IT system issues hit RM numbers

Educational specialist RM has indicated that its 2022 fiscal year was hit by costs associated with rolling out IT systems.

The firm shared preliminary numbers for the 12 months to 30 November 2022, with revenue improving by 4% year-on-year to £214.2m due to growth in its assessments, TTS and international operations.

The problems came from the Consortium side of the business, where the deployment of a new IT system caused problems and hit the bottom line.

RM saw profits of £4.2m in 2021 slide to a statutory loss of £14.5m last year. That also sparked net debts to climb from £18.3m to £46.8m.

The positives are that it has now completed the IT implementation in Consortium, gained access to fresh banking facilities, and is set to raise up to £16m with the sale of its RM Integris and RM Finance businesses.

Mark Cook, chief executive of RM, who took up that role in January 2023, was clear about the challenges the business had faced in the past fiscal year, but also stressed its strengths.

“RM’s performance in FY2022 was materially impacted by the challenges associated with the IT implementation project in our Consortium business. These challenges led to us having to take a number of actions, including suspending the payment of dividends. I recognise that there is much to be done to rebuild value for our stakeholders, but I’m pleased to report that we now have a much more stable financial and operational position,” he said.

“My priorities as RM’s CEO are clear. Firstly, to continue to strengthen the company’s finances, secondly, to review the IT enterprise architecture, and thirdly, to embed a transformation approach across the business. The third priority is about retaining the 50 years of education IP in the company, but also to better leverage the product opportunities in the education sector and ensure a sharper focus on customer excellence and satisfaction,” he added.

In Cook’s favour is the work already done by predecessors to transform the business to a more service- and software-led operation, including selling and identifying non-core assets that can be divested. In addition, fiscal 2023 won’t be overshadowed by further painful experiences with the IT system.

“While there is much to be done, the business and market fundamentals are positive and the whole team at RM are focused on delivering for our customers, improving outcomes for learners and unlocking value for all our stakeholders,” he said.

Cook was not the only one commenting for the first time on annual results, with RM chair Helen Stevenson also sharing her views, emphasising that the business was continuing to transform but had the fundamentals to emerge from a two-year change programme as a stronger outfit.

“RM has market-leading positions, channel strength and a good product and market fit across its portfolio. The business operates in an important and resilient marketplace, and is well-positioned to deliver sustainable growth in response to a number of positive structural trends in the education market,” she stated.

“However, as the team had already acknowledged, there is a need for a period of transformation to improve the way in which RM is structured and executes in order to be able to deliver effectively on these opportunities.”