Slide 1: Year to 30 November 2014
Year to 30 November 2014 To be read in conjunction with David Brooks Iain McIntosh the Preliminary Results Chief Executive Officer Chief Financial Officer announcement released on 2 February 2015
Slide 2: Overview
Overview • Adjusted operating profit increased to £18.5m (2013: £17.2m) • Adjusted operating margin increased from 6.6% to 9.1% • Revenue fell 23% to £202.5m as anticipated (2013: £261.8m) • Strong organic growth in both RM Resources and RM Results • Reshaped RM Education to a stable platform • Stro
Slide 3: Business Review
Business Review
Slide 4: Divisions
3 Divisions RM Resources (formerly Education Resources) TTS provides a wide range of physical and curriculum resources to use in schools and other educational settings in the UK and overseas SpaceKraft provides resources and immersive learning environments to meet the requirements of learners with S
Slide 5: FY14 Divisional Summary
FY14 Divisional Summary Year to 30 Nov 2014 RM Results RM Resources RM Education (formerly Unallocated (formerly (formerly Assessment Central Total £m Education Education and Data costs** Resources) Technology) Services) 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 Revenue 54.0 62.8 26.5 27.8 1
Slide 6: Group Revenue & Adjusted Operating Profit
Group Revenue & Adjusted Operating Profit Revenues declined by 23% Adjusted operating profit increased by 7.7% £17.2m** £18.5m Adjusted Operating Profit £261.8m £202.5m 20.5 by Division* £m 250 15.5 Revenue £m 200 10.5 150 100 5.5 50 0.5 0 -4.5 FY 2013 FY 2014 FY 2013 FY 2014 RM Resources RM Results
Slide 7: RM's Repositioning over 5 years
RM’s Repositioning over 5 years £376.1m Exited RM Education £43.5m £310.1m £288.7m RM Results RM Resources £26.4m £2.8m £261.8m Revenues £m £202.5m £255.5m £204.5m £202.7m £181.2m £111.9m £22.7m £21.3m £23.3m £26.5m £27.8m £54.4m £58.0m £59.8m £54.0m £62.8m £21.4m £18.5m £17.2m £14.1m £12.7m Adjuste
Slide 8: RM Resources Financial performance
RM Resources Financial performance Revenue Adjusted operating profit 16% growth £62.8m £10.3m £54.0m £7.2m FY 2013 FY 2014 FY 2013 FY 2014 8
Slide 9: RM Resources
RM Resources • Excellent organic growth in a flat UK market – TTS UK Direct Marketing revenues increased 19% – TTS International revenues increased 20% – TTS UK Distributors decreased by 7% – SpaceKraft business grew 11% and no longer loss making. • Margins increased further to 16.4% from 13.3% refl
Slide 10: RM Results Financial performance
RM Results Financial performance Revenue Adjusted operating profit 5% growth £4.6m £27.8m £4.3m £26.5m FY 2013 FY 2014 FY 2013 FY 2014 10
Slide 11: RM Results
RM Results • Revenue increased 4.8% • Highest volume of examination scripts ever processed at 12.9 million • Strong margins at 16.7% • Caribbean Examinations Council win • Pilot with AQA has led to preferred bidder status as one of two suppliers on a multi year contract 35% Assessment Data Services
Slide 12: RM Education Financial performance
RM Education Financial performance Revenue Adjusted operating profit 38% decline £181.2m £9.4m £7.7m £111.9m FY 2013 FY 2014 FY 2013 FY 2014 12
Slide 13: RM Education
RM Education • Costs of reshaping ran below plan for the year with non-continuing benefit from higher hardware revenues and better inventory realisations than expected • Margins increased from 5.2% to 6.9% • Moved to a single building for Abingdon-based staff. Last PC manufactured in June • New MD i
Slide 14: Financial Summary
Financial Summary
Slide 15: Group Financial Summary
