Slide 1: RM plc Year to 30 September 2009
RM plc p Year to 30 September 2009 Terry Sweeney Chief Executive Mike Greig Chief Financial Officer
Slide 2: Agenda
Agenda g Highlights Fi Financial i l Review R i Business Review Outlook and Prospects p Questions 2
Slide 3: A very good year
A very y good g y year Excellent ll results l Results ahead of plan and expectations Growth in revenue and profit Strategic progress BSF moving to successful delivery Computrac driving international expansion Education resources growing rapidly Further growth ahead Record committed revenues*: £445m
Slide 4: Financial headlines
Financial headlines Year to 30 September 2008 2009 Revenue £289.5m £346.9m +20% Profit from operations* £14.6m £17.7m +21% Profit before tax* £16.4m £17.9m +9% Earnings per share* 13 1p 13.1p 15 3p 15.3p +17% Dividend per share 5.81p 6.17p +6% paid and proposed Net cash £17.3m £5.0m * before amortis
Slide 5: Revenue up £57m (+20%)
Revenue up p £57m ((+20%)) 400 Key drivers 350 RM Learning L i Technologies T h l i up £47.2m £47 2 300 250 BSF up £25.0m to £34.0m 200 US up £22.3m to £25.3m (inc. Computrac £21.6m) 150 RM Education Resources up £10.3m £10 3m 100 50 General curriculum resources up £14.0m to £54.5m 0 UK curriculum s
Slide 6: Revenue & profit by division
Revenue & p profit by y division RM Learning RM Education FY-2009 Resources RM Assessment Total T h l i Technologies and Data Services £m (inc. US) (inc. UK curriculum software) Revenue 263.7 63.9 19.3 346.9 Divisional profit 12 8 12.8 63 6.3 21 2.1 21 2 21.2 before BSF net expenditure BSF net expen
Slide 7: Impacts on profit
Impacts p on p profit BSF net expenditure BSF FY-2008 FY-2009 £m LLong-term t iinvestment t t Revenue 9.0 34.0 Prudent profit recognition on long term contracts Operating profit from projects in delivery 0.3 1.3 Operating margin 3.7% 3.9% Bid costs expensed (4.7) (3.9) UK curriculum software BSF net
Slide 8: Income statement
Income statement Year to 30 September £ £m 2008 2009 Adjusted Adjusted Adjustments* Total Revenue 289.5 346.9 - 346.9 Cost of sales (211 7) (211.7) (255 7) (255.7) - (255 7) (255.7) Gross profit 77.8 91.2 - 91.2 Selling & distribution (35.1) (39.8) - (39.8) Research & development (13.2) (13.7) - (13
Slide 9: Strong balance sheet
Strong g balance sheet Balance sheet 30 Sep 30 Sep £m 2008 2009 Goodwill and acquisition intangibles 34.6 38.8 Property, plant & equipment and software intangibles 24.7 23.9 Interest in associates 1.0 1.0 Deferred tax assets 1.5 5.2 Total non current assets 61.8 68.9 Inventories 18.3 19.9 Trade & ot
Slide 10: Working capital
Working g capital p 20% growth in revenue Working capital outflows FY-2008 FY-2009 £m (Increase)/decrease in inventories (3.8) 1.1 (Increase) in receivables (9.8) (12.8) RM Education Resources working capital Increase/(decrease) in payables 5.0 (0.8) £5m increase Increase in working capital (8.6) (1
Slide 11: Cash and financing
Cash and financing g Strong balance sheet Cash: C h £13.3m £13 3 Government-backed receivables Cash & cash equivalents* Seasonal business £m FY-2006 FY-2007 FY-2008 FY-2009 18.3 13.3 Summer peak in activity and working capital requirement 30 September 30.1 29.3 Year average 18.9 16.9 7.0 4.6 Year mi
Slide 12: Shareholder return
Shareholder return 20 BSF net expenditure Adjusted profit from operations up from £4.1m to 15 Profit £17 7m £17.7m 10 Five-year BSF net expenditure: £16.3m 5 Expensed through the income statement 0 2002 2003 2004 2005 2006 2007 2008 2009 Adjusted profit from operations (£m) 20 FTSE 250 EPS (rebased)
Slide 13: Positioned for growth
Positioned for growth g Strong reputation and track record B ilt up over 30 years experience Built i in i the th education d ti business b i Superior education solutions Broad range of innovative and effective education products and services Rapidly developing international channels Exploiting Group
Slide 14: Strategy
Strategy O off the One th world’s ld’ leading l di education d ti solutions l ti companies i Strategic Framework Education markets only Education customers need suppliers with specialist understanding Education d i expertise Deep knowledge of market needs Values shared with the customer base Superio
Slide 15: Growth opportunities
Growth opportunities pp FY-2009 Revenue Qualification providers RM Assessment Assessment services Long term contracts £19m and Data Outsourced data services National Governments BSF £34m Long term contracts RM Learning National ICT infrastructure Local Authorities Technologies Authority-wide ICT inf
Slide 16: Market landscape – UK
Market landscape p – UK Schools budgets Education Ed ti budget b d t for f year to t April A il 2010: 2010 5.8% 5 8% growth th March 2009 Budget: 1.3% education spending growth for year to April 2011 Individual school budgets normally set by March Individual school surpluses total c.£2bn c £2bn Educ
Slide 17: Market landscape – UK
Market landscape p – UK UK Education Budget School School spend on NDPBs £88bn* resources and ICT School staff salaries *Government funding for 2009/10 17 source: Budget 2009
Slide 18: Market landscape – International
