Rm Plc · LSE:RM.
Rm — FY2013 Earnings Presentation
25 slides from Rm's earnings presentation, Feb 3, 2014
Slide 1: Year to 30 November 2013
Year to 30 November 2013 David Brooks Chief Executive Officer Iain McIntosh To be read in conjunction with the Chief Financial Officer Preliminary Results announcement released on 3 February 2014
Slide 2: Overview
Overview • Revenue – Revenue excluding exited businesses fell 8.4% to £261.7m as anticipated (2012: £285.9m) • Profit – Adjusted operating profit increased to £17.2m (2012: £12.7m) – Profit before tax increased to £9.4m (2012: £7.4m) • Cash flow and balance sheet – Cash generated by operations £34.7
Slide 3: Group Financial Summary
Group Financial Summary Year to Year to £m % Change 30 Nov 2012 ** 30 Nov 2013 Revenue excluding exited businesses 285.9 261.7 (8.4)% Adjusted* operating profit excluding exited businesses 13.2 17.2 30.8% Adjusted* profit before tax 12.1 16.4 35.7% Adjusted* diluted EPS 9.8p 12.4p 26.5% Paid & propo
Slide 4: Group Revenue & Adjusted Operating Profit
Group Revenue & Adjusted Operating Profit Revenues excluding exited Adjusted operating profit excluding businesses declined by 8.4% exited businesses increased by 30.8% (9.3% including exited) (35.5% including exited) £288.7m £17.2m Adjusted Operating Profit £261.8m £12.7m** by Segment* £m 250 15.5
Slide 5: Adjustments to Operating Profit
Adjustments to Operating Profit 18 (£5.1m) 16 14 (£2.6m) 12 £1.1m £0.5m (£0.5m) (£0.2m) 10 8 £17.2m 6 £10.4m 4 2 0 FY13 adjusted Restructuring Increase in Gain on sale of Credit on legal Share based Amortisation of FY13 reported operating profit property operations & settlement payment intangible op
Slide 6: Cash Flow Bridge
Cash Flow Bridge 80 £34.7m £0.3m (£2.8m) (£4.4m) 70 (£2.4m) 60 Cash £m 50 40 30 £63.2m 20 £37.8m 10 0 Cash at 30 Cash generated Proceeds from Dividends Pension Other Cash & short November 2012 by operations sales of contribution term deposits at operations 30 November 2013 6
Slide 7: Pensions
Pensions IAS 19(Revised) balance sheet deficit Investments at 30 Nov 2013 decreased since last year end Equities 51% £m Fixed income • Gilts 29% Deficit at 30 Nov 2012 (20.4) £(15.7)m net of tax • Corporate bonds 20% Cash contribution 4.4 Total 100% Asset returns less 15.1 administration expense Num
Slide 8: Divisional Summary
Divisional Summary RM pic
Slide 9: FY13 Divisional Summary
FY13 Divisional Summary Year to 30 Nov 2013 excluding exited businesses Assessment Education Education Unallocated and Data Total £m Technology Resources Central costs Services 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 Revenue 202.7 181.2 59.8 54.0 23.3 26.5 - - 285.9 261.7 Adjusted Operatin
Slide 10: Education Technology
Education Technology Financial performance Revenue Adjusted operating profit* £202.7m £8.6m £181.2m £5.4m FY 2012 FY 2013 FY 2012 FY 2013 * The Group has early adopted the IAS19(Revised) accounting standard changes for the defined benefit pension scheme. 10 The prior year financials have been revise
Slide 11: Education Technology
Education Technology • Decision to focus on software and services and to exit end user device hardware business • Decline in Managed Services revenues as expected with reduction of BSF school openings will continue in 2014 and 2015 • Extended contractual relationships with Scotland (Glow) and South
Slide 12: Education Resources
Education Resources Financial performance Revenue Adjusted operating profit* £59.8m £8.8m £54m £7.2m FY 2012 FY 2013 FY 2012 FY 2013 * The Group has early adopted the IAS19(Revised) accounting standard changes for the defined benefit pension scheme. 12 The prior year financials have been revised for
