RM plc (RM.) RM plc: Interim Results for the six months ended 31
May 2022 23-Aug-2022 / 07:00 GMT/BST Dissemination of a Regulatory
Announcement that contains inside information in accordance with
the Market Abuse Regulation (MAR), transmitted by EQS Group. The
issuer is solely responsible for the content of this
announcement.
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
23 Aug 2022
RM plc
Interim Results for the six months ended 31 May 2022
RM plc ("RM"), a leading supplier of technology and resources to
the education sector, reports its interim results for the period
ended 31 May 2022.
Headlines
-- Revenue up 4% driven by growth in RM Resources and the return
of UK school exams in RM Assessment
-- Positive underlying progress on path to sustainable growth
including encouraging wins across allDivisions
-- Adjusted operating profit decline of GBP3.6m reflects the
required turnaround in the RM Technologydivision, impacts
associated with the IT implementation programme and increased
freight costs in RM Resources
-- Statutory loss after tax of GBP5.9m (2021: GBP2.0m profit)
due to lower operating profits and higher expensedinvestment
program costs GBP7.7m (2021: GBP3.4m)
-- Implementation of new IT platform proving more challenging
than anticipated, leading to extendedtimelines and increased
project cost
-- Net debt of GBP41.5m, with normal seasonal working capital
movements and elevated IT project spend. Bankcovenants relaxed at
May 2022 and November 2022
-- Payment of dividend paused due to elevated debt levels. Board
remains committed to a sustainable dividendpolicy and will review
again ahead of the preliminary results.
-- 31 May 2021 Pension triennial concluded with scheme deficit
reducing from GBP46.5m to GBP21.6m (IAS19accounting basis is a
surplus of GBP38.7m)
Outlook
-- School funding is increasing in the UK, but school budgets
have challenging headwinds notably salaries,energy costs and
inflation which will impact discretionary spend
-- Underlying market drivers continue to strengthen, confirming
long-term growth potential with leadershippositions in resilient
markets
-- Improving underlying sales momentum in each division and
phasing impacts of delayed shipments in RMResources from H1 to H2
supports positive revenue outlook
-- Macroeconomic environment is challenging and together with IT
implementation impacts, will dilute profitconversion in the
short-term
GBPM H1 2022 H1 2021** Variance
Revenue 100.3 96.1 +4%
Adjusted* operating profit 5.0 8.6 -42%
Adjusted* operating profit margin 5.0% 9.0% -4.0pp
Adjusted* profit before tax 4.2 8.0 -47%
Statutory (loss)/ profit before tax (7.2) 2.9 -345%
Statutory (loss)/ profit after tax (5.9) 2.0 -401%
Adjusted* diluted EPS 4.0p 7.5p -46%
Diluted EPS (7.1)p 2.3p -404%
Dividend per share 0.0p 1.7p -
Net debt 41.5 10.5
IAS 19 Pension surplus 38.7 5.5
* Throughout this statement, adjusted operating profit, adjusted
profit before tax and EPS are stated after adjusting items (See
Note 2) which are identified by virtue of their size, nature and/or
incidence. The treatment of adjusted items is applied consistently
period on period and is consistent with the way that underlying
trading performance is measured by management.
** Restated as described in Note 2.
Commenting on the results, Neil Martin, Chief Executive of RM,
said:
"RM is starting to build encouraging revenue momentum across the
Group which demonstrates the strength of our offer and market
positioning. At the same time, it is clear that there is more work
to do to translate this into the levels of operating margin that we
aspire to. We are addressing this through the 2-year transition
period which we outlined at the beginning of the year.
Our long-term outlook remains positive, with the opportunity to
capitalise on leading positions in resilient markets. Nearer-term,
the work required to improve our operating platform and manage the
challenging economic backdrop creates volatility that we must
manage while we structure ourselves for long-term, sustainable
success."
Notes to Editors:
RM provides market-leading products and services to educational
institutions, exam bodies and international governments which
improve, simplify and support education and learning.
The education sector is transforming, and RM is well positioned
to capitalise on this through its three divisions:
-- RM Resources is the established provider of education
resources for early years, primary schools andsecondary schools
across the UK and to 80 countries internationally.
-- RM Assessment (formerly RM Results) is a leading provider of
assessment software, supporting examawarding bodies, universities
and governments worldwide to digitise their assessment
delivery.
-- RM Technology (formerly RM Education) is a market-leading
supplier of ICT software, technology andservices to UK schools and
colleges.
Presentation and live webcast:
A webcast for analysts and investors will take place at 9.00am
and can be accessed via the following website:
https://www.investis-live.com/rmplc/62bdce7959bc741400218972/daswf
The webcast will also be accessible via a live conference
call:
Dial-in (UK): 0800 640 6441
Dial-in (Local): 020 3936 2999
Dial-in (all other locations): +44 20 3936 2999
Access code: 803178
For additional details and registration for the webcast, please
contact Headland Consultancy on 020 3805 4822/
rm@headlandconsultancy.com.
Contacts:
RM plc
Neil Martin, Chief Executive Officer
Emmanuel Walter, Chief Financial Officer (interim)
Headland Consultancy
Stephen Malthouse (smalthouse@headlandconsultancy.com) 0203 805
4822
Jemma Savage (jsavage@headlandconsultancy.com)
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/ 2014 which is
part of UK law by virtue of the European Union (withdrawal) Act
2018. The person responsible for arranging for the release of this
Announcement on behalf of the Company is Neil Martin, Chief
Executive Officer.
