and accrediting – to include a Global Accreditation Platform and adjacent digital solutions
in development aimed at an untapped global learner customer base. Strong focus on RM owned and
designed IP with target to become 80% of revenue.
• International expansion in the Global EdTech market by leveraging RM’s existing global footprint,
following British and international curricula.
• Build upon the company’s 50-year history of EdTech knowledge and innovation by investing in employee
capability, learning, development and EdTech expertise.
Current trading and FY24 outlook
Trading in the first months of the year has been in line with our expectations and full-year outlook
remains in line with market expectations. The ongoing business is expected to recover a significant
proportion of the lost Consortium revenue. During FY24 we expect to operate within our banking covenants
for adjusted net debt, allowing for working capital and capital expenditure required to fund our future
growth plans, plus continuing interest payments and committed pension contributions.
Mark Cook, Chief Executive of RM, said
“Following a turbulent period, we have taken decisive action to transform and stabilise RM, including the
difficult decision to cease trading in the Consortium business, permanently close down the EVO ERP system
and consolidate our distribution centre estate.
“With the business in an improved financial and operational position, I am delighted to unveil our new
strategic plan to deliver growth. This will create a simpler and more customer-centric business, with a
focus on investing in RM-owned and designed IP, to take advantage of structural digital growth drivers
across the education sector in the UK and internationally.
“While we have made significant progress over the past year there is still much to be done, but I am
confident that our newly appointed and invigorated management team can build on RM’s 50-year heritage of
innovation and capture the scale of the global growth opportunity we see.
“I’d like to take this opportunity to thank all my colleagues and stakeholders for their hard work and
support during what has been both a challenging but transformational period for the business.”
Financial summary
£m FY23 FY22 Variance
Revenue from continuing operations 195.2 214.2 (8.9%)
Loss before tax from continuing operations (41.2) (20.8) 98.1%
Discontinued operations1 14.2 1.6 787.5%
Statutory loss after tax (29.1) (14.5) 100.7%
Diluted EPS from continuing operations (51.8)p (19.3)p 168.4%
Adjusted performance measures2:
Adjusted operating profit from continuing operations 0.3 7.5 (96.0%)
Adjusted operating profit margin 0.2% 3.5% (3.3%)
Adjusted EBITDA 7.0 12.9 (45.7%)
Adjusted (loss)/profit before tax from continuing operations (5.2) 5.3 (198.1%)
Adjusted diluted EPS from continuing operations (15.8)p 4.2p (476.2%)
Adjusted net debt3 45.6 46.8 2.6%
1 Discontinued operations include the results and net gain on disposal arising from the sale of the RM
Integris and RM Finance Businesses and related assets on 31 May 2023.
2 Throughout this statement, adjusted operating profit, adjusted EBITDA, adjusted (loss)/profit before
tax and adjusted EPS are Alternative Performance Measures, stated after adjusting items (See Note 3)
which are identified by virtue of their size, nature and/or incidence. The Group reports adjusting items
which are used by the Board to monitor and manage the performance of the Group, in order to ensure that
decisions taken align with the Group’s long-term interests. Adjusting items are identified by virtue to
the size, nature or incidence at a segment level and their treatment is applied consistently
year-on-year.
3 Adjusted net debt is defined as the total of borrowings less capitalised fees, cash and cash
equivalents and overdrafts (see Note 3). Lease liabilities of £16.5m (2022: £19.1m) are excluded from
this measure as they are not included in the measurement of adjusted net debt for the purpose of covenant
calculations (see Note 13).
Presentation details
A presentation by Management for investors and analysts will be published on the company website later
this morning at 1 https://www.rmplc.com/.
Contacts:
RM plc 2 investorrelations@rm.com
Mark Cook, Chief Executive Officer
Simon Goodwin, Chief Financial Officer
Fiona O’Nolan, Investor Relations
Headland Consultancy (Financial PR) +44 203 805 4822
Stephen Malthouse (smalthouse@headlandconsultancy.com)
Chloe Francklin ( 3 cfrancklin@headlandconsultancy.com)
Dan Mahoney (dmahoney@headlandconsultancy.com)
Notes to Editors:
About RM
RM was founded in 1973, with a mission to improve the educational outcomes of learners worldwide. Fifty
years on, we are a trusted Global EdTech, digital learning and assessment solution provider, transforming
learners, educators, and accreditors to be more productive, resilient, and sustainable. Our simple
approach enables us to deliver best in class solutions to optimise accreditation outcome.
RM is focused on delivering a consistently high-quality digital experience, acting as a trusted
consultative partner to provide solutions that deliver real impact for learners worldwide. Our three
businesses include:
• Assessment - a global provider of assessment software, supporting exam awarding bodies, universities,
and governments worldwide to digitise their assessment delivery.
• TTS (Technical Teaching Solutions) – an established provider of education resources for early years,
primary schools, and secondary schools across the UK and to 80 countries internationally.
• Technology - a market-leading advisor and enabler of ICT software, technology and bespoke services to
UK schools and colleges.
Chief Executive’s Statement
Group Performance Overview
A year of stabilising, simplifying, and strengthening
2023 in review
When I joined RM in January 2023, the business was facing unprecedented operational challenges which have
impacted our financial performance in the year. We took considered, but decisive actions to address these
issues through our Transformation programme, as well as embarking on a cost reduction and efficiency
drive across our entire business. As we closed the year these inherited challenges have now been
addressed, and we emerge with clarity on our strategic direction with a more focused stable platform for
future growth and strategic development.
During the year, through our actions, we mitigated the considerable negative financial impact of
Consortium, which continued to hold back the overall performance of the Group, culminating in the
difficult decision in November to cease trading in the loss-making business, which stopped taking orders
at the end of December 2023. This decision has also avoided further losses with additional cost benefit,
already reflected in market expectations for FY24. Following the failed go-live of the over-specified ERP
system within Consortium in FY22, we permanently closed down the roll out to the Group, capping the
budget over runs and subsequently cancelled the project, to avoid significant additional costs. This
decision to cease trading in Consortium will allow RM Resources’ management to focus on its successful
TTS business, which is profitable and has significant international growth potential. In the second half
of the year, we focused on strengthening RM’s internal capabilities and leadership team, implemented
further significant cost savings, and secured the support of our lenders for our future strategic plans
(details of which can be found below). This includes: commencing a two into one distribution centre
consolidation, realising £1.5m annualised savings and a Transformation driven restructure delivering
additional annualised savings of c.£8.5m, as announced at our half year results. The closure of
Consortium has culminated in non-cash goodwill and asset impairments of £38.9m.
The new management team’s focus on the foundational strengths, intellectual property, and assets of the
business will drive RM’s return to revenue and profitability growth. The strength of our underlying
business is demonstrated by the major strategic and long-term customer contracts we have won in our
Assessment business towards the end of the year which are core to RM’s strategic growth plans.
Financial and operational performance
As expected, our financial performance reflected the impact of the critical actions taken to stabilise
the business, and I am pleased that we finished the year in line with our updated guidance, following the
decisive cost actions taken in the second half. Our Group revenue was £195.2m, down8.9%, reflecting the
continued decline in Consortium trading, challenges in UK schools’ budgets which impacted our TTS UK and
Technology managed services revenues, but with growth across both our Assessment and TTS International
businesses. Adjusted operating profit from continuing operations was £0.3m, and adjusted EBITDA was
£7.0m. We finished the year with a slightly improved adjusted net debt position of £45.6m.
The new management team made significant inroads into the transformation and continuous improvement
programme. These management actions have provided a more stable business, identified cost savings, and
started on the road of continuous efficiency improvements across the entire business. The underlying RM
business today (ex-Consortium) is healthy, with FY23 revenue of £175.9m (FY22: £180.4m) and adjusted
operating profit of £10.0m (FY22: £12.5m), with strong revenue and margin growth prospects in the UK and
internationally. With trading ceased in the loss-making Consortium business, we expect to see a measured
improvement to our financial performance going forward.
Divisional performance
The RM Assessment division, a global leader in platform delivery of digital assessment and exam marking
solutions continues to grow, with revenue increased by nearly 9% to £42.3m (FY22: £38.9m) and adjusted
operating profit up 39% to £10.3m (FY22: £7.4m), an adjusted operating margin of 24.2% (FY22: 18.9%),
reflecting the emerging opportunities in the global digital assessment market.
This business has made strong progress throughout the year, with continuing successful delivery of live
exam and marking sessions worldwide, including the first full session delivery for three new clients
across school exams, vocational exams, and learners training for accountancy qualifications.
Customer contract renewal performance continued to be strong throughout the year with over £16m of
renewals in FY23 and only one small contract loss. We also achieved 8 contracts for new services with new
and existing clients, expanding our set of solutions within support of schools, further education, and
professional qualifications.
The business’ focus on leading customers through the journey to digital assessment maturity was
recognised by an award at the e-Assessment Association conference, for the ‘Most Innovative Use of
Technology in Assessment’ for its exam malpractice service, commending our commitment to overcoming the
challenges of digital adoption in the education industry.
The year ended on a high with two further contracts in the professional qualifications market at
‘preferred bidder’ status, and post year end we achieved preferred bidder status with another two major
strategic customers for their long-term digital transformation programmes, providing good momentum into
FY24.
Following the closure of Consortium, our RM Resources division now consists solely of our flagship brand
TTS which operates both within the UK and internationally. TTS’s UK business was also impacted by
challenges in UK schools’ budgets. The business collaborates with teachers and educational experts from
across the globe to create unique and innovative learning resources and learning environments for
children in more than 100 countries. This includes the TTS programming journey, which is an innovative
robotics range designed to develop computational thinking and programming skills, from early years to
primary and for children with special educational needs. Our FY23 performance includes the Consortium
business, now closed, with revenue of £19.3m, down 43% (FY22: £33.7m) and an adjusted operating loss of
£9.7m (FY22: loss of £5.0m).
TTS International saw a strong performance in the year with continued growth in key market territories
through our international schools and distributors channels. The business remains focused on the
continued development of its own designed TTS product ranges, which drive continued growth worldwide, and
access to Education Ministries and Government bodies with greater buying power. The growth in TTS
International is being built from a platform of 130 global distributors in 115 countries serving tens of
thousands of schools and educators.
Our RM Technology division is a strategic partner for schools, helping them to drive more engaged
learning, more collaborative teaching, and better outcomes through technology. We completed the redesign
of the business’ operating model and improved its efficiency during the year, and the sale of RM Integris
and Finance was also completed, generating net cash proceeds of £10.8m. As anticipated, the Technology
division returned to profitability in the second half as a result of the impact of the cost savings
initiated earlier in the year, and on the back of higher revenue largely from "Connect the Classroom"
projects. It is expected to be sustainably profitable on an ongoing basis.
Revenue was £57.7m, down 5.3% (FY22: £60.9m), reflecting a challenging market for managed services due to
pressures on school budgets due to inflation and infrastructure, although revenue grew marginally in the
second half. Adjusted operating profit was £0.7m (FY22: £2.2m), reflecting a return to profitability
following the losses incurred in the first half. Given the efficiency improvements made during the year
we expect adjusted operating margin to improve going forward from the 1.3% achieved in FY23.
We were pleased to have extended our relationships with Education Scotland (Glow) and Brooke Weston Trust
(BWT). Customer retention remains strong at 95% with more customers starting to explore and take an
interest in other product lines as part of our upsell program and we are excited by the opportunities to
grow our new managed and professional services portfolio in FY24. The focus remains on Multi Academy
Trusts and public sector customers (e.g. local authorities) and internationally offering managed
services, ‘tech in a box’ solutions.
New Strategic Plan
Creating a leading global educational technology, digital learning and assessment solution provider
RM started its journey in 1973 as a pioneer of EdTech in Oxford, building computers and networks for the
education sector, as technology emerged as a key business enabler. Our educational resources have been
supplied to support school curricula with hundreds of RM own-designed products, resources and solutions
supporting accreditors, such as awarding bodies, and educators such as teachers; growing internationally
to support country wide education curricula in the Americas, Middle East and Australia.
The assessment of a learner’s abilities is a key element of RM’s solution set and this is evolving from
end point assessment (i.e. the exam or awarding point) for both paper-based and online marking into a
full end to end digital process for the collation and marking of exams and ongoing assessment towards the
end point exam. RM is enhancing its current accreditation platform to enable global scale and end-to-end
digital process that transitions all paper exams to be authored and delivered on screen over the next 10
years – this will enable our customers to have 100% of exams on screen by the turn of the decade, with
the exciting possibilities that digital examinations bring for innovative new ways to assess students.
Today, RM is a partner of choice for thousands of educators globally, with 50 years of educational
experience and being a trusted advisor to learners, educators, and accreditors.
As we plan for the future RM, our core ambition will be to support learners with a ‘lifetime of learning
experience’ with the purpose of enriching the lives of learners globally. Core to the future of RM are
the digital solutions that support a learner’s assessment of progress towards an examination, as well as
the accreditor’s ability to provide a platform to enable and enhance their examination assessment.
These new guiding principles underpin our new strategy:
• Build a Global Accreditation Platform to enable end-to-end digital examinations, authoring and
accreditations.
• Building a more customer-centric company focused on accreditors, educators, and adjacent learner
direct solutions.
• High proportion of RM designed and owned IP in the delivered product and solution portfolio.
• Build on the global opportunity embedded within our deep experience of the British and other
international curricula from our customer base.
• Addressing the needs of learners, educators, and accreditors, while supporting the lifetime of
learning, from pre-school to higher education and professional qualifications.
• Realising growth opportunities in the $222 billion Global EdTech market through international
expansion.
Product and Solution Roadmap
RM operates in the Global EdTech market valued at $222 billion, which has structural growth drivers,
strong market positions and, as a result of the continued advancement of technology across the education
sector, is expected to grow at a CAGR of c.12% from 2024 to 2032. Key market drivers include the
digitalisation of assessment, the expansion of technology in education worldwide and a continued focus on
developing IP resources, particularly for the early years and SEN sectors.
There is a digital transformation taking place in the assessment area of EdTech and RM is very well
placed to support accreditors’ digital transformation journey over the next decade. We have been
providing platform solutions such as Assessor© and Assessment Master© to enable our global customers to
embark on a digital transformation of their learning, marking and end-to-end business process. RM’s 50
years of knowledge and experience is being encapsulated in an advisory and consulting capability that
will enable our customers and prospects to tap into RM’s research, innovation, and development centres.
With the support of RM’s lenders and funding from the transformation driven cost savings, the strategy
programme will look to enhance and build out these core EdTech solutions, supported by our teams in UK,
Europe, Middle East, America, Australia, and Asia. This investment will consist of re-investment of cost
savings into the capability of Sales & Marketing and go-to-market initiatives within the customer facing
units to support global growth plans.
