Sushiman - stock.adobe.com
RM has revealed the impact school closures have had on its revenues with the coronavirus causing major disruption to the education market over the last year.
Schools and colleges are currently going through the second period of closures, after being shut in the first wave last March for almost an academic term and a half.
Although there has been a focus on getting laptops into the hands of more children and issues with access to broadband and live lessons, the majority of those efforts have been outside of the traditional classroom.
For businesses that provide services and support into educational settings, that shift has taken a toll. One such business is RM, which revealed that school closures and exam cancellations were two of the main factors behind a 16% revenue drop to $189m in its preliminary results for the fiscal year ended 30 November 2020. Pre-tax profits halved, coming in at £13.4m.
When schools reopened trading improved in the firm’s second half, but it had to inform shareholders that the short-term outlook was uncertain given the current closures and further exam cancellations.
RM also reacted to the changing circumstances by focusing on reducing costs – it managed to shave £14m off its net debt during the fiscal year.
“2020 was a year in which RM showed good resilience and I’d like to pay tribute to our people and our customers who showed real innovation and ingenuity through testing times. In the first half of 2021, we expect some uncertainty to continue, with school closures and the cancellation of UK exams,” said RM CEO David Brooks.
The firm’s RM Results operation was also affected by the unexpected decision to cancel exams, although the firm is hoping that because the decision was made early enough in the academic year some of those commitments could be mitigated.
But the firm is expecting things to improve in the medium to longer term, as schools reopen and the vaccine programme helps society get back on a more normal footing.
“The actions taken over the last year put us in a stronger financial and operational position to meet these challenges. Looking further out, RM is well placed to capitalise on the longer-term trends in our markets, in particular the shift to digital enablement in education,” he added.
Those comments from Brooks will be among the last he shares with investors as he prepares to depart the firm at the end of next month.
His decision to step down as CEO marks the end of a long career working in various roles at the educational IT specialist.
“David has worked at RM for over 25 years. During the past eight years, as CEO, the company has undergone significant restructuring and development. RM has benefited greatly from his leadership and he leaves with the board’s thanks and best wishes for the future,” said RM chairman John Poulter.