Market landscape p – International US A American i Recovery R and d Reinvestment R i t t Act A t focus f on education d ti $100bn allocation for pre-school, K-12 and higher education includes school modernisation, SEN, technology Enthusiasm for technology “Education and learning technology is spoken
Slide 19: RM Learning Technologies
RM Learning Technologies A modern d secondary d school h l ICT is an essential frontline service Dimensions Annual budget: £5.2m Education delivered through ICT 1,000 pupils …across all curriculum subjects 165 staff (100 teachers) Interactive classroom technology 3 ICT staff High computer:pupil rati
Slide 20: RM Learning Technologies: Business review
RM Learning Technologies B i Business review i Revenue up £47.2m (22%) FY-2010 FY-2011 BSF contracts t t iin ddelivery li +£25m £25 Beyond Computrac +£22m UK individual schools business flat 0 100 200 300 400 500 Committed Revenue £393m Business development Continuing to invest in technology researc
Slide 21: RM Learning Technologies: New school build programmes
RM Learning Technologies N New school h l build b ild programmes BSF – driving medium-term growth BSF Contracted Future phases Schools opening in year ICT supplier to 14 projects (out of 37 awarded) Schools Total FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Authority £m £m Total value: £234m Pl
Slide 22: RM Learning Technologies: US
RM Learning Technologies US Computrac successfully integrated Cobb County Classroom Technology Acquired A i d November N b 2008 Up to Jan $32m 2009 Net cost: £5m FY-2009 revenue (11months): £21.6m (year to July 2008: £18.0m) Single US business trading as RM Computrac combined with RM Educational Sof
Slide 23: RM Education Resources
RM Education Resources H l i teachers Helping t h deliver d li the th curriculum i l 23
Slide 24: RM Education Resources
RM Education Resources Pisces Broad range of superior education products DACTA Focus on unique F i solutions l ti G General l resources Highly valued by classroom teachers TTS SpaceKraft SEN resources Large market Isis Concepts Learning spaces Funded from frontline schools budgets Lightbox Curriculu
Slide 25: RM Education Resources: Business review
RM Education Resources B i Business review i Revenue up £10.3m (19%) General resources up £14.0m (34%) Organic: 25% Acquisitions: 9% C i l Curriculum software f down d 28% FY-2005 FY-2006 FY-2007 FY-2008 FY-2009 Revenue Improving operational efficiency Curriculum software General resources New 100,0
Slide 26: RM Assessment and Data Services: Business review
RM Assessment and Data Services B i Business review i Excellent delivery and quality FY-2010 FY-2011 3.8 3 8 million illi exam scripts i t processedd ini 2009 – no errors Beyond 20 million exam results for 1.8 million pupils processed for National Pupil Database 0 5 10 15 20 25 30 35 Developing the
Slide 27: Managing costs for the future
Managing g g costs for the future Aligning cost base with business conditions Restructuring R t t i Temporary staff cost reduction Increased activity in India Headcount H d t growth th tto 270 Second office being established Property rationalisation One RM – simplifying the business New shared distr
Slide 28: Outlook
Outlook Early in the year Highly seasonal business Continued growth g BSF – delivery of existing contracts General education resources US Continuing to execute our strategy 28
Slide 29: Appendices
Appendices pp 29
Slide 30: RM Group
RM Group p RM Group RM Learning RM Education RM Assessment Resources International Technologies h l i (inc. UK Curriculum Software) andd Data ICT infrastructure General resources for Outsourced IT services International sales and software, products and use in classrooms and data analysis for channel
Slide 31: Pensions
Pensions DB pension 30 Sep 30 Sep Deficit (IAS19) Sep 2009: £12.8m (Sep 2008: £0.6m) £m 2008 2009 I Increase in i year attributable tt ib t bl to: t Assets 76 2 76.2 89 9 89.9 Liabilities (76.8) (102.7) Market-related movements: £(13.5)m Deficit (0.6) (12.8) Increase in liabilities £(18)m Deferred t
Slide 32: BSF Contract awards
BSF C t t awards Contract d Local Authority Type ICT Supplier Wave Constructor Solihull ICT RM 1 BAM/HBG Bristol Consortium Northgate Pathfinder Skanska Bradford Consortium Sun Pathfinder Amey/Costain Newcastle Consortium In-house 1 Aura Lancashire Consortium Redstone 1 Bovis Lend Lease Sheffield Co
Slide 33: BSF Typical project
BSF T i l project Typical j t Allocation of spend – typical BSF project Competitive Dialogue Average value of ICT contract: £15m Typical Stage Data centre # bidders Central systems and software 10% Learning Platform OJEU advertisement User equipment Pre-qualification questionnaire 5-10 In-school sys
Slide 34: Acquisitions
Acquisitions q Business Activities Date Net cost 3T Productions Interactive design and development Mar 2000 £5 5m £5.5m Softease Educational software Oct 2001 £4.8m Helicon Educational content Feb 2002 £0.7m Forvus Data analysis Jul 2003 £4 0m £4.0m peakschoolhaus Education inspection services Oct 2
Slide 35: Education projects: Contracts
Education projects C t t Contracts Education Projects Awarded Value Term Extension Dudley Grid for Learning Jan 1999 >£50m 10 years +2 years Classroom 2000 Lot 3 (Northern Ireland) Feb 2003 £21m complete QCA – Key Stage 3 online testing Feb 2003 £23m complete South Yorkshire eLearning Programme May