FY24 Strategic Programme actions
RM has evolved over time, creating three EdTech businesses, serving markets in the UK, Europe, Middle
East, America, Australia, and Asia, with a central group structure. With our clearer core strategy and a
clean line of sight to the three customer groups – learners, educators, and accreditors – the business
will continue to have three customer facing go-to-market units but only with their associated marketing
and sales costs. To support the new strategy, a new Target Operating Model will be introduced during the
coming year, flattening the internal back office corporate functions which will focus on core processes
to enable the optimum customer solution, creating additional gross cost synergies of c.£10m, with £5m to
be reinvested in Sales & Marketing to support growth.
We have the right people, the right core solutions, a global market opportunity, and a shared ambition
across the organisation to deliver a higher performing, more profitable RM. Whilst we have achieved much
in the last year, there is still much to be done and our turnaround will take some time to translate to a
high performing new RM business, with good progress expected from FY25.
Board and Senior Leadership changes
Following the operational and liquidity challenges of FY22 it was necessary to review the expertise and
relevant experience of the Board and the Executive Committee to have a technology and growth mindset as
RM embarked on its strategic transformation.
Simon Goodwin joined the Board and Executive Committee as Chief Financial Officer in August 2023. Simon
brings over 15 years of experience in finance leadership roles and will be central to the Group’s
strategy and helping to drive value across the business.
Further Executive Committee appointments during FY23 included: Gauri Chandra as CEO of our India
operations in January 2023; Dr Grainne Watson to the new role of Chief Digital Officer in June 2023;
Sarah Fawsitt as our new Chief People Officer in September 2023; followed by Daniel Fattal who was
appointed in November 2023 as Director of Legal and Company Secretary.
These new additions, along with six out of seven board members being appointed in FY23, provide us with a
senior leadership team that contains a broad range of talent and relevant experiences to help drive the
business forward.
Financial review
Having joined RM during Q4 of the financial year, I was immediately impressed by the decisive decisions
that Mark and the Board had already made to combat the financial challenges that the business faced.
Together we then made the difficult decision to cease trading in the loss-making Consortium business
shortly after the end of the financial year; ending a lengthy period of financial losses and significant
distraction for the Resources division and RM as a whole.
FY23 was a challenging year financially for RM; caused primarily, by the material underperformance of the
Consortium business. However, RM was also impacted by an increasingly challenging domestic education
market; characterised by falling budgets and competing demands for expenditure, as UK schools dealt with
cost inflation and infrastructure challenges. That pressure directly impacted TTS’ UK business, as well
as the RM Technology business; both of which saw revenues decline. Internationally, FY23 was a much more
encouraging year with significant growth in both TTS International and the RM Assessment business.
Despite these extremely challenging circumstances, we managed to close the year with a small, but
positive adjusted operating profit from continuing operations and in line with the market expectations
which were updated at the Half Year. Actions taken to increase efficiency and to reduce the cost base of
the business have contributed to that result and will have further benefit as we head into FY24.
RMs long term banking partners, HSBC and Barclays continued to demonstrate their support for the business
throughout the year. Our lenders have granted waivers to EBITDA covenants during H2, have demonstrated
pragmatism in their handling of soft liquidity covenant breaches from the end of the year, and have
swiftly granted an extension to our banking facility, which now runs to July 2026, with a new set of
covenants better aligned to the business’ outlook.
We ended FY23 with an adjusted net debt slightly improved on FY22, and, again, in line with the half year
guidance. One off cash generation from the sale of RM Integris, RM Finance, and excess IPv4 licences; was
offset by the reversal of significant working capital decisions taken at the end of FY22, as well as
higher interest payments and meeting our pension obligations.
Finally, as previously identified, the financial control environment within RM was below the required
standard, as a result of the business’ focus over several years on the failed rollout of the Evo ERP
project. The RM finance team have worked extremely hard to support the business during this challenging
year, but to also make improvements to this controls environment. While there is still further
improvement required, I am confident that the team will continue to demonstrate the required focus and
diligence, and that we will deliver further improvements through the coming year.
Financial performance
£m FY23 FY22 Variance
Revenue from continuing operations 195.2 214.2 (8.9%)
Loss before tax from continuing operations (41.2) (20.8) 98.1%
Discontinued operations1 14.2 1.6 787.5%
Statutory loss after tax (29.1) (14.5) 100.7%
Diluted EPS from continuing operations (51.8)p (19.3)p 168.4%
Adjusted performance measures2:
Adjusted operating profit from continuing operations 0.3 7.5 (96.0%)
Adjusted operating profit margin 0.2% 3.5% (3.3%)
Adjusted EBITDA 7.0 12.9 (45.7%)
Adjusted (loss)/profit before tax from continuing operations (5.2) 5.3 (198.1%)
Adjusted diluted EPS from continuing operations (15.8)p 4.2p (476.2%)
Adjusted net debt3 45.6 46.8 2.6%
1 Discontinued operations include the results and net gain on disposal arising from the sale of the RM
Integris and RM Finance Businesses and related assets on 31 May 2023.
2 Throughout this statement, adjusted operating profit, adjusted EBITDA, adjusted (loss)/profit before
tax and adjusted EPS are Alternative Performance Measures, stated after adjusting items (See Note 3)
which are identified by virtue of their size, nature and/or incidence. The Group reports adjusting items
which are used by the Board to monitor and manage the performance of the Group, in order to ensure that
decisions taken align with the Group’s long-term interests. Adjusting items are identified by virtue to
the size, nature or incidence at a segment level and their treatment is applied consistently
year-on-year.
3 Adjusted net debt is defined as the total of borrowings less capitalised fees, cash and cash
equivalents and overdrafts (see Note 3). Lease liabilities of £16.5m (2022: £19.1m) are excluded from
this measure as they are not included in the measurement of adjusted net debt for the purpose of covenant
calculations (see Note 13).
Divisional performance
Following the decision by management to separately monitor the results of the Consortium and TTS brands
in June 2023, the previously reported RM Resources segment has been allocated between the RM TTS segment,
which continues to be operated by the Group, and the RM Consortium segment which is being closed. Prior
year revenue and adjusted operating profit/(loss) comparatives have been restated accordingly.
£m FY23 FY 22 Variance
RM TTS:
Revenue 75.9 80.6 (5.8%)
TTS 52.2 58.2 (10.3%)
International 23.7 22.4 5.8%
Adjusted operating profit 6.0 7.8 (23.1%)
Adjusted operating profit margin 7.9% 9.7% (1.8%)
RM Consortium:
Revenue 19.3 33.7 (42.8%)
Adjusted operating (loss)/profit (9.7) (5.0) 94.0%
Adjusted operating profit margin (50.3%) (14.8%) (35.5%)
RM Assessment:
Revenue 42.3 38.9 8.7%
Adjusted operating profit 10.3 7.4 39.0%
Adjusted operating profit margin 24.2% 18.9% 5.3%
RM Technology:
Revenue: 57.7 60.9 (5.3%)
Adjusted operating profit 0.7 2.2 (65.5%)
Adjusted operating profit margin 1.3% 3.6% (2.3%)
Group revenue from continuing operations decreased by 8.9% to £195.2m (FY22: £214.2m) largely driven by
lower trading volumes in the UK elements of the Resources division, with the continued decline of the
Consortium business, challenging market conditions in the TTS UK business, and lower services revenue in
the Technology division following contract losses in FY22. FY22 also included £1.3m revenue related to
the sale of IPv4 addresses that have subsequently been classified as other income. RM Assessment & the
TTS International business both grew year on year, up 8.7% and 5.8% respectively, following new contract
wins and increased sales activity.
Adjusted operating profit from continuing operations decreased by 96.0% to £0.3m (FY22: £7.5m)
predominately driven by the lower trading volumes in the Consortium business and increased Corporate
costs linked to rebuilding the finance and management teams, offset by the various divisional savings
initiatives commenced during the year.
RM TTS revenues decreased by 5.8% to £75.9m (FY22: £80.6m) driven by challenging UK education market
conditions. Whilst overall TTS declined year-on-year, the International business saw growth of 5.8% with
strong performance in the distributor channel. Divisional adjusted operating profit decreased to £6.0m
(FY22: £7.8m) and adjusted operating margin decreased to 7.9% (FY22: 9.7%) driven predominantly by lower
revenue volumes.
RM Consortium revenues decreased by 42.8% to £19.3m (FY22: £33.7m) as the business struggled to recover
from the past mismanagement of the IT implementation programme and challenging education market
conditions. Divisional adjusted operating loss increased to £9.7m (FY22: loss of £5.0m) and adjusted
operating margin decreased to a loss of 50.3% (FY22: loss of 14.8%) reflecting the lower revenue
performance.
RM Assessment revenues improved by 8.7% to £42.3m (FY22: £38.9m) driven by contract wins in FY22 and FY23
and a year-on-year increase in marking and test volumes. Divisional adjusted operating profit increased
to £10.3m (FY22: £7.4m) and adjusted operating margin increased to 24.2% (FY22: 18.9%) driven by
increased revenue, improved efficiency in hosting, and contractor costs linked to data study contracts in
FY22 not repeating.
RM Technology revenues decreased by 5.3% to £57.7m (FY22: £60.9m) reflecting contract losses in the
Service business in FY22 and the inclusion of £1.3m relating to the sales of excess IPv4 address in H1
FY22. Subsequent sales have been classified as other income. Divisional adjusted operating profit
decreased to £0.7m (FY22: £2.2m) and adjusted operating margin decreased to 1.3% (FY22: 3.6%). Excluding
the £1.3m IPv4 sales, adjusted operating profit and margin were in line with FY22 reflecting the actions
management have taken to improve the efficiency of the business in H2 given the lower revenue volumes.
Adjusted loss before tax was £5.2m (FY22: profit of £5.3m), which was due to higher losses in Consortium
and increased Corporate costs relating to the rebuild of the management and finance teams.
Statutory loss after tax was £29.5m (FY22: loss of £14.5m), which was driven by the £10.4m impact from
adjusted loss before tax (see above), a £38.9mimpairment relating to the decision to close the Consortium
business, offset by lower ERP replacement programme and warehouse strategy costs, a £10.6m gain from the
sale of IP addresses (see adjusting items below), a £13.4m gain on the sale of RM Integris and RM
Finance, and a £1.8m tax charge.
Adjusted diluted loss per share was (15.9)p (FY22: earnings per share of 4.2p).
RM Consortium closure
On 24 November 2023, the Group announced the decision to close the RM Consortium business, part of the RM
Resources division, with trading ceasing on 8 December 2023 after which all unfulfilled orders were
cancelled.
Following the announcement of the closure of the Consortium business and the subsequent termination of
the ERP replacement programme, management performed an impairment review resulting in the Group
recognising a total impairment charge of £38.9m, including £10.6m of goodwill relating to the RM
Consortium business (see Note 10), £17.8m of intangible assets including all remaining Consortium brand
and ERP assets, £5.9m of property, plant and equipment at the RM Consortium warehouse, £2.8m of RM
Consortium inventory write downs to net realisable value, £0.7m of other current assets, and an onerous
contract provision of £1.5m in respect of IT licences associated with the Group’s ERP solution.
In addition, the previously reported RM Resources segment has been allocated between the RM TTS segment,
which continues to be operated by the Group, and the RM Consortium segment which is being closed. Prior
year revenue and adjusted operating profit/(loss) comparatives have been restated accordingly.
The liquidation of RM Consortium inventories continues and is expected to be completed during the second
half of the 2024 financial year, after which the Group expects to treat the RM Consortium business as
discontinued for financial reporting purposes.
Adjusting items
To provide an understanding of business performance excluding the effect of significant change programmes
and material transactions, certain costs are identified as ‘adjustments’ to business performance as set
out below:
£m FY23 FY22
Amortisation of acquisition-related intangible assets 1.7 1.8
Impairment of RM Consortium assets1 38.9 -
Restructuring costs2 2.7 0.3
Configuration of SaaS licences (ERP)3 3.1 17.4
Independent business review related costs 0.5 -
Dual running costs related to investment strategy - 5.4
Impairment of ERP solution - 2.2
Onerous provision for IS licences - 1.2
Disposal related costs - 0.8
Total adjustments to administrative expenses 46.9 29.1
Sale of IP addresses4 (10.6) (2.8)
Gain on disposal of operations (0.2) -
Gain on sale of property - (0.2)
Total adjustments 36.1 26.1
Tax impact (6.0) (6.5)
Total adjustments after tax – continuing operations 30.1 19.6
Gain on disposal of discontinued operations5 (13.4) -
Total adjustments after tax 16.7 19.6
1 Includes £10.6m of goodwill impairment (see Note 10), £17.4m of impairment of other intangible assets,
£5.9m of impairment of property, plant and equipment, £2.8m of inventory write downs, £0.7 write off of
other current assets and an onerous contract provision of £1.5m in respect of IT licences.
2 Restructuring costs of £2.7m of which £0.6m related to the Group’s decision to close the RM Consortium
business.
3 The configuration and customisation costs relating to the ERP replacement programme, which have been
expensed in accordance with IAS 38: Intangible Assets and IFRIC agenda decisions but have been treated as
adjusting items as they were a significant component of the Group’s warehouse strategy. These costs total
£2.7m (2022: £17.4m) based on the development work undertaken.
4 Income generated following the completion of the sale of IP addresses.
5 During the year Group completed the disposal of the Integris and Finance business which generated a
gain on sale of operations of £13.4m.
Inventory
Inventories decreased by 47.0% to £14.0m (FY22: £26.4m) primarily as a result of improved working capital
management and the closure of the RM Consortium business.
Corporate Costs
Corporate costs in the period were £7.0m, up from £4.9m in 2022, as a result of the rebuilding of the
management and finance teams.
Taxation
The total tax charge for the year for continuing operations was a £2.1m charge (FY22: £4.7m credit).
There are multiple tax effects influencing the tax rate in income, costs, deferred tax effects and the
impact of no tax charge in the discontinued businesses. These effects are explained in more detail in the
tax note (see Note 6) in the Financial Statements.
Disposals
During the prior year, the Group agreed to sell the RM Integris and RM Finance businesses from within the
RM Technology Division, completed on 31 May 2023, which generated a net gain on sale of operations of
£13.4m during the year ended 30 November 2023. The performance of these businesses in both 2023 and 2022
have been classified and presented as discontinued operations within the Financial Statements. In the
year these businesses generated £2.4m of revenue (FY22: £4.9m) and £0.8m of adjusted operating profit
(FY22: £1.6m).