RM plc
Interim results for the six months ended 31 May 2022
6 months to May 2022 6 months to May 2021** 12 months to November 2021
Revenue GBP100.3m GBP96.1m GBP210.9m
Adjusted* operating profit GBP5.0m GBP8.6m GBP18.5m
Statutory operating (loss)/profit GBP(6.5)m GBP3.6m GBP7.0m
Adjusted* profit before tax GBP4.2m GBP8.0m GBP17.1m
Statutory (loss)/profit before tax GBP(7.2)m GBP2.9m GBP5.6m
Adjusted* profit after tax GBP3.4m GBP6.2m GBP13.8m
Statutory (loss)/profit after tax GBP(5.9)m GBP2.0m GBP4.2m
Adjusted* diluted Earnings Per Share 4.0p 7.5p 16.4p
Diluted (Loss)/Earnings Per Share (7.1)p 2.3p 5.0p
Ordinary dividend per share 0.0p 1.7p 4.7p
Net debt GBP41.5m GBP10.5m GBP18.3m
*As outlined above Adjusted operating profit and adjusted profit
before tax are before the amortisation of acquisition related
intangible assets, dual run costs, configuration of SaaS licenses
(ERP) and restructuring costs. Refer to Note 5.
**Restated as per Note 2.
Overview
Revenue performance was satisfactory in the first half of the
year and reflects the return of UK school exams. First half order
intake was positive for RM Resources, although delayed shipments at
the end of the period associated with the IT implementation
programme reduced conversion to revenue. Since the period end, the
TTS brand in RM Resources experienced its strongest two months
order intake in June and July. There has also been encouraging
signs of an improving sales pipeline within RM Assessment either
signing or achieving preferred bidder status on 10 new contracts in
the half and RM Technology securing the largest school
infrastructure contract in the marketplace.
Operating profit and margins are reduced reflecting the required
turnaround in the Technology Division and the impact of the
transition programme, in particular the IT platform implementation,
alongside continued inflationary pressures.
The rollout of the IT platform has been more challenging than
anticipated. The timeframe and cost for full implementation will
therefore be extended and the associated benefits will take longer
to come through.
As a result of the elevated net debt levels associated with the
IT platform implementation, the Board has taken a prudent view of
balance sheet management and decided to pause the dividend payment
in the short term. It remains committed to a sustainable dividend
policy and will review this position again ahead of the preliminary
results.
Our banking partners have increased the net debt / adjusted
EBITDA ratio covenant for May and November 2022 to 3.0x from 2.5x.
As set out in the net debt section, as this amendment was approved
post period end, bank borrowings have been classified as current
liabilities at 31 May 2022.
Building RM for the future
As we set out earlier in the year, to capitalise on the market
opportunities, we are in a 2-year transition phase to strengthen
our channel advantage, unlock growth and improve operating
leverage.
Market - a resilient demand picture
-- Technology continues to expand across Education, with the
market reverting to more normal, long-termgrowth rates after a
pandemic driven spike in hardware purchasing. We are one of the
largest providers oftechnology to UK schools and well placed to
support schools as they look to benefit from the myriad of
technologyavailable to them.
-- The English Government has made clear their intention to
complete the conversion of state-maintainedschools to Academies by
2030, with guidance for schools to be part of a trust of at least
10 schools. We arestarting to see larger trusts showing preference
to work with larger providers, like RM, who can meet
theirgeographic and complex technology needs.
-- It is "when not if" that assessment will become digital, and
we are seeing improving demand for digitalassessment capabilities
from a breadth of customer segments, including winning our first
customer in HigherEducation. Customers of all types are seeking a
partner who can help them move along a digital maturity curve
overtime, and RM has the breadth of product portfolio and
experience of delivering for some of the world's mostdemanding
assessment customers.
-- Governments around the world are investing additional funding
in Education to mitigate learning lost as aresult of Covid. The
pandemic has shone a spotlight on critical elements of education
where RM has strengthincluding the STEM curriculum and Early Years
development.
Transition progress update
We have aligned our divisional structure to our market
opportunities to enable a sharper focus and appointed a new
Managing Director for the Technology Division where the greatest
turnaround is required.
Evolution, a Groupwide IT platform change is in the
implementation phase and, as noted, has proven to be more
challenging than anticipated. This is a replacement of legacy core
systems and comprises updates to business processes and technology,
delivering warehouse automation, Cloud based ERP and e-commerce.
This will provide a critical platform from which to improve our
customer service, increase our efficiency and automation, and
ensure that we are better using the data we have within the company
to aid decision making and create customer value.
The Divisions are at different stages of development with their
own short term execution priorities. RM Resources is looking to
embed key systems and warehouse changes while managing inflationary
challenges; RM Assessment is focused on customer acquisition and
improving scalability; and RM Technology is focused on improving
its operating model to deliver value, rebuild its margin and expand
on its Managed Services solution set.
Outlook
Although school funding is increasing in the UK, the backdrop
with regard to salaries, energy costs and inflation create
headwinds that will impact school budgets and will need to be
monitored carefully over the next 18 months.
Underlying revenue trends are strengthening with each division
looking to growth this year. Profit conversion will remain subdued
in the short-term as we progress through transition and have
elevated commercial uncertainty both from the macro-economic
environment and from the impacts of the IT platform
implementation.
