Romolo Tavani - stock.adobe.com
RM outlines strategic growth plan
Education player puts tough 2023 into history books as it looks to improve business fortunes
RM has indicated it has put many of its challenges in the rear-view mirror, and has a fresh strategic plan that will grow the business.
The educational player has been forced to make some tough decisions in the past year, most notably last November, to bring the shutters down on the education supplies and resources operation, the Consortium business.
The firm has shared details of its strategic development programme as it issued results for the year ended 30 November, using the opportunity to outline the progress made and share some future optimism.
It has been a tough process going through a review of the business. After £10m losses, it was felt there was no choice but to close Consortium, and issues with an ERP system meant that roll-out had to be stopped. The business consolidated its distribution centres from two to one, saving £1.5m annually, and was also able to generate other savings of £8.5m through some restructuring.
With those decisions taken, the strategic plan is now around building a Global Accredited Platform to get the business in a place to take advantage of the move towards on-screen examinations.
The business is also looking for further international expansion to grow its market, and is continuing to make sure its software and services align to the needs of accreditors, educators and learners.
Mark Cook, chief executive of RM, was clear about the challenges but upbeat about the fresh strategy delivering growth. “Following a turbulent period, we have taken decisive action to transform and stabilise RM, including the difficult decision to cease trading in the Consortium business, permanently close down the EVO ERP system and consolidate our distribution centre estate,” he said. “With the business in an improved financial and operational position, I am delighted to unveil our new strategic plan to deliver growth. This will create a simpler and more customer-centric business, with a focus on investing in RM-owned and designed IP, to take advantage of structural digital growth drivers across the education sector in the UK and internationally.”
Driving growth ambitions
Cook said the hard work would continue, but that the firm had a fresh management team in place that was driving the growth ambitions.
“I am confident that our newly appointed and invigorated management team can build on RM’s 50-year heritage of innovation and capture the scale of the global growth opportunity we see,” he said.
For the year ended November 2023, RM reported an 8.9% decline in revenues from continuing operations at £195.2m. There was growth of 8.7% in the strategic RM Assessment business and 5.8% in TTS International. Consortium was the problem, with revenues falling by 42.8%.
The Consortium business also took its toll on adjusted operating profits, which were down by 96% to £0.3m.
If you took Consortium out of the mix, RM would have delivered a slight year-on-year dip with revenues of £175.9m, compared with £180.4m, and adjusted operating profit of £10m, down from £12.5m.
In terms of outlook, the firm stated that the first few months of its fresh fiscal year had gone as planned, and it expected to recover “a significant proportion of the lost Consortium revenue” during 2024.
