RM flags improved profitability in first half
By Josh White
Date: Tuesday 24 Jun 2025
(Sharecast News) - RM reported improved profitability for the first half of its financial year in an update on Tuesday, with adjusted operating profit expected to reach between £0.7m and £0.9m, recovering from a £0.3m loss a year earlier.
The London-listed education technology firm said it also expected adjusted EBITDA of £3.3m to £3.5m, up from £2.4m in the prior period, driven by tighter cost control and more than £20m in annualised savings.
Group revenue for the six months ended 31 May declined moderately to between £73m and £73.5m, down from £78.3m.
RM cited ongoing budget pressures in UK schools, delays to government technology funding, and tariffs affecting its US business for the decline.
The company's assessment division continued to outperform, with core platform revenue up 18% and recurring revenue rising 20% year-on-year.
Its order book grew beyond its prior record of £95.7m as more contract renewals and wins were secured.
RM said it expected further strategic wins in the second half, with assessment growth likely to offset temporary weakness in its TTS and technology businesses by year-end.
Net debt rose to £59.6m from £51.7m at the end of 2024, reflecting seasonal cash flow patterns and continued investment in RM Ava, the group's global accreditation platform.
RM said Ava was central to capitalising on the global shift toward digital assessment and would support future revenue growth, profitability and debt reduction.
The company also announced the successful extension of its existing £70m banking facility by one year to July 2027.
It said the updated agreement included revised covenant terms, with minimum EBITDA tests extended to November 2026.
Other terms remained materially unchanged.
A triennial valuation of RM's closed defined benefit pension schemes completed in March showed a combined surplus of £10.5m as of 31 May, marking a sharp turnaround from the £21.6m deficit reported in 2021.
No additional contributions would be required beyond the remaining £1.8m agreed in 2023.
"I am pleased to report that RM continues to be on a strong trajectory following our 2024 results, with profitability improving and increased momentum across our core assessment business, despite less favourable market conditions in our other divisions, as previously guided," said chief executive Mark Cook.
"Our lenders continue to be very supportive of our strategy as reflected by the latest extension of our banking facility to July 2027.
"On top of this, the positive outcome of our defined benefits pension scheme valuation strengthens our financial position moving forwards."
At 1020 BST, shares in RM were up 5.49% at 86.5p.
Reporting by Josh White for Sharecast.com.
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