Transitions are never simple, but the opportunity for RM is both
material and realistic. Looking further out, the investments and
changes we make over the next 2 years pave the way for consistent
mid-single-digit, profitable revenue growth, improving operating
leverage and attractive cash generation. We hold leading positions
in the markets in which we operate and leading customer and channel
scale, enabling us to deliver improved shareholder returns while
delivering enhanced value and experiences for our customers and
employees.
Financial performance
RM's financial performance for the period reflects a recovery
from the material impacts from Covid with revenue growth but also
the dynamics of managing a business transition with a significant
IT transformation against a volatile economic backdrop.
Group revenue increased by 4% to GBP100.3m (H1 2021: GBP96.1m)
with strong international sales growth in RM Resources and a full
series of UK school exams. We continue to see positive customer
demand for our products and services. It is worth noting that
revenue was lower than anticipated, held back by the short-term
impact in RM Resources of delayed shipments at the end of the
period due to the implementation of the new IT platform.
Adjusted Operating Profit decreased to GBP5.0m (H1 2021:
GBP8.6m). The profit reduction is most notable in the RM Technology
Division which is starting a turnaround under new leadership. RM
Resources profitability has been impacted by delayed shipments and
elevated indirect costs associated with the IT implementation and
higher than anticipated freight costs. All divisions have a number
of actions to mitigate the high inflation environment, but it is
harder to manage in some areas, most notably where we have
long-term contracts with exposure to support from our Indian
operation where inflation is higher than that in the UK, resulting
in increased wage costs.
Statutory Operating Profit decreased to a loss of GBP(6.5)m (H1
2021: profit of GBP3.6m) predominately driven by the continuation
of the warehouse automation and IT platform investment programmes.
In the period GBP7.7m (H1 2021: GBP3.4m) of costs were incurred
relating to the Configuration of SaaS licenses as part of our IT
system implementation and GBP2.8m (H1 2021: GBP0.6m) of dual
running costs relating to the continuation of the both the
warehouse and IT platform implementation.
Adjusted profit before tax was GBP4.2m, down from GBP8.0m in H1
2021, which alongside the reduced adjusted operating profit, was
due to higher interest costs. Adjusted Diluted earnings per share
decreased to 4.0p (H1 2021: 7.5p). Statutory loss after tax was
GBP(5.9)m (H1 2021: profit of GBP2.0m).
Net debt
The first half of the financial year is normally a working
capital outflow period for the Group with inventory purchases ahead
of the second half peak selling period and the majority of cash
inflow from the examinations sessions also coming the second half.
2022 has seen a return of that seasonality with GBP10.9m of
adjusted working capital outflows in the period. As a result of
this return to more normal seasonal working capital movements and
the continuation of investment programmes, we closed the period at
GBP41.5m (H1 2021: GBP10.5m). The Group reports an adjusted cash
outflow from operations of GBP(3.6)m (H1 2021: cash inflow of
GBP8.8m, H1 2019: cash outflow GBP(1.2)m).
The continuation of the warehouse automation and IT platform
investment programmes contributed GBP11.8m of the cash outflow.
Following the decision to extend the timeframe of the rollout of
the IT platform we now anticipate the programmes to continue into
FY23 and we expect the associated benefits to be delayed and the
costs to support the change programmes to continue.
In the period, we opted to utilise a one-year extension to our
GBP70m revolving credit facility, which will now run to July 2024.
Increased net debt and a decline in operating performance has led
to a net debt/EBITDA ratio outside of our existing covenants at 31
May 2022. However, our lending banks are supportive of the business
and its future prospects and accordingly have agreed to increase
the net debt to EBITDA leverage covenant to 3.0x from 2.5x for the
May and November 2022 period end tests whilst the IT programme
spend remains elevated. The extension of the May 2022 net debt to
EBITDA leverage covenant was granted after 31 May 2022, the
borrowings have been reclassified at the balance sheet date to
current liabilities notwithstanding that the lenders have made
clear they currently have no intention of accelerating all or any
part of the loan repayments. The borrowings are anticipated to
revert to non-current liabilities at 30 November 2022.
Pension
The 31 May 2021 triennial valuation for the current schemes has
been completed with the total scheme deficit reducing from GBP46.5m
to GBP21.6m. The deficit recovery payments of GBP4.4m per annum
will continue until end 2024, before reducing to GBP1.2m until the
end of 2026 when recovery payments cease
The IAS19 net pension position in respect of RM's defined
benefit pension schemes improved by GBP8.3m in the half, resulting
in a surplus of GBP38.7m (30 November 2021: GBP30.4m surplus). The
improvement was driven primarily by an increase in the discount
rate, which is based on corporate bond yields, but partially offset
by reduced scheme asset valuations associated with what is a
challenging equities market.
Dividend
The Board, taking a prudent view of the balance sheet, has
decided not to pay an interim dividend in 2022 given the elevated
costs and timeline associated with the deployment of the IT
platform. The Board remains committed to a sustainable dividend and
will review this position again ahead of the preliminary results.
An interim dividend of 1.7p was paid in 2021 and a final dividend
of 3.0p was paid for the year ended 30 November 2021.
Divisional review
RM Resources
RM Resources provides education resources and supplies to
schools and nurseries in the UK and internationally. Products
supplied are a mix of own designed items, own branded and
third-party products.
