Slide 1: 6 months to 31 May 2016
6 months to 31 May 2016 David Brooks Chief Executive Officer Neil Martin Chief Financial Officer
Slide 2: Highlights
• A solid first half performance delivering improved profitability and operating margins - Increased adjusted operating profit, up 3% to £7.1 m (H1 2015: £6.9m) Highlights - Revenue down 1% to £76.6m - Expected reductions in RM Resources (-4.4%) and RM Education (-6.4%) - Strong growth in RM Results
Slide 3: Financial summary
Financial summary
Slide 4: Financial Summary
Financial Summary * £m H1 16 H1 15 Variance 4
Slide 5: Financial Summary
Financial Summary Revenue* £m H1 16 H1 15 Variance RM Resources 29.3 30.6 -4.4% RM Results 13.2 10.6 +23.6% RM Education 34.2 36.5 -6.4% Group 76.6 77.7 -1.4% Adjusted* Operating Profit £m H1 16 H1 15 Variance RM Resources 4.3 4.5 -4.3% RM Results 2.4 1.6 +46.8% RM Education 2.3 2.6 -12.0% Corporate
Slide 6: Cash flow
Cash flow £60m £50m +£48.3m -£0.4m +£0.8m £40m -£10.0m -£3.1m -£1.4m £30m -£1.9m -£0.2m +£32.1m £20m £10m £m Net Cash at Cash Sale of Pension Dividends Capex Tax Other Net Cash at 30 Nov 2015 generated Operation 31 May 2016 from operations • Cash generated in operations position reflects working cap
Slide 7: Pensions
Pensions Deficit at 30 Nov 2015 (£m) (21.9)m Investments at May 2016 Deficit at 31 May 2016 (£m) (23.0)m Total 100.0% • IAS 19 balance sheet deficit increased £1.1m to £23.0m driven primarily by a reduction in the discount rate by 40bps, more than offsetting cash contributions and a reduction in inf
Slide 8: RM plc
RM plc RM plc~4 July 2016
Slide 9: Three Divisions
Three Divisions Physical and curriculum E-assessment and education Software, services and resources for schools and data analysis to exam boards technology to UK schools nurseries in the UK and and central government in the and colleges internationally UK and internationally • 20,000+ schools • c.20
Slide 10: RM Resources
RM Resources • Revenue decline of 4.4% driven by tightening of Revenue Adjusted Operating Profit UK school budgets - UK Direct Marketing revenues -8% - UK Distributor revenues -6% - International revenues +18% • Adjusted operating margin stable at 14.6% - Cost management actions underpin margin 2014
Slide 11: RM Results
RM Results • Revenue growth of 23.6% Revenue Adjusted Operating Profit - 46% growth in Assessment - 34% driven by timing of revenues accounted for in H1 vs prior year - 12% underlying growth primarily driven by e-testing contracts - Data revenues declined 6% - Planned contract exits which will also
Slide 12: RM Education
RM Education Revenue Adjusted Operating Profit • Much reduced revenue decline -6.4% compared to prior year -31% • Adjusted operating margins at 6.6% remain broadly stable through changing business mix 2014 2015 2016 2014 2015 2016 • Retained all Managed Services long term contracts ending in the per
Slide 13: Summary & Outlook
summary & Outlook
Slide 14: Summary & Outlook
Summary & Outlook Confident of meeting full year expectations Management action protects strong margins despite UK market pressure Progress of Assessment portfolio offsetting planned reductions in Data Further progress in developing a stable platform with sustainable margins Robust balance sheet wit
Slide 15: 15
15
Slide 16: Income Statement
Income Statement 2016 2015 16
Slide 17: Cash Flow
Cash Flow 6 months to 31 6 months to 31 Operating cash flows - £m May 2016 May 2015 Non-operating cash flows – £m 17
Slide 18: Balance Sheet
Balance Sheet Goodwill and acquisition intangibles Property, plant & equipment and software intangibles Other receivables Deferred tax assets Total non-current assets Inventories Trade & other receivables Tax assets Cash & short-term deposits Total current assets Total assets Current liabilities, in
Slide 19: UK Pupil Projections
UK Pupil Projections 5.0m 4.5m 4.0m 3.5m 3.0m 2.5m 2.0m 19
Slide 20: UK Education Spend
UK Education Spend £100bn £90bn £80bn £70bn £60bn £50bn £40bn £30bn £20bn £10bn £0bn 20
Slide 21: RM Repositioning over 5 years
RM Repositioning over 5 years Revenue Adjusted Operating Profit • Revenue decline following exit of 350 20.0 hardware 300 manufacture and end 250 15.0 of government BSF 200 programme 10.0 150 100 5.0 50 0 0.0 • Operating margins 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 improve through perio