RM plc: Final Results

18 March 2025 

RM plc

Final Results for the year ended 30 November 2024

A year of transformation and major progress towards delivering our strategy

RM plc (‘RM’, the ‘Company’), a leading global educational technology (‘EdTech’), digital learning and assessment solution provider, reports its full year results for the year ended 30 November 2024 and provides an update on its strategy. 

Financial highlights 

• Adjusted operating profit from continuing operations has improved from £0.3m as reported in the FY23 accounts, to £8.6m in FY24 as a result of increased contribution from our three continuing divisions and the removal of the significant loss-making Consortium division from continuing operations.  
• As reported, adjusted EBITDA has increased by 87.2% to £13.1m (FY23: £7.0m); it has declined 12.9% compared to FY23 restated performance since this does not include corporate costs that had been recharged to Consortium but are still incurred (see note 5).
• Revenue compared to that reported in FY23 down 14.9% mostly due to the closure of Consortium early in the year and partly due to the challenging schools market impacting Technology and TTS. Assessment digital platform growth was offset by a small number of non-core legacy contracts coming to an end as planned. 
• Net cash generated from operating activities has improved by £18.9m in FY24 to £8.4m cash inflow. 
• Adjusted net debt increased to £51.7m, however better than market expectations, and following £6m investment in global accreditation platform, with Banks remaining supportive. The Company has operated within its covenants. 

Strategic Assessment business secures substantial wins and renewals 

• Contracted order book4 of Assessment has more than doubled to £95.7m at end of FY24 (FY23: £40.8m).  
• This includes two highly strategic customers, International Baccalaureate (“IB”) and Cambridge University Press & Assessment (“CUPA”), that have chosen RM to provide the platform for their groundbreaking transition to digital based assessments, for years to come. 
• Successfully renewed 99% of core Assessment contracts up for renewal in FY24 (representing 78% of Assessment annual revenue) providing a bedrock for future growth through our global accreditation platform. 
• Global accreditation platform KPIs have strengthened: 
  • Assessment digital platform revenue grew 12% year on year, assessment repeatable revenue (including scanning) grew 10% year on year. 
  • 21m tests successfully processed through the Assessment platforms (versus 19m in FY23). 
• Invested £6m during the year in the development of our strategic new global accreditation platform. 

TTS 

• TTS has continued to develop exciting products, launching 124 new products using our own IP in FY24. 
• AI generated learning tools directly linking our 9,000 TTS products to the national curriculum have enabled TTS to scale products while enhancing the accuracy of content.
• Challenging international markets as various regions experienced budgetary uncertainty as a result of elections. 

Technology 

• Shift to focus on longer-term contract awards with multi-academy trusts alongside operational and cost efficiencies delivering significantly improved adjusted operating profit. 
• Successful managed services contract wins in H2 will deliver positive revenue impact in FY25. 

A strong foundation for future growth 

• Successful planned closure of the loss-making Consortium business resulting in all parts of the group now delivering adjusted operating profit. 
• New operating model and management team now fully established, including appointment of Dr Grainne Watson as COO. 
• £10.6million of further annualised cost savings and efficiencies including the closure of unrequired office space, consolidation of our warehousing, and simplification of our operating model to support customer delivery. 

Current trading and FY25 outlook 

Trading in the first months of the year has been in line with the Board’s expectations and the full-year outlook remains in line with market expectations. We remain highly focused on significantly reducing net debt and, at the same time, continuing to invest in our core Assessment business, in particular in the global accreditation platform, which forms the cornerstone of our strategic growth ambitions.  

Mark Cook, Chief Executive of RM, said  

“This has been a year of transformation for RM, and the success of our strategy is already reflected in the progress we have made driving profitability and growing our contracted order book.  

“In Assessment, the development of our global accreditation platform has progressed along with a number of major strategic digital contract awards, while TTS has benefitted from our focus on our owned-IP product development and we have seen the quality of recurring revenues from multi-academy trusts increase in Technology. 