6 months to May 2022 6 months to May 2021 12 months to November 2021
RM Resources revenue GBP51.6m GBP48.2m GBP114.4m
RM Resources adjusted operating profit GBP1.2m GBP2.9m GBP10.1m
Revenue increased by 7% to GBP51.6m (H1 2021: GBP48.2m) driven
by strong International and UK curriculum revenues despite some
shipments delayed at the period end associated with the IT
implementation programme.
Adjusted operating profit decreased to GBP1.2m (H1 2021:
GBP2.9m). Profitability was held back by higher than anticipated
freight costs and impacts associated with the IT implementation for
the Consortium brand which delayed product shipments from April and
drove inefficiencies which elevated warehousing, distribution, and
packaging expenditure. Progress is being made and these impacts are
expected to be short term.
Since the period end, the TTS brand experienced its strongest
ever UK order intake months in June and July highlighting the brand
strength and positioning.
Revenue in the UK increased by 2% to GBP42.9m (H1 2021:
GBP42.0m) with growth in curriculum sales more than offsetting the
impact of delayed commodity shipments.
International revenues comprise two key channels; international
distributors, through which we sell own-developed products, and
international English curriculum schools to whom we sell a wider
portfolio of education supplies.
International revenues within RM Resources increased by 41% to
GBP8.7m (H1 2021: GBP6.2m). The increase is driven by improvements
across most geographies but notably Europe where strong performance
materially exceeded both 2021 and pre-pandemic levels in 2019.
RM Assessment
RM Assessment provides IT software and end-to-end digital
assessment services to enable online exam marking, online testing
and the management and analysis of educational data. Customers
include government ministries, exam boards and professional
awarding bodies in the UK and overseas.
6 months to May 2022 6 months to May 2021 12 months to November 2021
RM Assessment revenue GBP18.2m GBP15.5m GBP31.9m
RM Assessment adjusted operating profit GBP2.8m GBP3.3m GBP5.7m
Revenue was up 17% versus prior year at GBP18.2m (H1 2021:
GBP15.5m) with 2022 being the first period where we have seen a
full series of exams sat since 2019.
Adjusted operating profit decreased by GBP0.5m to GBP2.8m (H1
2021: GBP3.3m) with revenue growth offset by the absence of
one-time benefits experienced in 2021 and higher costs in the short
term associated with software development and hosting.
After a period of disruption brought about by Covid, RM
Assessment is now seeing more positive signs around the development
and conversion of its sales pipeline. During the period, 10 new
contracts where either signed or reached preferred bidder status
with a particular focus on the professional qualifications
sector.
RM Technology
RM Technology provides ICT software and services to UK schools
and colleges.
6 months to May 2022 6 months to May 2021 12 months to November 2021
RM Technology revenue GBP30.4m GBP32.3m GBP64.6m
RM Technology adjusted operating profit GBP2.5m GBP4.6m GBP7.1m
Revenue decreased by 6% to GBP30.4m (H1 2021: GBP32.3m) driven
primarily by reduced hardware sales and managed services
revenues.
Adjusted operating profit decreased to GBP2.5m (H1 2021:
GBP4.6m), which in addition to lower revenues was impacted by
elevated service delivery and transition costs and inflation
impacts.
Under new leadership the division is focussed on improving its
operating model to deliver greater value to our target customers,
rebuild operating margin and revising its customer offer to a
clearer set of strategic priorities. This will take time and profit
recovery will lag revenue growth, but RM Technology benefits from a
strong market position and channel reach. Early positive inroads
are being made in its more focussed target segments, including
securing the largest schools infrastructure contract in the market
in the first half which should enable the division to return to
growth in the full year.
Corporate Costs
Corporate costs in the period were GBP1.5m (H1 2021 GBP2.1m). H1
2021, had higher costs associated with Board recruitment and bonus
expense.
Statement on Principal Risks and Uncertainties
Pursuant to the requirements of the Disclosure and Transparency
Rules, the Group provides the following information on its
principal risks and uncertainties. The Group considers strategic,
operational and financial risks and identifies actions to mitigate
those risks. Risk management systems are monitored on an ongoing
basis. The principal risks and uncertainties detailed within the
Group's 2021 Annual Report remain applicable. This is available
from the RM website: www.rmplc.com.
In summary, those risks relate to public policy, education
practice, operational execution, supply chain, data and business
continuity, environmental, people, transformation, innovation,
dependence on key contracts, the impact of the Covid pandemic,
pensions and treasury.
Inflation and investment programme challenges have impacted the
Group in the period; however, the principal risks remain aligned to
those reported in the annual report.
During 2022, the Group now considers the level of borrowings and
compliance of debt covenant reporting as a new principal risk. The
risk is set out below
Risk and Description and likely impact
categorisation Mitigation
The Group is funded by a bank facility of GBP70m
that is subject to two key financial covenants.
Level of borrowings Maximum Net debt to EBITDA ratio of 2.5x and at The Company reviews both performance and cash
and debt compliance least 4x interest cover/ EBITDA ratio. The flow forecasts on a monthly basis of the Group.
(linked to the covenants are based on a rolling 12 months The Group assesses the cash flow impacts of new
strategic objective of results calculated at May and November annually. contracts and negotiates appropriately. The
strong financial Group manages the timing of investments in
discipline) relation to their impacts on the business and
the borrowings and debt compliance.
