Q3 has ‘progressed satisfactorily’ for educational ICT and resources group RM. In fact, the second half is now expected to be significantly stronger than anticipated at the time of its first half results thanks to a good performance on managed services contracts (including Building Schools for the Future, BSF) in recent months. That said, the only hard figures in today’s IMS relate to cash: net cash at the end of August was £38.2m, compared to nearly £52m three months ago but just £13.2m a year earlier.
RM has had some contract success over the last quarter including a new seven-year ICT managed services deal with long-term customer South Lanarkshire Council; preferred bidder status on a two-year contract to continue providing its RM Unify platform to schools in Scotland; and preferred bidder status for its Assessment & Data Services business for the English Schools Performance Data Programme to 2018.
Let’s not get carried away though - RM still faces an uphill challenge in the UK education market. In the short term, TTS, the dominant business within the Education Resources division, expects minimal revenue in the second half from a significant corporate and social responsibility programme which accounts for over 10% of divisional revenue. More significantly, the end of BSF is set to reduce annual revenue at the Education Technology division by c£40m between 2013 and 2015. That’s still a significant hole that RM will struggle to fill over the next couple of years (see also RM faces up to declining revenues).