Cash flow, Net Debt and Lender Agreement
On a statutory basis, net cash outflow from operating activities was £10.6m (FY22: £20.8m) which included
working capital outflow primarily linked to bringing supplier payments up to date following cash
protection activities ahead of FY22 year end, not repeated ahead of FY23 year end. This includes £4.5m
(FY22: £4.5m) of deficit recovery payments made to the Group’s defined benefit pension schemes during the
year.
Adjusted net debt closed the year at £45.6m (FY22: £46.8m) as the £10.6m net cash outflow from operating
activities (see above), £5.0m (FY22: £2.3m) of interest paid, £1.7m of facility arrangement fees and
£3.4m of lease repayments were offset by proceeds from the sale of the RM Integris and RM Finance
businesses (£10.9m) and the sale of IP addresses (£10.7m).
In March 2023, the Group secured an agreement with lenders to extend the existing £70.0m facility to 5
July 2025, subject to the addition of a further ‘hard’ liquidity covenant test requiring the Group to
have liquidity greater than £7.5m on the last business day of the month, and liquidity not be below £7.5m
at the end of two consecutive weeks within a month.
In April 2023, the Group agreed with the Trustee of the RM and CARE Schemes to provide the Schemes with a
second ranking fixed and floating charge over the shares of all obligor companies (except for RM plc) and
a payment of £0.5m each at bi-annual intervals starting on August 2023 which is contingent upon the
adjusted debt leverage ratio being lower than 3.2x at that date. No such payment was made during the year
ended 30 November 2023. See Note 13 for further details.
The business operated within its existing financial covenants for the first half of 2023 but indicated
that a breach was expected for the facility’s LTM EBITDA covenant from the third quarter of the year
ended 30 November 2023 in its interim financial statements. EBITDA waivers were granted by lenders for
the August and November 2023 periods and the Group continues to comply with the conditions of each lender
with regards to any waivers and the respective facility agreement. At the end of November 2023, the
minimum EBITDA covenant required was £8.6m versus actual EBITDA of £7.0m. In addition, during November
2023, the soft liquidity covenant limit was forecast to be exceeded for the first time, resulting in a
meeting held with lenders under the terms of the facility.
Since the year end, the Group has secured an agreement with Lenders, which extends the existing £70.0m
facility to July 2026. The fixed charge over the shares of each of the obligor companies (except for RM
plc), and the fixed and floating charge over all assets of the obligor companies granted previously to
Lenders, remains in place. Under the amended facility covenants have been reset as follows:
• A quarterly LTM EBITDA (excluding discontinued operations & Consortium) covenant test from February
2024 to November 2025, which is then replaced by a quarterly EBITDA leverage test and interest cover,
which are required to be below and above 4x respectively from February 2026; and
• A ‘hard’ liquidity covenant test requiring the Group to have liquidity greater than £7.5m on the last
business day of the month, and liquidity not be below £7.5m at the end of two consecutive weeks
within a month, with a step-down period applying from 15 September 2024 to 24 October 2024 and 1
January 2025 to 21 March 2025, during which the minimum liquidity requirement is reduced from £7.5m
to £5.0m.
Balance Sheet
The Group had net assets of £17.8m at 30 November 2023 (FY22: £60.6m). The balance sheet includes
non-current assets of £81.5m (FY22: £133.3m), of which £38.5m (FY22: £49.4m) is goodwill and £12.8m
(FY22: £24.0m) relates to the Group’s defined benefit pension scheme which is discussed further below.
Operating PPE, intangible and right-of-use assets total £27.8m (FY22: £57.8m) and includes acquired
brands, customer relationships and Intellectual property as well as costs relating to the warehouse
consolidation and IT implementation programme. The reduction during the year is largely due to the
impairment arising from the Group’s decision to close its loss-making RM Consortium business in November
2023 including £10.6m in respect of goodwill (see Note 10), £17.8m in respect of intangible assets and
£5.9m in respect of property, plant, and equipment.
IP Address assets utilised as part of the Connectivity business are included at £nil cost.
Net current assets of £8.9m (FY22: net current liabilities of £49.2m) includes borrowings of £nil (FY22:
£48.7m) following their reclassification to non-current liabilities during the year (see below) and a
number of lower balances predominately resulting from the IT systems implementation programme and the
closure of the RM Consortium business, including inventory, trade receivables and trade payables.
Non-current liabilities of £72.6m (FY22: £23.4m) includes borrowings of £53.7m (FY22: £nil) following the
reclassification from current liabilities during the year (see above) and lease liabilities of £14.3m
(FY22: £16.0m) which is predominately associated with the Group utilisation of properties.
Dividend
A condition of the previously extended and amended banking facility agreement remains the same, which was
to restrict dividend distribution until the Company has reduced its net debt to LTM EBITDA (post IFRS 16,
see note 13) leverage to less than 1x for two consecutive quarters, and therefore we are not currently
able to recommend the payment of a final dividend. The Board understands the importance of dividends to
our shareholders and are clear that reinstating the dividend is a key milestone on our recovery path.
RM plc is a non-trading investment holding Company and derives its profits from dividends paid by
subsidiary companies. The Company has £nil (FY22: £30.8m) distributable reserves as at 30 November 2023.
The Directors regularly review the Group’s capital structure and dividend policy, ahead of announcing
results and during the annual budgeting process, looking at longer-term sustainability. The Directors do
so in the context of the Company’s ability to execute the strategy and to invest in opportunities to grow
the business and enhance shareholder value.
The dividend policy is influenced by a number of the principal risks identified in the table of
‘Principal and Emerging Risks and Uncertainties’ detailed within the Group’s 2023 Annual Report which
could have a negative impact on the performance of the Group or its ability to distribute profits.
Pension
The Company operates two defined benefit pension schemes (“RM Education Scheme” and “Care Scheme”) and
participates in a third, multi-employer, defined benefit pension scheme (the “Platinum Scheme”). All
schemes are now closed to future accrual of benefits.
As set out in Note 16, the IAS19 net position (pre-tax) across the Group reduced by £10.2m to a surplus
of £12.4m (30 November 2022: £22.6m) with both the RM Education Scheme and the Platinum Scheme being in
surplus. The reduction has been driven by a decrease in the value of scheme assets more than offsetting
the positive impact of higher discount rates which are based on corporate bond yields.
The 31 May 2021 triennial valuation for the current schemes was completed in 2022, with the total scheme
deficit reducing from £46.5m to £21.6m. The deficit recovery payments of £4.4m per annum will continue
until the end of 2024, before reducing to £1.2m until the end of 2026 when recovery payments cease.
Internal Controls
During the year, the Group continued to evolve its control framework following the findings of previous
years, with specific focus on controls considered most important to reduce the risk of material
misstatements in these accounts. These included supplier statement reconciliations, controls over revenue
recognition and balance sheet reconciliations.
The Audit and Risk Committee is being updated regularly with respect to progress related to remediation
activities as well as reviewing ongoing control improvements identified. Because a number of controls are
only in place from the balance sheet date, no reliance has been placed on those controls for the audit.
The Committee has assessed that the Group still relies on controls that require enhanced documentation
and formalisation, and in specific areas, redesign. The control improvement plan is ongoing, and the
Committee is engaged in ensuring that management have the appropriate resource and an appropriate
remediation timeline.
Management have provided the committee with assurance that where controls were not designed, implemented
or operating effectively there were appropriate mitigating actions in place to conclude that the
Financial Statements do not contain material errors.
Going concern
The Financial Statements have been prepared on a going concern basis which the Directors consider to be
appropriate for the following reasons.
The Directors have prepared cash flow forecasts for the period to the end of March 2025 which indicate
that taking into account reasonably plausible downsides as discussed below, the Company is expected to
comply with all debt covenants in place and will have sufficient funds to meet its liabilities as they
fall due for at least 12 months from the date of this report.
In assessing the going concern position the Directors have considered the balance sheet position as
included on page 20, the headroom to the hard liquidity covenant within the Banking Agreement, and
compliance with the LTM EBITDA covenant. Exceeding the hard liquidity or the LTM EBITDA covenant would
constitute a material breach of the agreement and consequently the facility would be repayable on demand.
As at 30 November 2023, the Group had adjusted net debt of £45.6m (2022: £46.8m) and drawn facilities of
£55.0m (2022: £49.0m). Average adjusted net debt over the year to 30 November 2023 was £55.9m (2022:
£46.8m) with a maximum borrowings position of £64.8m (2022: £64.1m). The drawn facilities are expected to
fluctuate over the period considered for going concern, but remain within the covenants, and are not
anticipated to be fully repaid in this period.
Since the year end, the Group has secured an agreement with Lenders, as detailed above.
The Chief Financial Officer’s statement outlines the performance of the Group in the year to 30 November
2023.
This statement highlights the material impact of the ongoing issues within the Consortium brand and
underperformance relative to prior year forecasts in both the RM Technology and TTS businesses.
For going concern purposes, the Group has assessed a base case scenario that assumes no significant
downturn in UK or International markets from that experienced in the year to 30 November 2023 and assumes
a broadly similar macroeconomic environment to that currently being experienced.
Revenue growth in the base case is driven from the following key areas:
• Growth from existing customers and new customer wins in the Assessment division;
• Increased hardware and infrastructure revenues in the Technology division, including further wins under
the UK government’s Connect the Classroom programme; and
• Growth from UK sales and international partnerships, where the base case assumes an increase in market
share through customer wins and new product launches as well as higher average order values, in the
Resources
business.
Operating profit margin growth in the base case includes, in addition to the revenue assumptions outlined
above, annualised savings benefit from restructuring programmes commenced in the year to 30 November
2023. As the target operating model changes did not commence until 2024 the impact of these changes are
not captured in the base case, rather these are incorporated as an upside in the reasonable worst-case
scenario. Net debt is not expected to reduce within the assessment period, as the conversion of profits
will be offset by further capital investment, interest and pension payments.
As part of the Group’s business planning process, the Board has closely monitored the Group’s financial
forecasts, key uncertainties, and sensitivities. As part of this exercise, the Board has reviewed a
number of scenarios, including the base case and reasonable worst case downside scenarios. The aggregate
impact of reasonably plausible downsides has been taken together to form a reasonable worst-case scenario
that removes a number of the growth assumptions from the base case including:
• In the Assessment division, a reduction in revenue arising because of:
• A faster runoff of one key contract which has not been renewed;
• New contract wins not at preferred bidder status reduced by 50%; and
• One-off revenues associated with changing terms on a large multi-year contract delayed to FY25.
• In the Technology division: aligning forecast hardware sales with the average of the last five years,
rather than the future growth assumed in the base case, and reducing contract renewal rates by 5%.
• In the Resources division:
• UK market share growth does not occur, market continues to decline and revenues delivered by new
products are reduced by 50%;
• No growth in international revenues; and
• Increases in costs associated with new product development, carriage, and an inability to pass
on 1.5% of inflationary increases.
The reasonable worst downside case scenarios have the following impact on the base case budget:
• 2024: A revenue reduction of £31.2m, an EBITDA reduction of £8.2m, and cash reduction of £7.5m.
• 2025: A revenue reduction of £41.5m, an EBITDA reduction of £8.4m, and cash reduction of £6.0m.
While the Board believes that all reasonable worst case downside scenarios occurring together is highly
unlikely,
the Group would continue to comply with covenants under the facility, albeit in February 2025 there would
be no headroom on the LTM EBITDA covenant, and in December 2024 limited headroom on the hard liquidity
covenant. The Board’s assessment of the likelihood of a further downside scenario is remote. Management
have undertaken reverse stress testing that demonstrates that even if no sales are made by the TTS
business in the month of May 2024, the covenants would still be complied with for that quarter.
The Board has also considered a number of mitigating actions which could be enacted, if necessary, to
ensure that reasonable headroom against the facility is maintained in reasonable worst cases and the
Group complies with covenants. These mitigating actions include not paying discretionary bonuses, the
sale of further IP licences, and extending payment terms with key suppliers, albeit at a much lower level
for the latter than were taken in FY23. These are actions that the Group has taken before and therefore
the Board are confident of their ability to deliver these mitigating actions if required. Further actions
could include reduction in capital expenditure and delaying recruitment. These actions are expected to
have little to no implications to the ongoing business in the going concern period.
Therefore, the Board has a reasonable expectation that the Company has adequate resources to continue in
operational existence and meet its liabilities as they fall due for a period of not less than 12 months
from the date of approval of these Financial Statements, having considered both the availability of
financial facilities and the forecast liquidity and expected future covenant compliance. For this reason,
the Company continues to adopt the going concern basis of accounting in preparing the annual Financial
Statements.
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. Risk management systems are monitored on
an ongoing basis. The principal risks and uncertainties will be detailed within the Group’s 2023 Annual
Report, which will be issued in April 2024.
Directors’ Responsibility Statement
The 2023 Annual Report and Accounts which will be issued in April 2024, contains a responsibility
statement in compliance with DTR 4.1.12 of the Listing Rules which sets out that as at the date of
approval of the Annual Report on 14 March 2024, the Directors’ confirm to the best of their knowledge:
• the Group and unconsolidated Company financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets, liabilities, financial position
and profit or loss of the Group and Company, and the undertakings included in the consolidation taken
as a whole; and
• the performance review contained in the Annual Report and Accounts includes a fair review of the
development and performance of the business and the position of the Group and the undertakings
including the consolidation taken as a whole, together with a description of the principal risks and
uncertainties they face.
Mark Cook Simon Goodwin
Chief Executive Officer Chief Financial Officer
14 March 2024
CONSOLIDATED INCOME STATEMENT
Year ended 30 November 2023 Year ended 30 November 2022 (Restated)
Adjusted Adjustments Total Adjusted Adjustments Total
Note £000 £000 £000 £000 £000 £000
Continuing operations
Revenue 2 195,186 - 195,186 214,167 - 214,167
Cost of sales (129,103) - (129,103) (145,663) - (145,663)
Gross profit 66,083 - 66,083 68,504 - 68,504
Operating expenses (66,612) (7,905) (74,517) (60,171) (26,833) (87,004)
Expected credit loss 840 - 840 (850) - (850)
Impairment losses - (38,949) (38,949) - (2,236) (2,236)
Profit/(loss) from
311 (46,854) (46,543) 7,483 (29,069) (21,586)
operations
Finance income 4 1,105 - 1,105 614 - 614
Other income 2 - 10,785 10,785 - 3,010 3,010
Finance costs 5 (6,585) - (6,585) (2,825) - (2,825)
(Loss)/profit before tax (5,169) (36,069) (41,238) 5,272 (26,059) (20,787)
Tax 6 (8,072) 6,002 (2,070) (1,760) 6,458 4,698
Loss/(profit) for the year (13,241) (30,067) (43,308) 3,512 (19,601) (16,089)
from continuing operations
Discontinued operations 7 760 13,444 14,204 1,590 - 1,590
Loss)/profit for the year (12,481) (16,623) (29,104) 5,102 (19,601) (14,499)
Earnings per ordinary share
on continuing operation
8
- basic (15.9)p (52.0)p 4.2p (19.3)p
- diluted (15.8)p (51.8)p 4.2p (19.3)p
Earnings per ordinary share
on discontinuing operations
8
- basic 0.9p 17.1p 1.9p 1.9p
- diluted 0.9p 17.0p 1.9p 1.9p
Earnings per ordinary share
on total operations
8
- basic (15.0)p (34.9)p 6.1p (17.4)p
- diluted (14.9)p (34.8)p 6.0p (17.4)p
Paid and proposed
dividends per share 9
- Interim - -
- Final - -
The prior year restatement is detailed in Note 17.