The current high levels of investments in our IT
programme and the warehouse strategic project
have negatively impacted net debt. At the same
time the levels of earnings have been impacted
by Covid in 2021, higher service delivery costs
and the transitional performance impacts of the
Consortium brand warehouse go-live.
Alternative Performance Measures (APMs)
In response to the Guidelines on APMs issued by the European
Securities and Markets Authority (ESMA) and the Financial Reporting
Council (FRC), additional information on the APMs used by the Group
is provided below.
The following APMs are used by the Group:
-- Adjusted operating profit
-- Adjusted operating margin
-- Adjusted profit before tax
-- Adjusted tax
-- Adjusted profit after tax
-- Adjusted Earnings per Share
-- Adjusted diluted earnings per share
-- Adjusted cash conversion
-- Net debt
-- Average net debt
Further explanation of what each APM comprises and
reconciliations between Statutory reported measures and adjusted
measures are shown in note 5
The Board believes that the presentation of the Group results in
this way is relevant to an understanding of the Group's financial
performance, as adjustment items are identified by virtue of their
size, nature and/or incidence. This presentation is consistent with
the way that financial performance is measured by management,
reported to the Board, the basis of financial measures for senior
management's compensation schemes and assists in providing
supplementary information that assists the user to understand
better the financial performance, position and trends of the Group.
In determining whether an event or transaction is an adjustment,
the Board considers both quantitative and qualitative factors such
as the frequency or predictability of occurrence.
The APMs used by the Group are not defined terms under IFRS and
may therefore not be comparable with similarly titled measures
reported by other companies. They are not intended to be a
substitute for, or superior to, GAAP measures. All APMs relate to
the current period results and comparative periods where provided
and are consistently defined from period to period.
Going concern
The condensed financial statements have been prepared on a going
concern basis which the directors consider to be appropriate for
the reasons set out further below.
The Balance sheet as at 31 May 2022, discloses our borrowings as
current liabilities, as approval for the increase in the debt
covenant was granted after the balance sheet date (increasing the
Net Debt/EBITDA covenant to 3.0x from 2.5x). RM has also been
granted an increase of the same covenant measure to 3.0 times for
30 November 2022.
In assessing the going concern position the Directors have
considered the balance sheet position as included on page 11 and
the level of available finance not drawn down. Whilst the Group had
net current liabilities of GBP32.6m (30 November 2021 GBP1.0m),
liquidity headroom was GBP24.1m. RM Group plc has a bank facility
("the facility") which totalled GBP70m at the date of this report.
The facility maturity was extended in May and is committed until
July 2024. The terms of the facility remain consistent with those
of the prior facility agreement, see Note 31 of the 2021 Annual
Financial Statements for further details. The debt facilities are
subject to financial covenants of a maximum of 2.5 times Net
Debt/EBITDA (extended to 3.0 for May 2022 and November 2022) and at
least 4 times interest cover/EBITDA. These covenants are tested
annually in May and November. At 31 May 2022 the results of the
covenant tests were 2.61 and 13.73 respectively.
The directors have prepared cash flow forecasts for the period
to the end of November 2023 which indicate that there is liquidity
and covenant headroom at each measurement period. A number of
reasonably plausible downside scenario sensitivities have been
assessed alongside a review of mitigating actions which are within
management's control. If the downside scenarios are all applied
together without mitigating actions, it would result in the net
debt/EBITDA covenant as at May 2023 being exceeded. Applying the
mitigating actions the Directors are satisfied that the company
will have sufficient funds to meet its liabilities as they fall due
for at least 12 months from the date of this report.
Further detail on the Directors assessment of Going concern
including details in relation to the base assessment and the
reasonably plausible downside scenario are set out in note 2.
Responsibility statement of the Directors in respect of the
half-yearly financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with United Kingdom adopted IAS34 Interim Financial
Reporting;
-- the interim management report includes a fair review of the
information required by: a. DTR 4.2.4R of the Disclosure Guidance
and Transparency Rules, being the condensed set of
financialstatements have been prepared in accordance with the
applicable set of accounting standards, gives a true and fairview
of the assets, liabilities, financial position and profit or loss
of the issuer, or the undertakings includedin the consolidation as
a whole b. DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important eventsthat have occurred
during the first six months of the financial year and their impact
on the condensed set offinancial statements; and a description of
the principal risks and uncertainties for the remaining six months
ofthe year; and c. DTR 4.2.8R of the Disclosure Guidance and
Transparency Rules, being related party transactions that havetaken
place in the first six months of the current financial year and
that have materially affected the financialposition or performance
of the entity during that period; and any changes in the related
party transactionsdescribed in the last annual report that could do
so.