“Looking ahead, significantly reducing net debt is a priority, and we are evaluating ways to achieve that while ensuring that we pave the way for sustainable future growth in our core business.” 

Notes 

1    Discontinued operations in FY23 as reported include the results and net gain on disposal arising from the sale of the RM Integris and RM Finance businesses and related assets on 31 May 2023, and in FY23 restated and in FY24 also include the closure of RM Consortium, which occurred during the year ended 30 November 2024. In FY24 corporate overheads are now allocated over the remaining three divisions, rather than the four that operated in FY23.  To aid understanding of the true financial performance of the business, we therefore have added the previously reported FY23 numbers to the Financial Performance table, and added divisional contribution figures to the divisional performance table, which shows the profit contribution each division makes to RM.

2   Throughout this statement, adjusted operating profit, adjusted EBITDA, adjusted profit/(loss) before tax, divisional contribution and adjusted diluted EPS are Alternative Performance Measures, stated after adjusting items (See Note 3) which are identified by virtue of their size, nature and incidence. Their treatment is applied consistently year-on-year. 

3   Adjusted net debt is defined as the total of borrowings less capitalised fees, cash and cash equivalents and overdrafts (see Note 3). Lease liabilities of £15.0m (2023: £16.5m) are excluded from this measure as they are not included in the measurement of adjusted net debt for the purpose of covenant calculations (see Note 15). 

4   Contracted order book represents secured revenue, supported by a contract, that is yet to be recognised as revenue in the financial statements. We have introduced this metric for our Assessment division to provide greater visibility of the increasing trend towards securing longer-term strategic contractual revenue. 

5   FY23 restated adjusted operating profit from continuing operations does not include the proportion of fixed corporate overheads that had been centrally recharged to Consortium but are still mostly incurred by the Company. 

Presentation details 

A presentation by Management for investors and analysts will be published on the company website later this morning at https://www.rmplc.com/.  

Contacts: 

RM plc           investorrelations@rm.com 

Mark Cook, Chief Executive Officer  

Simon Goodwin, Chief Financial Officer    

Headland Consultancy (Financial PR)       +44 203 805 4822 

Stephen Malthouse (smalthouse@headlandconsultancy.com) 

Chloe Francklin (cfrancklin@headlandconsultancy.com)  

Dan Mahoney (dmahoney@headlandconsultancy.com) 

Notes to Editors:  

About RM  

RM was founded in 1973, with a mission to improve the educational outcomes of learners worldwide. More than fifty years on, we are a trusted Global EdTech, digital learning and assessment solution provider, transforming learners, educators, and accreditors to be more productive, resilient, and sustainable. Our simple approach enables us to deliver best in class solutions to optimise accreditation outcome.  

RM is focused on delivering a consistently high-quality digital experience, acting as a trusted consultative partner to provide solutions that deliver real impact for learners worldwide. Our three businesses include:  

• Assessment - a global provider of assessment software, supporting exam awarding bodies, universities, and governments worldwide to digitise their assessment delivery. 
• TTS (Technical Teaching Solutions) – an established provider of education resources for early years, primary schools, and secondary schools across the UK and to 114 countries internationally. 
• Technology - a market-leading advisor and enabler of ICT software, technology and bespoke services to UK schools and colleges.   

Chief Executive’s Statement 

A year of transformation  

2024 in review 

It has been a highly transformative year in more ways than one. Our leadership team had its first full year of working together and I am delighted with the progress that has led to significant operational and financial improvements. Following the planned closure of the loss-making Consortium business, we have delivered adjusted operating profit of £8.6m (FY23 reported: £0.3m), ahead of market consensus, and adjusted EBITDA of £13.1m, nearly double last year’s reported £7.0m. Statutory loss after tax has reduced by 84% to £4.7m from £29.1m, which is explained further in the CFO’s statement. We have secured two of the largest contracts in RM’s history with the International Baccalaureate and Cambridge University Press & Assessment, which are at the heart of our strategic focus. We are excited to partner with them on their groundbreaking journey from analogue to digital-based assessment.  

