RM (RM) H2 2024 earnings summary

Executive summary

• FY2024 marked a year of transformation, with all business units profitable on an adjusted basis and a simplified operating model delivering improved efficiency and cost savings.

• Adjusted operating profit rose to £8.6 million from £0.3 million year-over-year, and adjusted EBITDA nearly doubled to £13.1 million, up 87.2%.

• Major contract wins and renewals, including International Baccalaureate and Cambridge University Press, drove a record contracted order book, with Assessment's order book more than doubling to £95.7 million.

• Closure of the loss-making Consortium business and consolidation of distribution centers resulted in all group divisions becoming profitable and contributed to £10.6 million in annualized cost savings.

• Over 124 new products launched, including AI-driven innovations and managed services for UK schools.

Financial highlights

• Adjusted operating profit reached £8.6 million, ahead of market consensus, and adjusted EBITDA rose to £13.1 million.

• Revenue from continuing operations declined 5.5% to £166.1 million, mainly due to ending non-core and legacy contracts.

• Statutory loss after tax was £4.7 million, a significant improvement from £29.1 million loss in 2023.

• Operating cash flow swung to a £11.9 million inflow from a £4.7 million outflow last year.

• Exceptional costs totaled £13.3 million, mainly from restructuring and goodwill impairment.

Outlook and guidance

• Revenue from continuing operations is expected to grow in FY2025, with strong order books and new contracts driving growth, though UK school budget pressures persist.

• Full-year outlook remains in line with market expectations; further profitability growth anticipated, supported by cost savings and digital assessment contracts.

• No material new cost savings expected; continued investment in go-to-market activities and the Global Accreditation Platform.

• Adjusted net debt expected to remain stable, with restructuring costs and pension contributions to materially reduce.

• Digital assessment transition expected to drive significant medium-term profitability.