By order of the Board,
Neil Martin
Chief Executive Officer
22 August 2022
Condensed Consolidated Income Statement
For the 6 months ended 31 May 2022
6 months ended 31 May 2021
6 months ended 31 May 2022 Year ended 30 November 2021
Restated **
Adjusted Adjustments Total Adjusted Adjustments Total Adjusted Adjustments Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 100,320 - 100,320 96,059 - 96,059 210,853 - 210,853
Cost of sales (66,160) - (66,160) (63,122) - (63,122) (140,220) - (140,220)
Gross profit 34,160 - 34,160 32,937 - 32,937 70,633 - 70,633
Operating expenses 5 (29,158) (11,464) (40,622) (24,325) (5,042) (29,367) (52,164) (11,483) (63,647)
Profit/(Loss) from 5,002 (11,464) (6,462) 8,612 (5,042) 3,570 18,469 (11,483) 6,986
operations
Other income 315 - 315 - - - 28 - 28
Finance costs (1,086) - (1,086) (621) - (621) (1,396) - (1,396)
Profit / (loss)before 4,231 (11,464) (7,233) 7,991 (5,042) 2,949 17,101 (11,483) 5,618
tax
Tax 6 (847) 2,186 1,339 (1,746) 752 (994) (3,282) 1,858 (1,424)
Profit/ (loss) for the 3,384 (9,278) (5,894) 6,245 (4,290) 1,955 13,819 (9,625) 4,194
period
(Loss)/Earnings per 7
ordinary share:
Basic 4.1p (7.1)p 7.5p 2.4p 16.6p 5.0p
Diluted 4.0p (7.1)p 7.5p 2.3p 16.4p 5.0p
Paid and proposed 8
dividends per share:
Interim - 1.7p 1.7p
Final 3.0p
- -
** Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2.
The accompanying notes form part of these financial
statements.
All amounts were derived from continuing operations.
Condensed Consolidated Statement of Comprehensive Income
For the 6 months ended 31 May 2022
6 months ended 31
6 months ended 31 May 2021 Year ended 30
May 2022 November 2021
Restated **
GBP000 GBP000 GBP000
(Loss) / profit for the period (5,894) 1,955 4,194
Items that will not be reclassified subsequently to profit
or loss:
Defined benefit pension scheme remeasurements 5,703 22,146 44,860
Tax on items that will not be reclassified subsequently to (1,570) (4,577) (10,364)
profit or loss
Items that are or may be reclassified subsequently to
profit or loss:
Fair value gain/(loss) on hedged instruments 88 (43) 242
Tax on items that are or may be reclassified (15) - (45)
subsequently to profit or loss
Exchange gain/(loss) on translation of overseas 250 (265) (180)
operations
Other comprehensive income 4,456 17,261 34,513
Total comprehensive (expense) / income (1,438) 19,216 38,707
** Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2.
Condensed Consolidated Balance Sheet
At 31 May 2022
31 May 2021
31 May 2022 30 November 2021
Note Restated **
GBP000 GBP000 GBP000
Non-current assets
Goodwill 49,458 49,262 49,202
Other intangible assets 24,118 19,392 23,405
Property, plant and equipment 16,647 13,509 16,217
Right of use asset 16,976 17,675 18,018
Defined Benefit Pension Scheme Surplus 14 39,719 10,148 35,037
Other receivables 83 63 82
Contract fulfilment assets 10 4,677 2,729 4,169
Deferred tax assets 156 1,497 156
151,834 114,275 146,286
Current assets
Inventories 23,140 20,016 19,055
Trade and other receivables 9 38,503 28,899 33,865
Contract fulfilment assets 10 2,155 1,771 1,360
Held for Sale Asset 3,034 4,797 3,034
Corporation tax assets 6,047 3,087 3,665
Cash and short-term deposits 4,258 4,334 3,560
77,137 62,904 64,539
Total assets 228,971 177,179 210,825
Current liabilities
Trade and other payables 11 (58,256) (55,220) (58,243)
Lease liabilities (3,076) (3,099) (3,126)
Tax liabilities - (162) -
Provisions 13 (1,677) (165) (2,066)
Overdraft (1,899) (2,977) (2,082)
Borrowings 10 (43,824) - -
(108,732) (61,623) (65,517)
Net current (liabilities) / assets (31,595) 1,281 (978)
Non-current liabilities
Other payables 11 (3,825) (3,616) (3,269)
Lease liabilities (17,090) (17,361) (17,803)
Provisions 13 (1,682) (3,658) (1,475)
Deferred tax liability (13,098) (5,302) (10,830)
Defined Benefit Pension Scheme obligation 14 (1,068) (4,603) (4,686)
Borrowings 12 - (11,845) (19,744)
(36,763) (46,385) (57,807)
Total liabilities (145,495) (108,008) (123,324)
Net assets 83,476 69,171 87,501
Equity attributable to shareholders
Share capital 1,917 1,917 1,917
Share premium account 27,080 27,080 27,080
Own shares (444) (444) (444)
Capital redemption reserve 94 94 94
Hedging reserve 265 (108) 177
Translation reserve (632) (964) (882)