Throughout this statement, adjusted profit and EPS measures are stated after adjusting items which are
identified by virtue of their size, nature and/or incidence. The treatment of adjusted items is applied
consistently period on period and are used by the Board to monitor and manage the performance of the
Group (see Note 3 for details).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 November 2023 30 November 2022
Note £000 £000
Loss for the year (29,104) (14,499)
Items that will not be reclassified subsequently to profit or loss
Defined benefit pension scheme remeasurements1 16 (15,771) (12,157)
Tax on items that will not be reclassified subsequently to profit 6 2,790 2,914
or loss
Items that are or may be reclassified subsequently to profit or
loss
Fair value (loss)/gain on hedged instruments (402) 4
Fair value gain/(loss) on hedged instruments transferred to the 272 (444)
income statement
Tax on items that are or may be reclassified subsequently to 6 - 11
profit or loss2
Exchange (loss)/gain on translation of overseas operations (287) 301
Other comprehensive expense (13,398) (9,371)
Total comprehensive expense attributable to owners of the parent (42,502) (23,870)
1 Year ended 30 November 2023 includes £15,771,000 expense (2022:£12,846,000 expense) in respect of
defined benefit pension schemes (see note 16(c)) and £nil (2022: £689,000 gain) in respect of Local
Government Pension Schemes (see Note 16(b)).
2 Principally includes the impact of the Group’s cash flow hedges deferred to other comprehensive income
during the year.
CONSOLIDATED BALANCE SHEET
At 30 November 2023 At 30 November 2022
Note £’000 £’000
Non-current assets
Goodwill 10 38,538 49,401
Other intangible assets 5,224 25,510
Property, plant and equipment 8,271 15,892
Right-of-use asset 14,275 16,364
Defined benefit pension scheme surplus 16 12,796 23,959
Other receivables 11 240 290
Contract fulfilment assets 1,959 1,713
Deferred tax assets 6 170 174
81,473 133,303
Current assets
Inventories 13,959 26,359
Trade and other receivables 11 32,333 36,203
Contract fulfilment assets 1,949 1,727
Assets held for sale 7 - 418
Tax assets 1,988 2,733
Cash and cash equivalents 8,062 1,911
58,291 69,351
Total assets 139,764 202,654
Current liabilities
Trade and other payables 12 (46,372) (65,639)
Provisions 14 (2,993) (2,142)
Borrowings 13 - (48,728)
Liabilities directly associated with assets classified as 7 - (2,082)
held for sale
(49,365) (118,591)
Net current assets/(liabilities) 8,926 (49,240)
Non-current liabilities
Lease liabilities 12 (14,297) (15,998)
Other payables 12 (2,463) (3,096)
Provisions 14 (1,749) (666)
Deferred tax liability 6 - (2,306)
Defined benefit pension scheme obligation 16 (411) (1,354)
Borrowings 13 (53,651) -
(72,571) (23,420)
Total liabilities (121,936) (142,011)
Net assets 17,828 60,643
Equity attributable to shareholders
Share capital 15 1,917 1,917
Share premium account 27,080 27,080
Own shares (444) (444)
Capital redemption reserve 94 94
Hedging reserve (393) (263)
Translation reserve (868) (581)
Retained earnings (9,558) 32,840
Total equity 17,828 60,643
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Own Capital Hedging Translation Retained
capital premium shares redemption reserve2 reserve3 earnings Total
reserve1
Note £000 £000 £000 £000 £000 £000 £000 £000
At 1 December 2021 1,917 27,080 (444) 94 177 (882) 59,029 86,971
Loss for the year - - - - - - (14,499) (14,499)
Other comprehensive - - - - (440) 301 (9,232) (9,371)
(expense)/income
Total comprehensive - - - - (440) 301 (23,731) (23,870)
(expense)/income
Transactions with owners of
the Company:
Share-based payment fair
value charges - - - - - - 40 40
Ordinary dividends paid 9 - - - - - - (2,498) (2,498)
At 30 November 2022 1,917 27,080 (444) 94 (263) (581) 32,840 60,643
Loss for the year - - - - - - (29,104) (29,104)
Other comprehensive income - - - - (130) (287) (12,981) (13,398)
Total comprehensive income - - - - (130) (287) (42,085) (42,502)
Transactions with owners of
the Company:
Share-based payment fair - - - - - - (364) (364)
value charges
Share-based payment - tax - - - - - - 11 11
Unclaimed dividends - - - - - - 40 40
At 30 November 2023 1,917 27,080 (444) 94 (393) (868) (9,558) 17,828
1 The capital redemption reserve arose from the repurchase of issued share capital. It is not
distributable.
2 The Group hedging reserve arises from cash flow hedges entered into by the Group. The reserve is
distributable in the entities in which it arises unless it relates to unrealised gains.
3 The Group translation arises on consolidation from the unrealised movement of foreign exchange on the
net assets of overseas entities. This reserve is not distributable.
CONSOLIDATED CASH FLOW STATEMENT
At 30 November 2023 At 30 November 2022
Note £’000 £’000
Loss before tax from continuing operations (41,238) (20,787)
Profit before tax from discontinuing operations 14,204 1,590
Gain on disposal of intangible licences 3 (10,614) (2,791)
Gain on disposal of property 3 - (221)
Gain on disposal of operations (13,615) -
Finance income 4 (1,105) (612)
Finance costs 5 6,585 2,825
Loss from operations, including discontinued operations (45,783) (19,996)
Adjustments for:
Amortisation and impairment of intangible assets 31,050 4,354
Depreciation and impairment of property, plant and equipment 11,564 5,149
Impairment of inventory and other current assets 4,476 -
Utilisation of contract fulfilment asset 2,513 2,326
(Gain)/loss on disposal of property, plant and equipment (265) 41
Loss/(gain) on foreign exchange 570 (648)
Share-based payment(credit)/charge (364) 40
Increase in provisions 3,825 1,469
Defined benefit pension scheme administration cost 14 6 8
Operating cash flows before movements in working capital 7,592 (7,257)
Decrease/(increase) in inventories 8,624 (7,304)
Decrease/(increase) in receivables 2,804 (4,095)
Increase in contract fulfilment assets (3,035) (2,920)
(Decrease)/increase in trade and other payables (17,844) 5,517
Utilisation of provisions (2,824) (1,514)
Cash used by operations (4,683) (17,573)
Cash from settlement of derivative instruments (879) 444
Defined benefit pension scheme cash contributions 16 (4,496) (4,537)
Tax (paid)/credit (397) 880
Net cash used by operating activities (10,455) (20,786)
Investing activities
Interest received 9 3
Proceeds on disposal of intangible licences 10,745 2,791
Proceeds on disposal of property, plant and equipment 300 3,299
Proceeds on sale of operations 10,899 -
Purchases of property, plant and equipment (642) (1,575)
Purchases of other intangible assets (457) (3,627)
Net cash generated from investing activities 20,854 891
Financing activities
Dividends unclaimed/(paid) 40 (2,498)
Drawdown of borrowings 13 30,167 73,000
Repayment of borrowings 13 (24,167) (44,000)
Borrowing facilities arrangement and commitment fees (1,716) (436)
Interest paid (4,955) (2,312)
Payment of leasing liabilities – capital element (3,179) (3,114)
Payment of leasing liabilities – interest element (331) (347)
Net cash (used by)/generated from financing activities (4,141) 20,293
Net increase in cash and cash equivalents 6,258 398
Cash and cash equivalents at the beginning of the year 1,911 1,478
Effect of foreign exchange rate changes (107) 35
Cash and cash equivalents at the end of the year 8,062 1,911
Bank overdraft - -
Cash at bank 8,062 1,911
Cash and cash equivalents at the end of the year 8,062 1,911
1. Preliminary announcement
The consolidated preliminary results are based on International Financial Reporting Standards (IFRS) as
adopted by the EU and were also in accordance with international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
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 9 May 2024. 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 2023. Statutory accounts for 2022 have been delivered
to the Registrar of Companies and those for 2023 will be delivered following the Company's Annual General
Meeting.
The 2022 statutory accounts have been restated to reflect a revised split of cost of sales and operating
expenses to improve the presentation and comparability of results as set out in Note 17. The auditor’s
reports on both the 2023 and 2022 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.
This Preliminary announcement was approved by the Board of Directors on 14 March 2024.
Consolidated Income Statement presentation
The Directors assess the performance of the Group using an adjusted operating profit and profit before
tax. The Board believes that presentation of the Group results in this way is relevant to an
understanding of the Group’s financial performance (and that of each segment). Underlying performance
excludes adjusted items which are identified by virtue of their size, nature and/or incidence. The
treatment of adjusted items is applied consistently period on period. This presentation is consistent
with the way that financial performance is measured by management, reported to the Board, the basis of
financial measures for senior management’s compensation schemes and assists in providing supplementary
information that assists the user to understand the underlying financial performance, position and trends
of the Group. Further details are provided in Note 3.
Basis of preparation
The Financial Statements have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006. They are prepared on a historical cost basis
except for certain financial instruments, share-based payments and pension assets and liabilities which
are measured at fair value. In addition, assets held for sale are stated at the lower of previous
carrying amount and the fair value less costs to sell. 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.
The application of these new standards and amendments is not expected to have a material impact on the
Group.
Going concern
The Financial Statements have been prepared on a going concern basis which the Directors consider to be
appropriate for the following reasons.
The Directors have prepared cash flow forecasts for the period to the end of March 2025 which indicate
that taking into account reasonably plausible downsides as discussed below, the Company is expected to
comply with all debt covenants in place and will have sufficient funds to meet its liabilities as they
fall due for at least 12 months from the date of this report.
In assessing the going concern position the Directors have considered the balance sheet position as
included on page 20, the headroom to the hard liquidity covenant within the Banking Agreement, and
compliance with the LTM EBITDA covenant. Exceeding the hard liquidity or the LTM EBITDA covenant would
constitute a material breach of the agreement and consequently the facility would be repayable on demand.
At 30 November 2023, the Group had adjusted net debt of £45.6m (2022: £46.8m) and drawn facilities of
£55.0m (2022: £49.0m). Average adjusted net debt over the year to 30 November 2023 was £55.9m (2022:
£46.8m) with a maximum borrowings position of £64.8m (2022: £64.1m). The drawn facilities are expected to
fluctuate over the period considered for going concern, but remain within the covenants, and are not
anticipated to be fully repaid in this period.
As set out in note 13, RM Group had a £70.0m (2022: £70.0m) committed bank facility (the facility) at 30
November 2023. At the date of this report, the Group has secured an agreement with Lenders, which extends
the existing £70.0m facility to July 2026. This agreement is secured against the shares of each of the
obligor companies (except for RM plc) and by way of a fixed and floating charge over all assets of the
obligors, and has reset the covenants under the facility. For going concern purposes the Board have
assessed performance against the following covenants:
• A quarterly LTM EBITDA (excluding discontinued operations) covenant test from February 2024 to
November 2025, which is then replaced by a quarterly EBITDA leverage test and interest cover, which
are required to be below and above 4x respectively from February 2026; and
• A ‘hard’ liquidity covenant test requiring the Group to have liquidity greater than £7.5m on the last
business day of the month, and liquidity not be below £7.5m at the end of two consecutive weeks
within a month, with a step-down period applying from 15 September 2024 to 24 October 2024 and 1
January 2025 to 21 March 2025, during which the minimum liquidity requirement is reduced from £7.5m
to £5.0m.
The Chief Financial Officer’s statement outlines the performance of the Group in the year to 30 November
2023.
This statement highlights the material impact of the ongoing issues within the Consortium brand and
underperformance relative to prior year forecasts in both the RM Technology and TTS businesses.
For going concern purposes, the Group has assessed a base case scenario that assumes no significant
downturn in UK or International markets from that experienced in the year to 30 November 2023 and assumes
a broadly similar macroeconomic environment to that currently being experienced.
Revenue growth in the base case is driven from the following key areas:
• Growth from existing customers and new customer wins in the Assessment division;
• Increased hardware and infrastructure revenues in the Technology division, including further wins
under the UK government’s Connect the Classroom programme; and
• Growth from UK sales and international partnerships, where the base case assumes an increase in
market share through customer wins and new product launches as well as higher average order values,
in the Resources
business.
Operating profit margin growth in the base case includes, in addition to the revenue assumptions outlined
above, annualised savings benefit from restructuring programmes commenced in the year to 30 November
2023. As the target operating model changes did not commence until 2024 the impact of these changes are
not captured in the base case, rather these are incorporated as an upside in the reasonable worst-case
scenario. Net debt is not expected to reduce within the assessment period, as the conversion of profits
will be offset by further capital investment, interest and pension payments.
As part of the Group’s business planning process, the Board has closely monitored the Group’s financial
forecasts, key uncertainties, and sensitivities. As part of this exercise, the Board has reviewed a
number of scenarios, including the base case and reasonable worst case downside scenarios. The aggregate
impact of reasonably plausible downsides has been taken together to form a reasonable worst-case scenario
that removes a number of the growth assumptions from the base case including:
• In the Assessment division, a reduction in revenue arising because of:
◦ A faster runoff of one key contract which has not been renewed;
◦ New contract wins not at preferred bidder status reduced by 50%; and
◦ One-off revenues associated with changing terms on a large multi-year contract delayed to FY25.
• In the Technology division: aligning forecast hardware sales with the average of the last five years,
rather than the future growth assumed in the base case, and reducing contract renewal rates by 5%.
• In the Resources division:
◦ UK market share growth does not occur, market continues to decline and revenues delivered by new
products are reduced by 50%;
◦ No growth in international revenues; and
◦ Increases in costs associated with new product development, carriage, and an inability to pass
on 1.5% of inflationary increases.
