6th Jul 2015 07:19
LONDON (Alliance News) - RM PLC on Monday said its pretax profit in the first half of its 2015 financial year rose, as its cost of sales and operating expenses were cut sufficiently to offset a fall in revenue.
RM, which provides educational ICT and resources, said its pretax profit for the six months to the end of May was GBP9.2 million, up from GBP6.7 million a year earlier. Revenue fell to GBP79.8 million from GBP92.1 million, but the group managed to pull down its cost of sales and cut operating expenses enough to improve its margins and drive profit higher.
The revenue decline came from its RM Education business, which provide IT services to colleges and schools in the UK, were revenue fell to GBP36.5 million from GBP52.7 million. The fall was driven by the inclusion of its own hardware revenue in the numbers a year earlier and by lower Building Schools for the Future activity.
Revenue in RM Resources, its distribution business, rose to GBP32.7 million from GBP29.3 million, boosted by the TTS UK business and higher international sales. And revenue in its RM Results arm, which provides IT systems for onscreen testing and marking, ticked up slightly to GBP10.6 million from GBP10.1 million a year earlier.
Thanks to the improved profitability, the company said it will hike its interim dividend by 25% to 1.20 pence per share from 0.96 pence a year earlier. It also said its year-end cash position is set to be ahead of market expectations.
RM expects revenue growth to return in 2016, with all three divisions to produce revenue growth by 2017.
"We have delivered another good half year of results and are on track with our journey back to growth. RM Resources and RM Results have continued to grow and deliver strong margins. RM Education continues to improve margins as we focus on software and services. These results together with our strong balance sheet give us a stable platform for RM's long term future," said Chief Executive David Brooks.
Shares in RM were down 0.6% to 155.5 pence in early trade.
By Sam Unsted; [email protected]; @SamUAtAlliance
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