Revenue compared to that reported in FY23 was down 14.9% mostly due to the closure of Consortium at the beginning of the year.  When Consortium sales are removed, revenue was marginally down  (5.5%), due to a challenging UK and international schools market affecting Technology and TTS, and strategic digital platform growth in Assessment offset by the planned ending of non-core legacy contracts. However, crucially, we ended FY24 with a record Assessment contracted order book of £95.7m (FY23: £40.8m), which will convert into revenue from FY25 onwards. We now have an opportunity to expand our portfolio into formative assessment solutions and expand our professional assessment customer base. 

Our lenders have continued to be highly supportive of our strategy. We agreed with them an amendment and extension of our £70m facility in H1 to July 2026 (and a further amendment to their covenants in March 2025). We remained well within the hard covenants for the remainder of FY24. Significantly reducing net debt is a key priority and we are evaluating ways to achieve this while continuing to invest in the future growth in our core business.

I would like to extend my thanks and appreciation to all our people for their hard work and commitment during this transformational period. These achievements could not have been realised without their efforts. 

Strengthened foundations 

Operations and delivery 

Our go-to-market offering, shaped to provide transformative assessment solutions, has been aligned towards one global operating model, so we can deliver innovation, modernisation and optimisation outcomes to our customers. 

We have conducted in-depth root and branch operational reviews leading to efficiencies and process enhancements across RM, while investing £6m during FY24 in the development of our new global accreditation platform. This has resulted in a shift towards nearshore software development and we now have over 400 developers to redevelop our platform onto a single cloud, capable of delivering all our assessment products and scaling our offering. At the same time, we have maintained strong IT support in RM India for our legacy systems. Our new operating model reflects a business of our size and needs with layers simplified and targeted investment in areas that will be positively felt by our customers. This includes Dr Grainne Watson taking on the enhanced role of Chief Operating Officer, with a strengthened team beneath her, and overseeing operational performance and customer delivery aspects in Assessment, enabling a clearer line of sight from customer to developer. 

Our governance has been strengthened through the introduction of three new boards: growth; service and operations; and portfolio and innovation. A major deliverable from these forums is a clear customer development plan, tied to our portfolio roadmap, which shows the products, solutions and functionality being delivered from our platform. 

Through these transformations, the foundations of our global accreditation platform have been established, paving the way for profitable and sustainable future growth.  

Cost efficiencies 

We instigated a review of third-party advisors with actions taken to either insource certain activities, such as investor relations and internal audit, or to pivot to more strategically aligned partners, e.g. corporate brokerage. These actions will bring more intellectual property into RM’s management, provide cost reductions and aid future growth. Further annualised cost savings of £10.6 million have been achieved by rationalising our property requirements through the closure of the less utilised London office, consolidating two warehouses into one distribution centre at Harrier Park and streamlining floor space at our Abingdon head office. The full effect of these savings will be realised from FY25. 

Divisional performance 

Assessment: ready for the transformation to digitisation 

As previously announced, FY24 saw us secure groundbreaking contracts with the International Baccalaureate and Cambridge University Press & Assessment. Our long-standing relationship with these foundation customers has been built over several years, with RM having facilitated the marking of several millions of exam scripts through our systems, and we are delighted to have been chosen to work with them in navigating the path towards fully on-screen exams in the coming years. This has been supplemented by key wins, such as NEBOSH, and several contract extensions, including the Scottish Qualifications Authority, Ireland State Examinations Commissions, and Trends in International Mathematics. These strategic wins and renewals provide a bedrock for our future growth. 

As we continue to embark on the transitioning from analogue to digital assessment it was expected that a small number of legacy non-core contracts would end in FY24, impacting year-on-year revenue performance (£42.3m in FY23 to £39.7m in FY24), as we reshape our portfolio for the future. Importantly, digital platform revenue grew 12% year-on-year. Our strategic new wins and renewals, which have fuelled our record