RM makes encouraging start to FY25

RM plc’s interim results (six months ended 31 May 2025) reveal the company has made good progress on margin improvement and cost control, maintained strong momentum in its Assessment division, but is still facing challenging market conditions due to school budgetary pressures. 

Based on continuing operations (largely reflecting the closure of Consortium), revenue declined by 6.5% year-on-year to £73.2m (H1 2024: £78.3m). Adjusted operating profit improved by £1.5m to £0.9m (H1 2024: loss of £0.6m), resulting in a loss before tax of £4.3m (H1 2024: loss of £6.6m). Adjusted EBITDA excluding share-based payments increased to £3.5m (H1 2024: £2.4m). 

At the divisional level, the star of the show remains RM Assessment. Revenues increased by 4.1% to £20.5m (H1 2024: £19.7m). This included strong growth in platform revenues (+18.6%) and third-party scanning revenues (+24.0%), which resulted in recurring revenue increasing 19.5% to £17.1m (H1 2024: £14.3m). Growth was partially offset by legacy contract runoff and non-core contracts, which dropped to £2.1m (H1 2024: £4.8m). Adjusted operating profit increased by 56.5% to £3.6m (H1 2024: £2.3m).

This division has been the focus of investment for the business. In June 2025, it announced the launch of RM Ava, its adaptive virtual accreditation platform (formerly known as the ‘Global Accreditation Platform’). Its development will result in a cash outflow of £6.5m in FY25 (£4.2m in FY24). It has also announced that Trinity College London, an awarding body specialising in the assessment of communicative and performance skills, has chosen to provide assessment solutions using this platform. This follows recent contract renewals, including SEAB in Singapore, and SACE in Australia.

The situation was not as positive for RM TTS (curriculum resources) and RM Technology (school IT). RM TTS revenues decreased by 8.6% to £30.7m (H1 2024: £33.6m). In the UK, it was impacted by challenging school budgets and internationally it was hit by the US tariff situation. Despite the downturn, adjusted operating profit was flat at £0.1m (H1 2024: £0.1m). RM Technology was also a victim of the UK school budget situation, resulting in revenues falling by 12.0% to £22.0m (H1 2024: £25.0m); however, adjusted operating profit increased to £0.9m (H1 2024: £0.8m). 

The company has also announced that it plans to operationally separate the three divisions to create simpler structures, provide greater strategic flexibility, and help to unlock further cost saving opportunities. Although we do not believe there is any pressure to break up the business, it would also make it much easier to dispose of one or more divisions if the right opportunity did arise. 

Since the period end, the Group has secured an extension to its £70.0m bank facility for a further 12 months to July 2027. Additionally, after several years in deficit, its pension schemes now show a surplus of £10.5m. RM Assessment’s pipeline is strong and further wins are expected in H2, plus there are some positive signs in RM Technology (multi-academy trust contracts and the government’s Connect the Classroom initiative) and RM TTS (opportunities in the Middle East), both of which typically have a stronger H2. There is still work to be done, but it has been an encouraging start to FY25. 

Posted by: Dale Peters at 10:19

Tags: results   education   H1   assessment   edtech   school