The reasonable worst downside case scenarios have the following impact on the base case budget:
• 2024: A revenue reduction of £31.2m, an EBITDA reduction of £8.2m, and cash reduction of £7.5m.
• 2025: A revenue reduction of £41.5m, an EBITDA reduction of £8.4m, and cash reduction of £6.0m.
While the Board believes that all reasonable worst case downside scenarios occurring together is highly
unlikely, the Group would continue to comply with covenants under the facility, albeit in February 2025
there would be no headroom on the LTM EBITDA covenant, and in December 2024 limited headroom on the hard
liquidity covenant. The Board’s assessment of the likelihood of a further downside scenario is remote.
Management have undertaken reverse stress testing that demonstrates that even if no sales are made by the
TTS business in the month of May 2024, the covenants would still be complied with for that quarter.
The Board has also considered a number of mitigating actions which could be enacted, if necessary, to
ensure that reasonable headroom against the facility is maintained in reasonable worst cases and the
Group complies with covenants. These mitigating actions include not paying discretionary bonuses, the
sale of further IP licences, and extending payment terms with key suppliers, albeit at a much lower level
for the latter than were taken in FY23. These are actions that the Group has taken before and therefore
the Board are confident of their ability to deliver these mitigating actions if required. Further actions
could include reduction in capital expenditure and delaying recruitment. These actions are expected to
have little to no implications to the ongoing business in the going concern period.
Therefore, the Board has a reasonable expectation that the Company has adequate resources to continue in
operational existence and meet its liabilities as they fall due for a period of not less than 12 months
from the date of approval of these Financial Statements, having considered both the availability of
financial facilities and the forecast liquidity and expected future covenant compliance. For this reason,
the Company continues to adopt the going concern basis of accounting in preparing the annual Financial
Statements.
Significant accounting policies
The accounting policies used for the preparation of this announcement have been applied consistently.
Alternative Performance Measures (APMs)
In response to the Guidelines on APMs issued by the European Securities and Markets Authority (ESMA) and
the Financial Reporting Council (FRC), additional information on the APMs used by the Group is provided
below. The following APMs are used by the Group:
• Adjusted profit from operations
• Adjusted operating margin
• Adjusted profit before tax
• Adjusted tax
• Adjusted profit after tax
• Adjusted earnings per share
• Adjusted diluted earnings per share
• Adjusted cash conversion
• EBITDA
• Adjusted net debt
• Average adjusted net debt
Further explanation of what each APM comprises and reconciliations between Statutory reported measures
and adjusted measures are shown in Note 3.
The Board believes that presentation of the Group results in this way is relevant to an understanding of
the Group’s financial performance (and that of each segment). These are items which are identified by
virtue of either their size or their nature to be important to understanding the performance of the
business including the comparability of the results year-on-year. The treatment of adjusted items is
applied consistently period on period. This presentation is consistent with the way that financial
performance is measured by management, reported to the Board, the basis of financial measures for senior
management’s compensation schemes and provides supplementary information that assists the user to
understand the underlying financial performance, position and trends of the Group.
The APMs used by the Group are not defined terms under IFRS and may therefore not be comparable with
similarly titled measures reported by other companies. They are not intended to be a substitute for, or
superior to, GAAP measures. All APMs relate to the current year results and comparative periods where
provided.
2. Operating Segments
The Group's business is supplying products, services and solutions to the UK and international education
markets. The Chief Executive is the Chief Operating Decision Maker. Information reported to the Group's
Chief Executive for the purposes of resource allocation and assessment of segmental performance is
focused on the nature of each type of activity.
The Group was historically structured into three operating Divisions: RM Resources, RM Assessment and RM
Technology, however, following the decision by management to separately monitor the results of the
Consortium and TTS brands in June 2023, the previously reported RM Resources segment has been allocated
between the RM TTS segment, which continues to be operated by the Group, and the RM Consortium segment
which is being closed. Prior year revenue and adjusted operating profit/(loss) comparatives have been
restated accordingly.
The Chief Operating Decision Maker reviews segments at an adjusted operating profit level and adjustments
are not allocated to segments. Adjustments includes the impairment of intangible assets as set out in
Note 3, which is not allocated by segment nor may be broken out by segment.
A full description of each revenue-generating Division, together with comments on its performance and
outlook, is given in the Strategic Report. Corporate Services consists of central business costs
associated with being a listed company and non-division-specific pension costs.
This Segmental analysis shows the result and assets of these Divisions. Revenue is that earned by the
Group from third parties. Net financing costs and tax are not allocated to segments as the funding, cash
and tax management of the Group are activities carried out by the central treasury and tax functions.
Segmental results
Year ended RM Corporate
RM Consortium RM Assessment RM Technology Services Total
30 November 2023 TTS1
£000 £000 £000 £000 £000 £000
Revenue
UK 52,229 19,300 24,756 57,545 - 153,830
Europe 12,757 - 10,315 86 - 23,158
North America 4,722 - 131 32 - 4,885
Asia 1,049 - 1,219 - - 2,268
Middle East 3,730 - 157 - - 3,887
Rest of the world 1,397 - 5,761 - - 7,158
75,884 19,300 42,339 57,663 - 195,186
Adjusted profit/(loss) from 5,946 (9,679) 10,252 749 (6,960) 311
operations
Finance income 1,105
Finance costs (6,585)
Adjusted loss before tax (5,169)
Adjustments (see Note 3) (36,069)
Loss before tax (41,238)
1 Included in UK are International Sales via UK Distributors of £755,000.
Year ended RM
RM Consortium RM Assessment RM Technology Corporate Services Total
30 November 2022 TTS1
(Restated) £000 £000 £000 £000 £000 £000
Revenue
UK 58,232 33,707 23,324 59,416 - 174,679
Europe 12,907 12 8,153 71 - 21,143
North America 3,555 - 142 1,374 - 5,071
Asia 879 1 1,299 - - 2,179
Middle East 3,284 21 167 - - 3,472
Rest of the world 1,762 6 5,855 - - 7,623
80,619 33,747 38,940 60,861 - 214,167
Adjusted profit/(loss) from 7,817 (5,006) 7,378 2,173 (4,879) 7,483
operations
Finance income 614
Finance costs (2,825)
Adjusted profit before tax 5,272
Adjustments (see Note 3) (26,059)
Loss before tax (20,787)
1 Included in UK are International Sales via UK Distributors of £687,000.
Segmental assets
RM RM
At 30 November 2023 RM Assessment RM Technology Corporate Services Total
TTS Consortium
£000 £000 £000 £000 £000 £000
Segmental 28,286 17,353 15,067 16,158 39,617 116,481
Other 23,283
Total assets 139,764
RM RM
At 30 November 2022 RM Assessment RM Technology Corporate Services Total
TTS Consortium
£000 £000 £000 £000 £000 £000
Segmental 33,373 61,499 16,315 10,936 51,640 173,763
Other 28,891
Total assets 202,654
Included within the disclosed segmental assets are non-current assets (excluding defined benefit pension
surplus and deferred tax assets) of £61.7m (2022: £109.1m) located in the United Kingdom, £5.8m (2022:
£9.0m) located in Australia and £1.0m (2022: £1.0m) located in India. Other non-segmented assets include
defined benefit pension surplus, other receivables, tax assets and cash and short-term deposits. Goodwill
is included within the Corporate Services segment. Consortium segmental assets include a leased warehouse
which has been repurposed to be used by TTS after the year-end.
3. Alternative Performance Measures
As set out in Note 1, the Group uses alternative performance measures that the Board believes reflects
the trading performance of the Group, and it is these adjusted measures that the Board use as the primary
measures of performance measurement during the year.
Year ended Year ended
30 November 2023 30 November 2022
£000 £000
Adjustments to operating expenses
Amortisation of acquisition-related intangible assets 1,691 1,839
Impairment of RM Consortium assets1 (a) 38,949 -
Restructuring costs (b) 2,678 254
Configuration of SaaS licences (ERP) (c) 3,063 17,355
Independent business review related costs (d) 473 -
Dual running costs related to investment strategy (e) - 5,372
Impairment of ERP solution (f) - 2,236
Onerous provision for IS licences (g) - 1,168
Disposal related costs (k) - 845
Total adjustments to operating expenses 46,854 29,069
Other income
Sale of IP addresses (h) (10,614) (2,791)
Gain on disposal of operations (i) (171) -
Gain on sale of property (j) - (219)
Total adjustments to other income (10,785) (3,010)
Total adjustments 36,069 26,059
Tax impact (Note 6) (6,002) (6,458)
Total adjustments after tax – continuing operations 30,067 19,601
Gain on disposal of discontinued operations (k) (13,444) -
Total adjustments after tax 16,623 19,601
1. Includes £10,575,000 of goodwill impairment (see Note 10), £17,431,000 of impairment of other
intangible assets, £5,881,000 of impairment of property, plant and equipment, £2,827,000 of inventory
write downs, £737,000 write off of other current assets and an onerous contract provision of
£1,498,000 in respect of IT licences. See (a) below for further details.
Adjusted items:
These are items which are identified by virtue of either their size or their nature to be important to
understanding the performance of the business including the comparability of the results year on year.
These items can include, but are not restricted to, impairment; gain on held-for-sale assets and related
transaction costs; changes in the provision for exceptional property costs; the gain/loss on sale of
operations; and restructuring and acquisition costs.
During the year ended 30 November 2023, the Group announced the closure of the RM Consortium business and
the consequent termination of the Group’s ERP programme which had formed part of the Group's 2018
warehouse strategy to transfer all its previous warehouse operations into one new automated warehouse
together with an interlinked ERP solution which was planned to be rolled out to the whole Group. The
Group believes that the size, complexity and number of unusual costs associated with these developments,
were material to the understanding of the trading performance of the business including the comparability
of results year-on-year. As a result, all significant costs relating to these developments have also been
treated as an adjustment to profit, consistently period to period.
The amortisation of acquisition related intangible assets is an annual recurring adjustment to profit
that is a non-cash charge arising from historical investing activities. This adjustment is made to
clearly highlight the amounts relating to historical acquisitions and is in common with peer companies
across the technology sector. The income generated from the use of these intangible assets is, however,
included in the adjusted profit measures.
The following costs and income were identified as adjusted items:
a. Following the announcement of the closure of the Consortium business and the subsequent termination
of the ERP replacement programme, management performed an impairment review resulting in the Group
recognising a total impairment charge of £38.9m including £10.6m of goodwill relating to the RM
Consortium business (see Note 10), £17.4m of intangible assets including all remaining Consortium
brand and ERP assets, £5.9m of property, plant and equipment at the RM Consortium warehouse, £2.8m of
RM Consortium inventory write downs to net realisable value, £0.7m of other current assets and an
onerous contract provision of £1.5m in respect of IT licences associated with the Group’s ERP
solution.
b. Restructuring costs of £2.7m (2022: £0.3m) of which £0.8m related to the Group’s decision to close
the RM Consortium business.
c. The configuration and customisation costs relating to the ERP replacement programme, which have been
expensed in accordance with IAS 38: Intangible Assets and IFRIC agenda decisions but have been
treated as adjusting items as they were a significant component of the Group’s warehouse strategy.
These costs total £2.7m (2022: £17.4m) based on the development work undertaken.
d. Independent Business Review related costs totalling £0.5m (2022: £nil) undertaken on behalf of the
lenders and pension scheme.
e. Dual running costs in 2022 of £5.4m related to the Group’s warehouse strategy, which became fully
operational that year. Costs included £2.8m associated with the new warehouse including items such as
utilities, security and increased warehouse staff to test the new facility and to transfer inventory
and £2.6m of IT costs (excluding configuration costs of SaaS licences) being expensed that relate to
running of IT systems not yet in use.
f. In 2022, the Group impaired £2.2m of ERP replacement programme costs, previously capitalised within
the RM Technology Division, which related to functionality that was paused and where the Group had no
active plans to proceed to implement.
g. In 2022, the Group recognised an onerous contract provision of £1.2m in respect of IT licences
associated with its ERP solution.
h. Income generated following the completion of the sale of IP addresses totalling £10.6m (2022: £2.8m).
i. Gain on disposal of operations of £0.2m (2022: £nil) following the completion of the iCase business
disposal.
j. In 2022, the Group disposed of a warehouse that was no longer required following the estates strategy
review. This warehouse sale generated proceeds of £3.3m and a profit after direct selling costs and
costs of moving from the warehouse of £0.2m.
k. During the year ended 30 November 2023, the Group completed the disposal of the RM Integris and RM
Finance business which generated a gain on sale of operations of £13.4m (2022: loss of £0.8m)
representing proceeds of £15.3m (2022: £nil) less £1.9m (2022: £0.8m) of costs associated with the
disposal.
Adjusted net debt of £45.6m (2022: £46.8m) is the total of borrowings less capitalised fees of £53.7m
(2022: £48.7m) and cash at bank of £8.1m (2022: £1.9m). Lease liabilities of £16.5m (2022: £19.1m) are
excluded from this measure as they are not included in the measurement of adjusted net debt for the
purpose of covenant calculations. Adjusted net debt is a key metric measured by management as it is used
in covenant calculations. The details of the covenant calculations are set out in Note 13.
Average adjusted net debt is calculated by taking the adjusted net debt on a daily basis and dividing by
number of days.
The above adjustments have the following impact on the cash flow statement:
Year ended 30 November 2023 Year ended 30 November 2022
Statutory Adjustment Adjusted cash Statutory Adjustment Adjusted cash
Measure flows Measure flows
£000 £000 £000 £000 £000 £000
(Loss)/profit before tax (41,238) (36,069) (5,169) (20,787) (26,059) 5,272
(Loss)/profit from operations (46,543) (46,854) 311 (21,586) (29,069) 7,483
Cash consumed by operations (4,683) (5,107) 424 (17,129) (24,480) 7,351
Net cash used by operating (10,455) (5,107) (5,348) (20,786) (24,480) 3,694
activities
Net cash generated from investing 20,854 24,218 (3,364) 891 (1,403) (512)
activities
Net cash used by financing (4,141) - (4,141) 20,293 - 20,293
activities
Net increase in cash and cash 6,258 19,111 (12,853) 398 23,077 23,475
equivalents
The adjustments have the following impact on key metrics:
Year ended 30 November 2023 Year ended 30 November 2022
(Restated)
Statutory Adjustment Adjusted Statutory Adjustment Adjusted
Measure measure Measure measure
£000 £000 £000 £000 £000 £000
Gross profit 66,083 - 66,083 68,504 - 68,504
(Loss)/profit from (46,543) (46,854) 311 (21,586) (29,069) 7,483
operations
Operating margin (%) (23.8)% (24.0)% 0.2% (10.1)% (13.6)% 3.5%
Adjusted EBITDA (3,383) (10,372) 6,989 (12,083) (24,994) 12,911
(Loss)/profit before (41,238) (36,069) (5,169) (20,787) (26,059) 5,272
tax
Tax (2,070) 6,002 (8,072) 4,698 6,458 (1,760)
(Loss)/profit after tax (43,308) (30,067) (13,241) (16,089) (19,601) 3,512
Earnings per share (see
Note 8)
Basic (Pence) (52.0) (15.9) (19.3) 4.2
Diluted (Pence) (51.8) (15.8)) (19.3) 4.2
Adjusted operating profit is defined as the profit from continuing operations before excluding the
adjustments referred to above. Operating margin is defined as the operating profit as a percentage of
revenue.