Slide 13: Education Resources
Education Resources • Revenue declined by 9.7% due to absence of Corporate Social Responsibility (‘CSR’) programme – TTS UK Catalogue & Online revenues increased 2% – TTS International revenues increased 11% – TTS CSR programme and UK trade decreased by 49% – SpaceKraft business declined 15% and los
Slide 14: Assessment and Data Services
Assessment and Data Services Financial performance Revenue Adjusted operating profit* £26.5m £4.1m £23.3m £2.5m FY 2012 FY 2013 FY 2012 FY 2013 * The Group has early adopted the IAS19(Revised) accounting standard changes for the defined benefit pension scheme. 14 The prior year financials have been
Slide 15: Assessment and Data Services
Assessment and Data Services • Revenue increased 13.8% with volume expansion from existing customers • Won English School Performance Data Programme contract with Department of Education to 2018 • Extended Cambridge Assessment onscreen marking contract to 2019 • Extended ACCA onscreen marking contra
Slide 16: Outlook
Outlook
Slide 17: Outlook
Outlook • Cash and short term investments of £63.2m • 10% increase in total ‘normal’ dividend to 3.30p per share • Proposed return of cash via 16p per share (£15m) special dividend • ADS and TTS businesses performing well with good margins both pursuing growth in the UK and overseas • Major strategi
Slide 18: Appendices
Appendices RM pic
Slide 19: Income Statement
Income Statement 12 months to 30 Nov £m 2012* 2013 Adjusted Adjustments Total Adjusted Adjustments Total Revenue 288.7 - 288.7 261.8 - 261.8 Cost of sales (217.9) - (217.9) (187.8) - (187.8) Gross profit 70.8 - 70.8 74.0 - 74.0 Gross profit % 24.5% - 24.5% 28.3% - 28.3% Operating expenses (58.1) - (
Slide 20: Balance Sheet
Balance Sheet £m 30 Nov 30 Nov 2012** 2013 Goodwill and acquisition intangibles 15.4 14.8 Property, plant & equipment and software intangibles 13.7 10.2 Interest in associate 0.1 - Other receivables 1.9 1.9 Deferred tax assets 6.3 4.6 Total non-current assets 37.4 31.5 Inventories 14.8 10.5 Trade &
Slide 21: Cash Flow
Cash Flow 12 months to 12 months to Operating cash flows – £m 30 Nov 2012* 30 Nov 2013 Profit from operations 8.1 10.4 Amortisation 1.5 0.8 Depreciation 5.7 3.9 Share-based payments 0.1 0.5 Other adjustments 6.1 7.8 Operating cash flows before movements in working capital 21.5 23.4 Decrease in inven
Slide 22: Impact of Revised IAS19 Pension Standard
Impact of Revised IAS19 Pension Standard The adjustments made as a result of adopting IAS19 Employee Benefits in the Income Statement are as follows: Assessment Unallocated Education Education £m and Data Central Exited Total Technology Resources Services costs FY12 Adjusted operating profit 6.2 8.8
Slide 23: Pupil Projections - Primary
Pupil Projections - Primary Pupil projections in England in maintained nurseries and state-funded primary schools 5.0m 4.8m 4.6m 4.4m 4.2m 4.0m 12% increase 524k more pupils 3.8m 3.6m 3.4m Source: DfE National Pupil Projections 2013 23
Slide 24: Pupil Projections - Secondary
Pupil Projections - Secondary Pupil projections in England in state-funded secondary schools 3.2m 3.1m 3.0m 2.9m 2.8m 2.7m 14% increase 2.6m 369k more pupils 2.5m Source: DfE National Pupil Projections 2013 24
Slide 25: UK Education Spend
UK Education Spend £100bn £90bn Coalition (2010-14) £80bn £70bn £60bn Labour (1997-2010) £50bn £40bn Conservative (1987-1997) £30bn £20bn £10bn Figures adjusted for inflation £0bn Source: House of Commons Library 2013 25