RM plc · LSE:RM.
RM — Investor Presentation (December 2005)
16 slides from RM's investor presentation, Dec 14, 2005
Slide 1: RM plc IFRS transition
1 RM plc IFRS transition 14 December 2005 Mike Greig – Group Finance Director RM is about improving the life chances of people – worldwide – by delivering outstanding education products and services that help teachers to teach and learners to learn. Customer Success – High Standards – Innovation and
Slide 2: Headlines – FY2005
2 Headlines – FY2005 • Underlying business performance and cash flows unchanged • Revenue unchanged at £262.7m • Profit before tax and goodwill charges increases from £12.8m to £14.0m (9% increase) Pension cost falls by £1.3m Application of IFRS 2 (Share-based Payment) increases profit No R&D capita
Slide 3: IFRS timetable
3 IFRS timetable 30 September 2004 RM transition date to IFRS 1 October 2004 RM FY2005 30 September 2005 RM reports FY2005 full-year results under UK GAAP RM restates FY2005 full-year results under IFRS RM FY2006 RM reports FY2006 interim results under IFRS 30 September 2006 RM reports FY2006 full-y
Slide 4: Basis of presentation
4 Basis of presentation • Based upon current understanding of IFRS EC still to endorse certain standards New standards may be issued by 30 September 2006 Lack of established industry-specific practice • Key information restated now Further transitional information provided at time of FY2006 interim
Slide 5: Adoption choices
5 Adoption choices • Share-based payments IFRS 2 applied to equity instruments granted post 7 November 2002 • Employee benefits Adoption of 16 December 2004 amendment to IAS 19 allowing actuarial gains and losses to be presented in statement of recognised income and expenditure rather than using a c
Slide 6: Consolidated income statement
6 Consolidated income statement £’000 2005 UK GAAP profit before tax 5,459 add back goodwill amortisation 6,294 add back goodwill impairment 1,092 UK GAAP profit before tax and goodwill charges 12,845 Share based payment 14 Pensions 1,260 Holiday pay accrual (122) IFRS profit before tax and goodwill
Slide 7: Consolidated net assets
7 Consolidated net assets £’000 2005 2004 UK GAAP net assets 38,515 40,601 Dividends 3,399 3,195 Pensions (net of related tax) (11,123) (10,395) Goodwill 4,917 - Tax 1,236 821 Share based payment 2,331 1,328 Holiday pay liability (1,027) (906) IFRS net assets 38,248 34,644
Slide 8: Goodwill
8 Goodwill FY05 impact Amortisation charge of £6.3m reduces to nil, resulting in increase in intangible assets (goodwill) peakschoolhaus impairment charge increases from £1.1m to £1.2m, reflecting impairment of the balance at transition Sentinel goodwill written down to £4.2m by an impairment charge
Slide 9: Share based payments
9 Share based payments FY05 impact 0% of profit before tax Income statement charge £1.13m – £14k less than UK GAAP charge £0.27m charge for share options (new) £0.77m charge for co-investment plan (£0.2m reduction from UK GAAP) £0.09m charge for other schemes (£0.1m reduction from UK GAAP) Since 200
Slide 10: Pensions
10 Pensions FY05 impact Increase in liabilities of £11.1m being £15.9m pension liability net of £4.8m deferred tax asset, previously disclosed under UKGAAP Reduced income statement charge at £2.1m (a reduction of £1.3m from SSAP 24 charge) Income statement charge of £2.1m comprises £1.7m operating c
Slide 11: R&D
11 R&D FY05 impact Nil – no project expenditure meeting recognition criteria: - Technical feasibility - Intention to use/sell - Technical/financial resource to complete - Future economic benefit - Ability to use/sell - Ability to measure expenditure reliably Expensed if research phase cannot be dist
Slide 12: Hedge accounting and inventory valuation
12 Hedge accounting and inventory valuation FY05 impact Nil – IAS 39 Financial instruments not adopted until 1 October 2005 Future impact Foreign exchange forward contracts will be reviewed for effectiveness in meeting hedge accounting requirements Inventory purchases will no longer be accounted for
Slide 13: Other impact areas
13 Other impact areas • Holiday pay accrual at 1 October 2004 and 1 October 2005 employees had on average 5 days of holiday accrued. IFRS requires a liability to be recorded for this entitlement. A liability of £0.9m was recognised at 1 October 2004 which increased by £0.1m to £1.0m at 1 October 200
Slide 14: Long-term contracts
14 Long-term contracts • Accounting substantially unchanged under IFRS • Pre-contract costs not taken to the balance sheet unless it is probable that the contract will be obtained Accounted for in accordance with IAS 18 “Revenue” and IAS 11 “Construction contracts”: • Revenue recognition based on th
Slide 15: Disclosure
15 Disclosure • Form and elements of consolidated financial statements Income statement Balance sheet Statement of recognised income and expenditure Cash flow statement Notes to the accounts • Segmental reporting Primary reported segments unchanged: Infrastructure software and services Education sof
Slide 16: Conclusion
16 Conclusion • No change to underlying business performance and cash flows • Profit before tax and goodwill charges increases from £12.8m to £14.0m (9% increase) • Benefits of forward-looking business management and accounting