Adjusted EBITDA is defined as the profit from operations before impairment, amortisation and depreciation
costs including £10,575,000 of goodwill impairment (see Note 10), £17,431,000 of impairment of other
intangible assets, £2,686,000 of amortisation of other intangible assets, £5,881,000 of impairment of
property, plant and equipment, £2,448,000 of depreciation of property, plant and equipment and £3,235,000
of depreciation of right-of-use assets.
The impact of tax is set out in Note 6.
4. Finance income
Year ended Year ended
30 November 2023 30 November 2022
Note £000 £000
Bank interest 9 5
Other finance income 5 2
Total income from financial assets measured at amortised cost 14 7
Net investment income on defined benefit pension scheme 16 1,091 607
1,105 614
5. Finance costs
Year ended Year ended
30 November 2023 30 November 2022
Note £000 £000
Borrowing facilities arrangement fees and commitment fees 491 425
Unwinding of discount on provisions 14 89 -
Net finance costs on defined benefit pension scheme 16 - 39
Foreign exchange 441 -
Interest on lease liabilities 330 347
Interest on bank loans and overdrafts 5,234 2,014
6,585 2,825
Foreign exchange for the year ended 30 November 2023 includes exchange differences arising on an
intercompany loan with a foreign subsidiary which is now treated as finance income or finance costs in
line with the underlying asset. This represents a new accounting policy. In prior periods, this exchange
difference of £80,000 was recorded in operating costs but as the amount is not considered material,
management has not restated the prior year results.
6. Tax
a. Analysis of tax (credit)/charge in the Consolidated Income Statement
Year ended Year ended
30 November 2023 30 November 2022
£000 £000
Current taxation
UK corporation tax 296 303
Adjustment in respect of prior years 796 121
Foreign tax 479 495
Total current tax charge 1,571 919
Deferred taxation
Temporary differences (23) (4,856)
Adjustment in respect of prior years 527 (109)
Overseas tax (5) (652)
Total deferred (credit)/charge 499 (5,617)
Total Consolidated Income Statement tax charge/(credit) 2,070 (4,698)
b. Analysis of tax (credit)/charge in the Consolidated Statement of Comprehensive Income
Year ended Year ended
30 November 2023 30 November 2022
£000 £000
Deferred tax
Defined benefit pension scheme movements (2,790) (2,407)
Fair value movements of hedging instruments - (11)
Deferred tax relating to the change in rate - (507)
Total Consolidated Statement of Comprehensive Income tax credit (2,790) (2,925)
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 2023 Year ended 30 November 2022
Adjusted Adjustment Total Adjusted Adjustment Total
£000 £000 £000 £000 £000 £000
(Loss)/profit on ordinary activities before (4,409) (22,625) (27,034) 6,862 (26,059) (19,197)
tax1
Tax at 23.01% (2022: 19%) thereon: (1,105) (5,206) (6,221) 1,304 (4,951) (3,647)
Effects of:
• Change in tax rate on carried forward 267 - 267 - - -
deferred tax assets
• Expenses not deductible for tax purposes 206 2,446 2,652 14 100 114
• Non-taxable income (42) (3,094) (3,136) - (43) (43)
• Impact of super deduction - - - (56) - (56)
• Change in rate on current year movements - - - 64 (1,564) (1,500)
• Other temporary timing differences: UK 2,498 (97) 2,401 - - -
• Other temporary timing differences: 1,138 (51) 1,087 396 - 396
Overseas
• Effect of (profits)/losses in various (324) - (324) 60 - 60
overseas tax jurisdictions
• Previously recognised deferred tax now 3,857 - 3,857 - - -
unrecognised
• Prior period adjustments - UK 1,259 - 1,259 (153) - (153)
• Prior period adjustments - overseas 64 - 64 131 - 131
• Other 164 - 164
Tax (credit)/charge in the Consolidated Income 8,072 (6,002) 2,070 1,760 (6,458) (4,698)
Statement
1 Includes discontinued operations
The above reconciliation of tax relates to continuing operations and as set out in Note 7, no corporation
tax balances will be impacted by disposal.
d) Deferred tax
The Group has recognised deferred tax assets as these are anticipated to be recognised against future
periods.
The major deferred tax assets and liabilities recognised by the Group and the movements thereon are as
follows:
Accelerated Defined-benefit Share-based Short-term Acquisition-related
depreciation pension scheme payments timing Losses intangible assets Total
obligation differences
£000 £000 £000 £000 £000 £000 £000
At 1 December (235) (7,588) 236 657 - (3,744) (10,674)
2021
(Charge)/credit (556) - (177) 164 5,842 344 5,617
to income
Credit/(charge)
to other - 1,937 - (319) 1,307 - 2,925
comprehensive
income
At 30 November (791) (5,651) 59 502 7,149 (3,400) (2,132)
2022
Credit /charge) 1,400 (97) 16 (336) (4,415) 2,933 (499)
to income
Credit/(charge)
to other - 2,790 - - - - 2,790
comprehensive
income
Credit/(charge) - - 11 - - - 11
to equity
At 30 November 609 (2,958) 86 166 2,734 (467) 170
2023
Analysed on the balance sheet as:
2023 2022
£000 £000
Deferred tax asset 170 174
Deferred tax liabilities - (2,306)
At 30 November 2023 170 (2,132)
Certain deferred tax assets and liabilities have been offset above.
The Group has recognised deferred tax assets in jurisdictions where these are expected to be recoverable
against profits in future periods.
The rate of UK Corporation Tax increased to 25% from 1 April 2023. Taxation for other jurisdictions is
calculated at the rates prevailing in the respective territories.
Deferred tax assets and liabilities have been offset where the group has a legally enforceable right to
set off current tax assets against current tax liabilities an where the deferred tax assets and the
deferred tax liabilities relates to income taxes levied by the same tax authority on the same taxable
entity.
No deferred tax liability is recognised on temporary differences of £678,000 (2022: £445,000) relating to
the unremitted earnings of overseas subsidiaries as the Group is able to control the timings of the
reversal of these temporary differences and it is probable that they will not reverse in the foreseeable
future.
A deferred tax asset of £10,542,000 (2022: £396,000) has not been recognised due to uncertainty that the
asset will be utilised in the foreseeable future. This deferred tax asset relates to UK and Australia
split and includes £312,000 in respect of tangible and intangible assets, £313,000 in respect of pension
schemes, £9,108,000 in respect of tax credits and loss carry forwards and £807,000 of disallowed tax in
respect of interest expenses.
7. Discontinuing operations and assets held for sale
Discontinued operations
On 31 May 2023, the Group completed the sale of the RM Integris and RM Finance Businesses and related
assets, to The Key Support Services Limited. Total consideration for the sale was £16.0m on a cash
free/debt free basis of which £12.0m was received on completion subject to at £3.3m normalised working
capital adjustment and £4.0m receivable subject to satisfaction of certain conditions, including those
related to competition clearance in cash, of which £3.5m was received in June 2023 and £0.5m was received
in July 2023.
Income statement analysis of discontinued operations
Year ended Year ended
30 November 2023 30 November 2022
£000 £000
Revenue 2,410 4,871
Cost of sales (988) (1,894)
Gross profit 1,422 2,977
Operating expenses (662) (1,387)
Profit before tax 760 1,590
Tax - -
Profit for the year from discontinued operations 760 1,590
Gain on disposal of discontinued operations
Year ended Year ended
30 November 2023 30 November 2022
£000 £000
Gain on disposal of discontinued operations before taxation 15,330 -
Costs associated with the disposal (1,886) -
Net gain on disposal of discontinued operations 13,444 -
Profit for the year from discontinued operations
Year ended Year ended
30 November 2023 30 November 2022
£000 £000
Profit for the year from discontinued operations 760 1,590
Net gain on disposal of discontinued operations 13,444 -
Net gain on disposal of discontinued operations 14,204 1,590
Total comprehensive income for the financial year from discontinued operations
Year ended Year ended
30 November 2023 30 November 2022
Group £000 £000
Attributable to owners of the parent 14,204 1,590
Cash flows from discontinued operations
During the year, RM Integris and RM Finance contributed £1,633,000 (2022: £1,533,000) to the Group’s net
operating cash flows, paid £nil (2022: £nil) in respect of investing activities and paid £nil (2022:
£nil) in respect of financing activities. As the sale to Schools Educational Software Limited was an
asset sale, cash and corporation tax balances related to the business were retained within the Group.
Included in the sale agreement were Group owned intellectual properties and the related assets. These
assets are fully amortised and depreciated.
The net gain on disposal of discontinued operations represents the net cash proceeds of £12,672,000, plus
net liabilities disposed of £2,658,000 and less costs associated with the disposal of £1,886,000.
Assets and liabilities held for sale
Details of RM Integris and RM Finance Business assets and liabilities classified as held for sale in the
prior year were as follows:
At At
30 November 2023 30 November 2022
Group £000 £000
Assets:
Trade receivables - 172
Prepayments - 114
Accrued income - 132
Assets classified as held for sale - 418
Liabilities:
Trade payables - (65)
Other taxation and social security - (32)
Other payables - (31)
Deferred income - (1,954)
Liabilities directly associated with assets classified as held for - (2,082)
sale
8. Earnings per share
Year ended 30 November 2023 Year ended 30 November 2022
Weighted Weighted
(Loss)/profit for average Pence per (Loss)/profit for average Pence per
the year number of share the year number of share
shares shares
£000 £000 £000 £000 £000 £000
Basic earnings per ordinary
share
Basic earnings from (43,308) 83,256 (52.0) (16,089) 83,256 (19.3)
continuing operations
Adjustments (see Note 3) 30,067 - 36.1 19,601 - 23.5
Adjusted basic earnings from
continuing (13,241) 83,256 (15.9) 3,512 83,256 4.2
operations
Basic earnings from 14,204 83,256 17.1 1,590 83,256 1.9
discontinuing operations
Adjusted basic earnings from 760 83,256 0.9 1,590 83,256 1.9
discontinuing operations
Diluted earnings per ordinary
share
Basic earnings from (43,308) 83,256 (52.0) (16,089) 83,256 (19.3)
continuing operations
Effect of dilutive potential
ordinary shares - share-based - 343 0.2 - 1,335 0.3
payment awards
Diluted earnings from (43,308) 83,599 (51.8) (16,089) 84,591 (19.0)
continuing operations
Adjustments (see Note 3) 30,067 - 36.0 19,601 - 23.2
Adjusted diluted earnings (13, 241) 83,599 (15.8) 3,512 84,591 4.2
from continuing operations
Basic diluted earnings from 14,204 83,599 17.0 1,590 84,591 1.9
discontinuing operations
Adjusted diluted earnings 760 83,599 0.9 1,590 84,591 1.9
from discontinuing operations
In accordance with IAS 33 the diluted loss per share is corrected on the face of the Income Statement to
reflect the undiluted figure as a loss should not be diluted.
9. Dividends
Year ended Year ended
30 November 2023 30 November 2022
£000 £000
Final dividend for the year ended 30 November 2022 – Nil p per share - 2,498
(2021: 3.0p)
The Directors do not propose a final dividend for the year ended 30 November 2023.
10. Goodwill
£000
Cost
At 1 December 2021 58,896
Foreign exchange differences 199
At 30 November 2022 59,095
Foreign exchange differences (288)
At 30 November 2023 58,807
Accumulated impairment
At 1 December 2021 and 30 November 2022 9,694
Impairment charge 10,575
At 30 November 2023 20,269
Carrying amount
At 30 November 2023 38,538
At 30 November 2022 49,401
At 30 November 2022, the carrying amount of goodwill was allocated to RM Resources and RM Assessment as
set out in the table below.
The decision by management to separately monitor the results of the Consortium and TTS brands in June
2023 required that goodwill previously monitored at the RM Resources CGU level was required to be
allocated between Consortium and TTS. This was performed on the basis of the relative values of the two
businesses, determined using the relative material profits of the two businesses from 1 June 2023 to 30
November 2023 excluding the second half of FY22 where trading performance was most negatively impacted by
the rollout of the Evolution programme. Material profit is defined as revenue less material cost and less
other margin factors such as customer rebates, supplier rebates and purchase price variance, and carriage
in costs. Goodwill allocated to RM Consortium was £10,575,000 and the remaining goodwill of £31,633,000
was allocated to RM TTS. Following the announcement of the closure of the Consortium business, management
performed an impairment review which resulted in the goodwill allocated to RM Consortium of £10,575,000
being fully impaired.
The carrying amount of goodwill is allocated to cash-generating units as follows:
2023 2022
Year ended 30 Pre-tax discount Headroom Year ended 30 Pre-tax discount Headroom
November rate November rate
Group £000 £000 £000 £000 £000 £000
RM Resources N/A N/A N/A 42,208 13.2% 16,400
RM TTS 31,633 14.2% 811 N/A N/A N/A
RM Assessment 6,905 14.2% 54,138 7,193 12.6% 65,400
Further information pertaining to the performance and future strategy of the Divisions can be found
within the Strategic Report.
The recoverable amounts of the Cash Generating Units (‘CGU’) are determined from value in use
calculations. The key assumptions for the value in use calculations are those regarding the cash flows,
the discount rates and the growth rates. Historically the Group has taken cash flow forecasts derived
from the most recent annual financial budget approved by the Board, which also contains forecasts for the
two years following, and extrapolates cash flows based on terminal rates which align to market growth and
inflation expectations. This approach continues to be used to test impairment of the RM Assessment CGU.
Given the performance of the Resources division in recent years, the Directors have reassessed the level
of uncertainty associated with the cashflow forecasts of TTS in the outer years of that budget. Whilst
the company aims to achieve those budgets, the most supportable (and therefore reliable) budget is that
which has been prepared for the purpose of the going concern review. For the purpose of the impairment
test of the TTS CGU at 30 November 2023, a value in use has been derived by taking the forecast for the
year ended 30 November 2024, removing cashflows which do not comply with the requirements of IAS36, and
calculating a terminal value assuming the long-term growth rate and pre-tax discount rate set out below.