Group Financial Summary Year to Year to £m % Change 30 Nov 2013 30 Nov 2014 Revenue 261.8 202.5 (22.6)% Adjusted* EBITDA 21.7 22.4 3.0% Adjusted* operating profit 17.2 18.5 7.7% Adjusted* profit before tax 16.4 18.1 9.9% Adjusted* basic EPS 12.6p 16.4p 30.2% Paid & proposed normal dividend per share
Slide 16: Cash Flow Bridge
Cash Flow Bridge £19.1m £0.3m £(2.6)m £(3.0)m 80 Normal 70 £(14.7)m Special £(8.0)m 60 £(3.8)m £(2.5)m 50 Cash £m 40 30 £63.2m £47.9m 20 10 0 Cash & short Cash Other Purchase of Dividends Escrow Pension Tax paid Cash & short term deposits generated by property, plant Account contribution term deposi
Slide 17: Pensions
Pensions Investments at 30 Nov IAS 19 balance sheet deficit 2014 increased since last year end Equities 51% Fixed income £m • Gilts 18% Deficit at 30 Nov 2013 (15.8) £(12.7)m net of tax • Corporate bonds 15% Escrow account established 8.0 Insurance contract 14% Cash contribution 3.8 Cash including e
Slide 18: Outlook
Outlook
Slide 19: Outlook
Outlook • Organic growth in RM Resources. Margins expected to be maintained • Organic growth and gaining new customers, both in the UK and overseas, will drive margin growth in RM Results • Re-positioning of RM Education continues with new MD focused on 5 priority areas in software and services • Ex
Slide 20: Appendices
Appendices
Slide 21: Income Statement
Income Statement 12 months to 30 Nov £m 2013 2014 Adjusted Adjustments Total Adjusted Adjustments Total Revenue 261.8 - 261.8 202.5 - 202.5 Cost of sales (187.8) - (187.8) (127.0) - (127.0) Gross profit 74.0 - 74.0 75.6 - 75.6 Gross profit % 28.3% - 28.3% 37.3% - 37.3% Operating expenses (56.8) - (5
Slide 22: Adjustments to Operating Profit
Adjustments to Operating Profit 18 £(0.5)m £(0.8)m £0.4m £(0.9)m 16 £(0.3)m 14 12 10 £18.5m £16.5m 8 6 4 2 0 FY14 adjusted Restructuring Net increase in Gain on sale of Share based Amortisation of FY14 operating operating profit property operations payment charges acquisition profit provisions intan
Slide 23: Balance Sheet
Balance Sheet £m 30 Nov 30 Nov 2013 2014 Goodwill and acquisition intangibles 14.8 14.5 Property, plant & equipment and software intangibles 10.2 8.6 Other receivables 1.9 1.9 Deferred tax assets 4.6 8.1 Total non-current assets 31.5 33.1 Inventories 10.5 10.6 Trade & other receivables 35.1 32.9 Tax
Slide 24: Cash Flow
Cash Flow 12 months to 12 months to Operating cash flows – £m 30 Nov 2013 30 Nov 2014 Profit from operations 10.4 16.5 Amortisation 0.8 0.7 Depreciation and impairment of PPE 3.9 3.4 Share-based payments 0.5 0.9 Other adjustments 7.8 1.0 Operating cash flows before movements in working capital 23.4
Slide 25: Pupil Projections - Primary
Pupil Projections - Primary Pupil projections in England in maintained nurseries and state-funded primary schools 4.8m 4.6m 4.4m 4.2m 4.0m 9% increase 3.8m 379k more pupils 3.6m 3.4m Source: DfE National Pupil Projections 2014 25
Slide 26: Pupil Projections - Secondary
Pupil Projections - Secondary Pupil projections in England in state-funded secondary schools 3.3m 3.2m 3.1m 3.0m 2.9m 2.8m 2.7m 2.6m 2.5m 17% increase 477k more pupils 2.4m Source: DfE National Pupil Projections 2014 26
Slide 27: UK Education Spend
UK Education Spend £100bn £90bn Coalition (2010-15) £80bn £70bn Labour (1997-2010) £60bn £50bn £40bn Conservative (1987-1997) £30bn £20bn £10bn Figures adjusted for inflation £0bn 1990-91 1992-93 1996-97 1999-00 1987-88 1991-92 2013-14 1994-95 2000-01 2002-03 2006-07 2009-10 1988-89 1995-96 2001-02
Slide 28: Political outlook
Political outlook Extracts from party statements On a ‘journey towards’ introducing a National Commitment to introduce a National Funding Focus remains on increasing the number of Funding Formula – no detail yet. Formula – no detail yet. academies and free schools. Keep funding limits set by the cur