Retained earnings 55,196 41,596 59,559
Total equity 83,476 69,171 87,501
** Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2.
Condensed Consolidated Statement of Changes in Equity
for the 6 months ended 31 Share Share Own Capital Hedging Translation Retained
May 2022 capital premium shares redemption reserve reserve earnings Total
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 December 2021 1,917 27,080 (444) 94 177 (882) 59,559 87,501
(Loss) for the period - - - - - - (5,894) (5,894)
Other comprehensive income - - - - 88 250 4,118 4,456
Total comprehensive - - - - 88 250 (1,776) (1,438)
(expense)/income
Transactions with owners of
the Company:
Share-based payment awards - - - - - - - -
exercised
Share-based payment fair - - - - - - (89) (89)
value adjustments
Ordinary dividends paid - - - - - - (2,498) (2,498)
At 31 May 2022 1,917 27,080 (444) 94 265 (632) 55,196 83,476
for the 6 months ended 31 May Share Share Own Capital Hedging Translation Retained Total (
2021 capital premium shares redemption reserve reserve earnings Restated**)
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 December 2020 (restated 1,917 27,080 (841) 94 (65) (702) 25,324 52,807
**)
Profit for the period - - - - - - 1,955 1,955
(restated **)
Other comprehensive income/ - - - - (43) (262) 17,566 17,261
(expense)
Total comprehensive income/ - - - - (43) (262) 19,521 19,216
(expense) (restated **)
Transactions with owners of the
Company:
Share-based payment awards - - 397 - - - (397) -
exercised
Share-based payment fair value - - - - - - (354) (354)
adjustments
Ordinary dividends paid - - - - - - (2,498) (2,498)
At 31 May 2021 1,917 27,080 (444) 94 (108) (964) 41,596 69,171
** Amounts at 1 December 2020 and 31 May 2021 have been restated
consistently with the adjustments made at 30 November 2021, refer
to note 2.
for the year ended 30 Share Share Own Capital Hedging Translation Retained Total
November 2021 capital premium shares redemption reserve reserve earnings (Restated**)
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 December 2020
1,917 27,080 (841) 94 (65) (702) 25,324 52,807
(restated **)
Profit for the year - - - - - - 4,194 4,194
Other comprehensive - - - - 242 (180) 34,451 34,513
income/(expense)
Total comprehensive - - - - 242 (180) 38,645 38,707
income/(expense)
Transactions with owners of
the Company:
Share-based payment - - 397 - - - (397) -
awards exercised
Share-based payment fair - - - - - - (100) (100)
value adjustments
Ordinary dividends paid - - - - - - (3,913) (3,913)
At 30 November 2021 1,917 27,080 (444) 94 177 (882) 59,559 87,501
** Amounts at 1 December 2020 have been restated consistently
with the adjustments made at 30 November 2021, refer to note 2.
Condensed Consolidated Cash Flow Statement
6 months ended 31 May
6 months ended 31 May 2021 Year ended 30
2022 November 2021
Restated **
Note GBP000 GBP000 GBP000
(Loss)/ profit before tax (7,233) 2,949 5,618
Investment income (315) - (28)
Finance costs 1,086 621 1,396
(Loss)/Profit from operations (6,462) 3,570 6,986
Adjustments for:
Amortisation and impairment of intangible assets 1,048 1,398 2,406
Depreciation and impairment of property, plant 2,151 1,818 4,281
and equipment
Loss/ (gain) on disposal of property, plant and 73 46 (1,449)
equipment
Loss/ (gain) on foreign exchange derivatives (114) (48) 64
Share-based payment (credit) (89) (354) (100)
Increase /(decrease) in provisions 13 153 (419) (353)
Defined Benefit Pension Scheme administration 14 27 - 52
cost
Operating cash flows before movements in working (3,213) 6,011 11,887
capital
(Increase) in inventories (4,085) (1,422) (460)
(Increase)/ decrease in receivables (4,609) 2,358 (2,318)
(Increase) in contract fulfilment assets (1,303) (352) (1,381)
Movement in payables:
- increase/ (decrease) in trade and other 314 (1,453) 1,177
payables
- utilisation of provisions 13 (336) (191) (528)
Cash generated by operations (13,232) 4,951 8,377
Defined Benefit Pension Scheme cash (2,310) (2,204) (4,450)
contributions
Tax paid (211) (185) (135)
Net cash (outflow)/ inflow from operating (15,753) 2,562 3,792
activities
Investing activities
Interest received 4 - 28
Proceeds on disposal of property, plant and - - 3,214
equipment
Purchases of property, plant and equipment (857) (5,200) (8,024)
Purchases of other intangible assets (1,607) (1,663) (6,977)
Net cash (used in) investing activities (2,460) (6,863) (11,759)
Financing activities
Dividends paid 8 (2,498) (2,498) (3,913)
Drawdown of borrowings 24,000 7,000 15,000
Borrowing facilities arrangement and commitment (187) (154) (497)
fees
Repayment of principal elements of lease (1,509) (1,821) (3,889)
obligations
Interest paid (820) (265) (675)
Net cash generated by financing activities 18,986 2,262 6,026
Net (decrease)/increase in cash and cash 773 (2,039) (1,941)
equivalents
Cash and cash equivalents at the beginning of 1,478 3,461 3,461
the period/year
Effect of foreign exchange rate changes 108 (65) (42)
Cash and cash equivalents at the end of period/ 2,359 1,357 1,478
year
Cash at bank and in hand 4,258 4,334 3,560
Overdraft (1,899) (2,977) (2,082)
2,359 1,357 1,478
** Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2
Notes to the Condensed Interim Financial Statements
1. General information
RM plc ('Company') is incorporated in the United Kingdom and
listed on the London Stock Exchange. The unaudited Condensed
Consolidated Interim Financial Statements as at 31 May 2022 and for
the 6 months then ended comprise those of the Company and its
subsidiaries (together 'the Group').
The comparative figures for the financial year ended 30 November
2021 are not the Group's statutory accounts for that financial year
(see note 2). Those accounts have been reported on by the Group's
auditor and delivered to the registrar of companies. The report of
the auditor was (i) unqualified, (ii) did not include a reference
to any matters to which the auditor drew attention by way of
emphasis without qualifying their report, and (iii) did not contain
a statement under section 498 (2) or (3) of the Companies Act
2006.