The Group monitors its post-tax Weighted Average Cost of Capital and those of its competitors using
market data. In considering the discount rates applying to CGUs, the Directors have considered the
relative sizes and risks of its CGUs and their relatively narrow operation within the education products
and services market. The impairment reviews use a discount rate adjusted for pre-tax cash flows.
Year ended 30 November 2023
The table below shows key assumptions used in the value in use calculations for the year ended 30
November 2023:
RM TTS RM Assessment
Pre-tax discount rate 14.2% 14.2%
Long-term growth rate 2.4% 2.4%
RM TTS
If the long term growth rate reduced by 0.18% (i.e. a long term growth rate of 2.22%) or if a pre-tax
discount rate increased by 0.2% (i.e. a pre-tax discount rate of 14.4%), the headroom would be
eliminated. The FY24 cashflow assumption used in the impairment model is £6m. A reduction of 1.6% would
erode headroom.
Given the limited headroom the cashflows, long term growth rates and pre-tax discount rates represent key
sources of estimation uncertainty. A material impairment would be recorded if the long term growth rate
reduced to 2.11%, the pre-tax discount rate increased to 14.53%, or the cashflow forecasts reduced by
2.6%
The cashflow forecast is also sensitive to costs incurred by the Group on behalf of TTS. The FY24
forecasts do not take into consideration future potential efficiency savings in group costs as those
plans were not enacted at 30 November 2023. Central support costs currently allocated to TTS in the FY24
cashflow forecasts total £1.3m. If these costs increased by £100,000, headroom would be eroded.
If the cashflows in RM TTS were to increase over three years in line with the three-year budget, headroom
would increase to £14.3m. If the cashflows in RM TTS were to reduce as set out within the reasonable
worst-case scenario approved by the Board for inclusion in the going concern review, headroom would be
eroded and an impairment of £23.2m would be required to be recorded. The impairment in a mitigated
reasonable worst-case scenario would be £17.1m.
RM Assessment
The sensitivity of the RM Assessment carrying values to reasonably possible changes in key assumptions,
including the reasonably possible downside risks applied as part of the going concern review, has been
performed and would not cause the carrying value to exceed its recoverable amount. No reasonably possible
change in the pre-tax discount rate or long-term growth rate would lead to an impairment and accordingly
these sensitivities have not been provided.
Year ended 30 November 2022
The table below shows key assumptions used in the value in use calculations for the year ended 30
November 2022:
RM Resources
RM Assessment
(combined)
Pre-tax discount rate 13.2% 12.6%
Long-term growth rate 2.5% 2.5%
RM Resources
The key assumptions used within the cash flow forecasts included:
• Price rises during the year ended 30 November 2023 ranging from 12% to 14% depending upon the brand;
• Prices rise during the years ended 30 November 2024 and 2025 ranging from 0% to 3% depending on the
brand; and
• Volume changes during the three years ended 30 November 2025 ranging from a contraction of 8% to
growth of 7% dependent upon brand.
The weighted average annualised price increase over the three-year period and the assumed volume
increases, along with the change in assumption which, taken in isolation, would give rise to an
impairment are set out below.
Annualised weighted average Annualised weighted average
price increase volume increase
Assumption in forecasts 6.2% 1.4%
Change in forecasts required for carrying value (1.6%) (5.5%)
to equal recoverable amount
If the cash flows in RM Resources were to reduce as set out within the reasonable worst-case scenario
approved by the Board for inclusion in the working capital and going concern testing, as disclosed in the
Annual Report and Accounts for the year ended 30 November 2022, plus a 10% reduction of cash flows in
perpetuity, headroom would be eroded and an immaterial impairment would be required to be recorded. If
estimated cash flows were to reduce by 15% in every future period an impairment of £1.1m would be
required.
No reasonably possible change in the pre-tax discount rate or long-term growth rate would lead to an
impairment and accordingly this sensitivity has not been provided.
RM Assessment
The sensitivity of the RM Assessment goodwill carrying values to reasonably possible changes in key
assumptions, including the reasonably possible downside risks applied as part of the going concern
review, has been performed and would not cause the carrying value to exceed its recoverable amount. No
reasonably possible change in long-term growth rates or pre-tax discount rates would lead to an
impairment and accordingly these sensitivities have not been provided.
11. Trade and other receivables
2023 2022
£000 £000
Current assets
Financial assets
Trade receivables 21,207 24,441
Other receivables 1,160 1,934
Accrued income from customer contracts 2,860 2,288
25,227 28,663
Non-financial assets
Prepayments 7,106 7,540
Total current assets 32,333 36,203
Non-current assets
Financial assets
Other receivables 240 290
Total non-current assets 240 290
Total trade and other receivables 32,573 36,493
12. Trade and other payables
2023 2022
£000 £000
Current liabilities
Financial liabilities
Trade payables 16,441 34,269
Lease liabilities 2,194 3,144
Other payables 2,757 2,721
Derivative financial instruments 278 272
Accruals 7,708 10,516
29,378 50,922
Non-financial liabilities
Other taxation and social security 4,702 3,149
Deferred income from customer contracts 12,292 11,568
46,372 65,639
Non-current liabilities
Financial liabilities
Lease liabilities
• due after one year but within two years 1,819 2,062
• due after two years but within five years 4,107 4,366
• after five years 8,371 9,570
Non-financial liabilities
Deferred income from customer contracts
• due after one year but within two years 1,027 1,357
• due after two years but within five years 1,436 1,473
• after five years - 266
16,760 19,094
63,132 84,733
13. Borrowings
2023 2022
£000 £000
Bank loan 55,000 49,000
Less capitalised fees (1,349) (272)
Borrowings 53,651 48,728
At 30 November 2023, the Group had drawn down £55.0m (2022: £49.0m) of the facility.
Bank and professional service fees relating to securing the loan have been capitalised and are amortised
over the length of the loan of which £141,000 (2022: £138,000) relates to the unamortised original
facility agreement and £1,208,000 is the unamortised arrangement fee relating to the extension during the
current year (2022: £134,000).
In March 2023, the Group secured an agreement with lenders to extend the existing £70.0m facility to 5
July 2025, subject to the addition of a further ‘hard’ liquidity covenant test requiring the Group to
have liquidity greater than £7.5m on the last business day of the month, and liquidity not be below £7.5m
at the end of two consecutive weeks within a month.
In April 2023, the Group agreed with the Trustee of the RM and CARE Schemes to provide the Schemes with a
second ranking fixed and floating charge over the shares of all obligor companies (except for RM plc) and
a payment of £0.5m each at bi-annual intervals starting on August 2023 which is contingent upon the
adjusted debt leverage ratio being lower than 3.2x at that date. The definition of adjusted leverage is
aligned to the banking facility as set out below. No such payment was made during the year ended 30
November 2023.
The business operated within its existing financial covenants for the first half of 2023 but indicated in
its interim financial statements that a breach was expected for the facility’s LTM EBITDA covenant from
the third quarter of the year ended 30 November 2023. EBITDA waivers were granted by lenders for the
August and November 2023 periods and the Group continues to comply with the conditions of each lender
with regards to any waivers and the respective facility agreement. At the end of November 2023, the
minimum EBITDA covenant required was £8.6m versus EBITDA of £7.0m. In addition, during November 2023, the
soft liquidity covenant limit on forecasted liquidity was exceeded for the first time, resulting in a
meeting held with lenders under the terms of the facility.
Since the year end, the Group has secured an agreement with Lenders, which extends the existing £70.0m
facility to July
2026. This agreement is secured against the shares of each of the obligors (other than RM plc) and by way
of a fixed and
floating charge over all assets of the obligors, and has reset the covenants under the facility as
follows:
• A quarterly LTM EBITDA (excluding discontinued operations & Consortium) covenant test from February
2024 to November 2025, which is then replaced by a quarterly EBITDA leverage test and interest cover,
which are required to be below and above 4x respectively from February 2026; and
• A ‘hard’ liquidity covenant test requiring the Group to have liquidity greater than £7.5m on the last
business day of the month, and liquidity not be below £7.5m at the end of two consecutive weeks
within a month, with a step-down period applying from 15 September 2024 to 24 October 2024 and 1
January 2025 to 21 March 2025, during which the minimum liquidity requirement is reduced from £7.5m
to £5.0m.
14. Provisions
Dilapidations Employee-related Contract risk Total
restructuring provisions
Group £000 £000 £000 £000
At 1 December 2021 1,450 916 1,175 3,541
Increase in provisions 219 254 1,227 1,700
Utilisation of provisions (239) (960) (317) (1,516)
Release of provisions (159) - (758) (917)
At 30 November 2022 1,271 210 1,327 2,808
Increase in provisions 978 2,322 1,498 4,798
Utilisation of provisions (27) (1,716) (1,160) (2,903)
Reclassification of provision1 - - (30) (30)
Release of provisions (18) - - (18)
Unwinding of discount on 89 - - 89
provisions
Foreign exchange (1) - (1) (2)
At 30 November 2023 2,292 816 1,634 4,742
1 Contract risk provisions at 1 December 2021 and 30 November 2022 include TUPE unfunded pension related
balances of £719,000 and £30,000 respectively, with the movements recognised in Other Comprehensive
Income. As set out in Note 16(a), these balances were transferred to defined benefit pension scheme
obligations during the year ended 30 November 2023 as they are estimated on an IAS 19 basis.
Dilapidations provisions, which result in the recognition of corresponding right-of-use assets, increased
by £1.0m (2022: £0.2m) during the year following the reassessment of dilapidations provisions across the
Group’s real estate portfolio. Of the £2.3m total dilapidations provisions at 30 November 2023, £1.0m is
expected to be utilised in 2024, £0.9m in 2025 and the remainder in 2035. In the prior year, the exit of
a lease in accordance with the 2018 estates strategy (see Note 3), resulted in the utilisation and
release of provisions noted above. Settlement discussions with landlords are ongoing and the outcome of
these could result in an increase or decrease in the dilapidations provision by approximately £0.3m,
which would then be fully recognised in the income statement.
Employee-related restructuring provisions refer to costs arising from restructuring to meet the future
needs of the Group. As set out in Note 3, following the Group’s decision to close the RM Consortium
business as well as the continuation of the Group’s 2022 transformation programme during 2023,
restructuring provisions of £2.2m were recognised during the year ended 30 November 2023, of which £1.6m
had been utilised by the year end. In the prior year, the Group completed the sale of warehouses planned
in the 2018 estates review and therefore utilised the provision held in 2021 as well as commencing
further restructuring of £0.3m as part of the Group’s 2022 transformation programme (see Note 3). All of
these restructuring activities are expected to be completed during 2024.
Contract risk provisions includes items not covered by any other category of which the majority relates
to provisions for onerous IT licence contracts, which increased by £1.5m during the year following the
Group’s decision to close the RM Consortium business. In the prior year, the provision increased by £1.2m
as a result of an onerous contract provision associated with the Group’s warehouse strategy, the majority
of which was utilised during the year ended 30 November 2023.
Disclosure of provisions
2023 2022
Group £000 £000
Current liabilities 2,993 2,142
Non-current liabilities 1,749 666
4,742 2,808
The non-current liabilities include dilapidations provisions of £1.2m (2022: £0.6m) which are anticipated
to be paid over 2-12 years, with the remaining non-current provisions relating to certain contract risk
provisions.
15. Share capital
Ordinary shares of 22/7p
Group Number ‘000 £000
Authorised, allotted, called-up and fully paid:
At 1 December 2021, 30 November 2022 and 30 83,875 1,917
November 2023
The valuation of the shares is weighted average cost. Ordinary shares issued carry no right to fixed
income.
16. Pension schemes
a. Defined contribution schemes
The Group operates or contributes to a number of defined contribution schemes for the benefit of
qualifying employees. The assets of these schemes are held separately from those of the Company. The
total cost charged to income of £2,427,000 (2022: £2,047,000) represents contributions payable to these
schemes by the Group at rates specified in employment contracts. At 30 November 2023 £334,000 (2022:
£262,000) due in respect of the current financial year had not been paid over to the schemes.
b. Local government pension schemes
The Group has TUPE employees who retain membership of local government pension schemes, many of which
have a customer contractual guarantee whereby RM reimburses for any IAS 19 deficit when RM ceases to be a
participating employer and are therefore accounted for as a defined benefit arrangement, with actuarial
movements recognised through Other Comprehensive Income. As a participant in a multi-employer defined
benefit pension scheme, the Group estimates the position on an IAS 19 basis by using the most recent
triennial valuation but with appropriate and up-to-date actuarial inputs (such as discount rate, CPI/RPI
movements), internal information (such as employee related data) but not IAS 19 inputs such as scheme
asset and liability movements, mortality assumptions that relate to participating employees. The Group is
not the main sponsoring employer in these schemes and therefore does not have an unconditional right to
recover surpluses, either during the life of the scheme, when all the members have left the plan or on a
plan wind-up. Similarly, the Group is not liable for other entities’ obligations in these schemes.
The Group makes payments to these schemes for current service costs in accordance with its contractual
obligations. The amount due in respect of these schemes at 30 November 2023 was £62,000 (2022: £40,000).
The amounts recognised in the Income Statement and in the Statement of Comprehensive Income in respect of
the Local Government Pension Schemes are set out below:
Year ended Year ended
30 November 2023 30 November 2022
Group £000 £000
Current service cost (69) (180)
Expense recognised in the Income Statement (69) (180)
Release of Local Government Pension Scheme provisions - 689
Income recognised in the Statement of Comprehensive Income - 689
(Expense)/income recognised in Total Comprehensive Income (69) 509
At 30 November 2023, the defined benefit pension scheme obligations liability incorporated information
from 23 Local Government Pension Schemes based on the most recent triennial valuations performed as at 31
March 2023 and, based on the assumptions above, led to a calculation of an unfunded liability position as
set out below:
Year ended Year ended
30 November 2023 30 November 20221
Group £000 £000
Obligations (unfunded)
At 1 December (30) (719)
Actuarial gains/(losses) - 689
At 30 November (30) (30)
1 The unfunded liability position for the year ended 30 November 2022 was previously included in
provisions (see Note 14 for details) but were transferred to defined benefit pension scheme obligations
during the year ended 30 November 2023 as they are estimated on an IAS 19 basis.
c. Defined benefit pension schemes
The Group has both defined benefit and defined contribution pension schemes. There are three defined
benefit pension schemes.
The Research Machines plc 1988 Pension Scheme (RM Scheme)
The Scheme provides benefits to qualifying employees and former employees of RM Education Limited but was
closed to new members with effect from 1 January 2003 and closed to future accrual of benefits from 31
October 2012. The assets of the Scheme are held separately from RM Education Limited's assets in a
trustee-administered fund. The Trustee is a limited company. Directors of the Trustee company are
appointed by RM Education Limited and by members. The Scheme is a funded scheme.
Under the Scheme, employees were entitled to retirement benefits of 1/60th of final salary for each
qualifying year on attainment of retirement age of 60 or 65 years and additional benefits based on the
value of individual accounts. No other post-retirement benefits were provided by the Scheme.
The most recent actuarial valuation of Scheme assets and the present value of the defined benefit
obligation was carried out for statutory funding purposes at 31 May 2021 by a qualified independent
actuary. IAS 19 Employee Benefits (revised) liabilities at 30 November 2023 have been rolled forward
based on this valuation’s base data.
As at 31 May 2021, the triennial valuation for statutory funding purposes showed a deficit of
£15,386,000. The Group agreed with the Scheme Trustees that it will repay this amount via deficit
catch-up payments of £3,200,000 per annum until 31 December 2024. The next triennial valuation will be
due as at 31 May 2024. At 30 November 2023 there was an amounts outstanding of £266,667 (2022: £266,667)
representing one month's deficit payment.
The Company has entered into a pension protection fund compliant guarantee in respect of scheme
liabilities. No liability has been recognised for this within the Company as the Directors consider that
the likelihood of it being called upon is remote.
The Consortium CARE Scheme (CARE Scheme)
Until 31 December 2005, The Consortium for Purchasing and Distribution Limited (“The Consortium”,
acquired by the Company on 30 June 2017 and now RM Educational Resources Limited) operated a pension
scheme (the “Consortium CARE” scheme) providing benefits on both a defined benefit (final salary-linked)
and a defined contribution basis. From 1 January 2006, the defined benefit (final salary-linked) and
defined contribution sections were closed and all employees, subject to the eligibility conditions set
out in the Trust Deed and Rules, joined a new defined benefit (Career Average Revalued Earnings) section.
From 28 February 2011 the scheme was closed to future accruals.
The most recent actuarial valuation of Scheme assets and the present value of the defined benefit
obligation was carried out for statutory funding purposes at 31 May 2021 by a qualified independent
actuary. IAS 19 Employee Benefits (revised) liabilities at 30 November 2023 have been rolled forward
based on this valuation’s base data.
As at 31 May 2021, the triennial valuation for statutory funding purposes showed a deficit of £6,240,000.
The Group agreed with the Scheme Trustees that it will repay this amount via deficit catch-up payments of
£1,200,000 per annum until 31 December 2026. The next triennial valuation will be due as at 31 May 2024.
At 30 November 2023 there was an amount outstanding of £100,000 (2022: £100,000) representing one month's
deficit payment.
Prudential Platinum Pension (Platinum Scheme)
The Consortium acquired West Mercia Supplies in April 2012 (prior to the Company acquiring The
Consortium). Upon acquisition by The Consortium of West Mercia Supplies, a pension scheme (the Platinum
scheme) was set up providing benefits on both a defined benefit (final salary-linked) and a defined
contribution basis for West Mercia employees. The most recent full actuarial valuation was carried out by
the independent actuaries XPS Pensions Group on 31 December 2021. The scheme is administered within a
legally separate trust from The Consortium and the Trustees are responsible for ensuring that the correct
benefits are paid, that the scheme is appropriately funded and that the scheme assets are appropriately
invested. The triennial valuation of the Scheme for statutory funding purposes at 31 December 2021 was a
surplus of £71,800.
Amounts recognised in the Income Statement and in the Statement of Comprehensive Income
Year ended Year ended
30 November 2023 30 November 2022
Group Note £000 £000
Administrative expenses and taxes (6) (7)
Operating expense (6) (7)
Interest cost (8,269) (5,326)
Interest on scheme assets 9,360 5,894
Net interest income 4, 5 1,091 568
Income recognised in the Income Statement 1,085 561
Effect of changes in demographic assumptions 3,400 2,053
Effect of changes in financial assumptions 23,820 135,098
Effect of experience adjustments (6,152) (20,544)
Total actuarial gains 21,068 116,607
Return on scheme assets excluding interest on scheme assets (36,839) (129,453)
Expense recognised in the Statement of Comprehensive Income (15,771) (12,846)
Expense recognised in Total Comprehensive Income (14,686) (12,285)
The effect of changes in financial assumptions is principally due to the increase in the discount rates -
see sensitivity information further below. The discount rates have increased as a result of an increase
in corporate bond yields over the period, which have led to a lower value being placed on the Schemes’
liabilities. This has been more than offset by falls in asset values reflecting low returns on growth
assets such as equities, as well as returns on Liability Driven Investment (LDI) holdings which are
designed to move in the same way as liabilities following changes to interest rates and market-implied
inflation – see LDI information below.
Reconciliation of the scheme assets and obligations through the year
RM Scheme CARE Scheme Platinum Scheme Total
£000 £000 £000 £000
Assets
At 1 December 2021 316,722 17,858 3,061 337,641
Interest on scheme assets 5,524 316 54 5,894
Return on scheme assets, excluding interest on scheme (123,023) (5,335) (1,095) (129,453)
assets
Administrative expenses - 20 (27) (7)
Contributions from Group 3,452 1,059 26 4,537
Benefits paid (5,331) (625) (14) (5,970)
At 30 November 2022 197,344 13,293 2,005 212,642
Interest on scheme assets 8,670 602 88 9,360
Return on scheme assets, excluding interest on scheme (34,841) (1,721) (277) (36,839)
assets
Administrative expenses - - (6) (6)
Contributions from Group 3,200 1,216 80 4,496
Benefits paid (3,827) (725) (16) (4,568)
At 30 November 2023 170,546 12,665 1,874 185,085
Obligations
At 1 December 2021 (282,178) (22,544) (2,568) (307,290)
Interest cost (4,892) (389) (45) (5,326)
Actuarial gains/(losses) 107,713 7,661 1,235 116,609
Benefits paid 5,331 625 14 5,970
• At 30 November 2022 (174,026) (14,647) (1,364) (190,037)
Interest cost (7,574) (636) (59) (8,269)
Actuarial gains/(losses) 19,386 1,512 170 21,068
Benefits paid 3,827 725 16 4,568
• At 30 November 2023 (158,387) (13,046) (1,237) (172,670)
•
• Net pension surplus/(deficit)
• At 30 November 2023
Pension deficit - (381) - (381)
Pension surplus 12,159 - 637 12,796
Net pension surplus/(deficit) 12,159 (381) 637 12,415
•
• At 30 November 2022
Pension deficit - (1,354) - (1,354)
Pension surplus 23,318 - 641 23,959
Net pension surplus/(deficit) 23,318 (1,354) 641 22,605
Included within the CARE Scheme obligations is an unfunded liability of £88,000 (2022: £98,000) which is
a liability of the Group and not the Scheme.
Reconciliation of net defined benefit obligation
Year ended Year ended
30 November 2023 30 November 2022
Group £000 £000
Net surplus/(obligation) at the start of the year 22,605 30,351
Cost included in Income Statement 1,085 561
Scheme remeasurements included in the Statement of Comprehensive Income (15,771) (12,845)
Cash contribution 4,496 4,538
Net pension surplus 12,415 22,605
Obligation by participant status
At At
30 November 2023 30 November 2022
Group £000 £000
Vested deferreds 133,122 145,134
Retirees 39,548 44,903
172,670 190,037
Value of scheme assets
At At
30 November 2023 30 November 2022
Group Fair value hierarchy £000 £000
Cash and cash equivalents, including escrow Level 1 20,920 6,691
Equity instruments Level 2 16,796 18,459
Equity instruments - pooled investment vehicle Level 3 51,729 73,447
Debt instruments Level 2 1,874 2,005
Liability driven investments Level 1 - 79,476
Liability driven investments Level 2 76,556 13,270
Insurance contract Level 3 17,210 19,294
185,085 212,642
Liability driven investments (LDI)
The RM Scheme and the CARE Scheme assets include an LDI portfolio totalling £76.6m at 30 November 2023
(2022: £92.7m). The portfolio is valued at market value as no bid valuation is available. The components
of the LDI portfolio are determined by the Trustee’s investment adviser with the aim to provide a good
match to the Scheme’s exposure to interest rate and inflation risks within the value of its liabilities.
Liability driven investments are expected to move broadly in line with the rise and fall in liability
values, thus providing a degree of protection to the Scheme’s funding position.
The Trustees continue to work closely with their investment advisers to regularly rebalance the portfolio
in order to maintain a healthy level of collateral backing for the LDI portfolio in light of changes to
interest rates and inflation and work to maintain the overall asset allocations broadly in line with the
long-term return target. The Trustees are also closely monitoring the Scheme’s funding position in light
of the recent market volatility.
Insurance assets
The RM Scheme also holds insurance policies covering benefits for some pensions in payment. The value of
these annuities is £17.2m at 30 November 2023 (2022: £19.3m). This value has been calculated using the
same assumptions as used to value the liabilities. The method of determining the value of the insurance
annuities is determined by projecting the expected benefit payments using the agreed assumptions and then
discounting the resulting cash flows back to 30 November 2023.
Significant actuarial assumptions
Year ended Year ended
Group 30 November 2023 30 November 2022
Discount rate (RM Scheme) 5.15% 4.40%
Discount rate (CARE Scheme) 5.15% 4.45%
Discount rate (Platinum Scheme) 5.10% 4.35%
Rate of RPI price inflation (RM Scheme) 3.10% 3.05%
Rate of RPI price inflation (CARE Scheme) 3.15% 3.10%
Rate of RPI price inflation (Platinum 3.10% 3.00%
Scheme)
Rate of CPI price inflation - period 2.10% 2.05%
before 1 January 2030
Rate of CPI price inflation - period 3.10% 3.05%
after 1 January 2030
Rate of salary increases (Platinum N/A N/A
Scheme)
Rate of pensions increases pre-6 April 1.50% 1.50%
1997 service
pre-1 June 2005 service 2.90% 2.90%
post 31 May 2005 service 1.95% 1.95%
S3PA CMI 2022 1.00% 2020 and 2021
Post retirement mortality table weight parameters of 10%, S3PA CMI 2021 1.25% 2020 and
2021 weight parameters of 10%
2022 of 35%
Weighted average duration of defined 16 years 18 years
benefit obligation
Assumed life expectancy on retirement at
age 65:
Retiring at the accounting date (male 21.0 21.6
member aged 65)
Retiring 20 years after the accounting 21.9 22.8
date (male member aged 45)
Expected cash flows
Year ended Year ended
30 November 2023 30 November 2022
Group £000 £000
Expected employer contributions for the following year ended 30 4,400 4,450
November
Expected total benefit payments
Year 1 4,661 4,316
Year 2 4,926 4,534
Year 3 5,224 4,791
Year 4 5,762 5,142
Year 5 6,299 5,682
Years 6 - 10 37,603 34,679
During the year ended 30 November 2023, the Group has agreed with the Trustee of the RM and CARE Schemes
to provide the Schemes with a second ranking fixed and floating charge over the shares of all obligor
companies (except for RM plc) and a payment of £0.5m each at bi-annual intervals starting on August 2023
which is contingent upon the adjusted debt leverage ratio being less than 3.2x at that date. The
definition of adjusted leverage is aligned to the banking facility as set out in Note 13. No such payment
was made during the year ended 30 November 2023.
17. Prior year restatement
The comparative period Financial Statements have been restated to reflect a revised split of cost of
sales and operating expenses to improve the presentation and comparability of results, as set out below.
Cost of sales and operating expenses
Following a review of costs in the RM Technology division during the year ended 30 November 2023, the
split of costs between cost of sales and operating expenses was amended to align more closely with how
the division now operates and to improve presentation and comparability of results. The results for the
year ended 30 November 2022 above have been adjusted to reflect the impact if this change which was to
move £1,215,000 of costs not directly related to the sale of products and services from cost of sales to
operating expenses for the year ended 30 November 2022 (2021: £1,157,000).
These adjustments have the following impact on the primary statements for the year ended 30 November 2022
and the year ended 30 November 2021:
Consolidated Income Statement
Year ended 30 November 2022 Year ended 30 November 2021
As reported Restatement Restated As reported Restatement Restated
impact impact
£000 £000 £000 £000 £000 £000
Continuing operations
Revenue 214,167 - 214,167 206,149 - 206,149
Cost of sales (146,878) 1,215 (145,663) (138,771) 1,157 (137,614)
Gross profit 67,289 1,215 68,504 67,378 1,157 68,535
Operating expenses (85,789) (1,215) (87,004) (63,634) (1,157) (64,791)
Increase in allowance for receivables (850) - (850) (157) - (157)
Impairment losses (2,236) - (2,236) - - -
(Loss)/profit from operations (21,586) - (21,586) 3,587 - 3,587
Finance income 614 - 614 28 - 28
Other income 3,010 - 3,010 1,399 - 1,399
Finance costs (2,825) - (2,825) (1,396) - (1,396)
(Loss)/profit before tax (20,787) - (20,787) 3,618 - 3,618
Tax 4,698 - 4,698 (1,424) - (1,424)
(Loss)/profit from the year from (16,089) - (16,089) 2,194 - 2,194
continuing operations
Profit for the year from 1,590 - 1,590 2,000 - 2,000
discontinuing operations
(Loss)/profit from the year (14,499) - (14,499) 4,194 - 4,194
Earnings per ordinary share on continuing
operation
- basic (19.3)p (19.3)p 2.6p 2.6p
- diluted (19.3)p (19.3)p 2.6p 2.6p
Earnings per ordinary share on discontinuing
operations
- basic 1.9p 1.9p 2.4p 2.4p
- diluted 1.9p 1.9p 2.4p 2.4p
Earnings per ordinary share on total operations
- basic (17.4)p (17.4)p 5.0p 5.0p
- diluted (17.4)p (17.4)p 5.0p 5.0p
The prior year adjustment does not impact the Consolidated Statement of Comprehensive Income,
Consolidated Balance Sheet or Consolidated Cash Flow Statement for the year ended 30 November 2022 or
year ended 30 November 2021.
18. Post balance sheet events
On 6 March 2024, the Group announced the extension and amendment of the banking facility with its lenders
to 5 July 2026, with key changes disclosed in Note 13.
There are no other post balance sheet events.
═════════════════════════════════════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
═════════════════════════════════════════════════════════════════════════════════════════════════════════
ISIN: GB00BJT0FF39
Category Code: FR
TIDM: RM.
LEI Code: 2138005RKUCIEKLXWM61
Sequence No.: 309545
EQS News ID: 1858377
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
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2. mailto:investorrelations@rm.com
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