Condensed Consolidated Income Statement presentation
The Directors assess the performance of the Group using an
Adjusted Operating Profit and Profit Before Tax. The Directors use
Adjusted Operating Profit and EPS before adjustments to profit
which are identified by virtue of their size, nature and/or
incidence. The treatment of adjusted items is applied consistently
period on period and is consistent with the way that underlying
trading performance is measured by management. Further details are
provided in note 2.
Other Comprehensive Income
During the period, GBP5.7m of actuarial profits relating to the
defined benefit pension scheme surplus have been recognised in
Other Comprehensive Income.
2. Accounting policies
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
United Kingdom adopted International Accounting Standard 34 Interim
Financial Reporting and in accordance with the Disclosure, Guidance
and Transparency rules of the United Kingdom's conduct
Authority.
The annual financial statements of the Group are prepared in
accordance with International Financial Reporting Standards (IFRSs)
in accordance with the Disclosure, Guidance and Transparency rules
of the United Kingdom's conduct Authority. As required by the
Disclosure and Transparency Rules of the Financial Conduct
Authority (FCA), the condensed set of financial statements has been
prepared applying the accounting policies and presentation that
were applied in the preparation of the Group's published
Consolidated Financial Statements for the year ended 30 November
2021.
The preparation of the Condensed Consolidated Interim Financial
Statements, in conformity with generally accepted accounting
principles, requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
Interim Financial Statements and the reported amounts of revenues
and expenses during the reporting period.
Although these estimates are based on the Directors' best
knowledge of current events and actions, actual results ultimately
may differ from those estimates.
In preparing these Condensed Consolidated Interim Financial
Statements, the critical judgements made by management in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the Consolidated
Financial Statements as at and for the year ended 30 November
2021.
Key sources of estimation uncertainty
In applying the Group's accounting policies the Directors are
required to make estimates and assumptions. Actual results may
differ from these estimates. The following are considered key
sources of estimation uncertainty:
Retirement benefit scheme valuation - The key estimation
sensitivities are the discount rate applied to pension liabilities
together with RPI/CPI and mortality. We note that every 0.1%
movement in discount rate has a c.GBP4m impact on the deficit and a
0.1% movement in RPI has a c.GBP3m impact.
Revenue from contracts over time - There is estimation relating
to the output methodology (of script volumes) to determine the
transaction price. This estimation was reassessed during H1 2022 to
reflect our latest expectations.
Critical accounting judgements
Revenue from RM Assessment contracts - A number of judgements
are made to determine performance obligations and the allocation of
revenue to those performance obligations. Each contract is analysed
separately to identify the performance obligations. Judgements are
made as to whether goods and services should be combined and
whether revenue should be recognised at either a point in time or
over time. Judgement is also required to allocate the transaction
price to each performance obligation, based on an estimation of the
standalone selling price for scanning and use of the residual
method to determine a value for E-marking.
In concluding that the going concern assessment was appropriate
and that there were no material uncertainties the Directors have
made a number of significant judgements as detailed below in Note
2.
Restatement
As part of the strategy review carried out in 2021, the
Directors considered that certain activities previously classified
as Research and Development and certain selling and distribution
(all administration activities) are more appropriately classified
as part of Cost of Sales. This classification was applied in the
Consolidated Financial Statements for the year ended 30 November
2021, but the six months ended 31 May 2021 has been restated to
reflect a restatement of GBP4.6m. This has had no impact on the
operating profit reported.
In addition, also as set out in the Consolidated Financial
Statements for the year ended 30 November 2021, the Group had
reflected the impact of their review of the IFRIC interpretation on
the accounting treatment for configuration and customisation costs
in a cloud computing arrangement. As a result, in these financial
statements the financial impact on in the period ended 31 May 2021
has also been restated. GBP3.4m of costs previously capitalised as
intangible software assets have been expensed, and the Group has
also reclassified GBP0.4m of dual run license costs from operating
expenses to adjusted operating expenses. The impact of these
adjustments is to reduce statutory operating profit by GBP3.4m and
profit after tax and net assets by GBP2.6m. EPS reduced by 12p.
This treatment is in line with the treatment of both items in the
year ended 30 November 2021.
Alternative Performance Measures (APMs)
In response to the Guidelines on APMs issued by the European
Securities and Markets Authority (ESMA) and the Financial Reporting
Council (FRC), additional information on the APMs used by the Group
is provided below.
The following APMs are used by the Group:
-- Adjusted operating profit
-- Adjusted operating margin
-- Adjusted profit before tax
-- Adjusted tax
-- Adjusted profit after tax
-- Adjusted Earnings per Share
-- Adjusted diluted earnings per share
-- Adjusted cash conversion
-- Net debt
-- Average net debt
Further explanation of what each APM comprises and
reconciliations between Statutory reported measures and adjusted
measures are shown in note 5.
The Board believes that presentation of the Group results in
this way is relevant to an understanding of the Group's financial
performance, as adjustment items are identified by virtue of their
size, nature and/or incidence. This presentation is consistent with
the way that financial performance is measured by management,
reported to the Board, the basis of financial measures for senior
management's compensation schemes and assists in providing
supplementary information that assists the user to understand
better the financial performance, position and trends of the Group.
In determining whether an event or transaction is an adjustment,
the Board considers both quantitative and qualitative factors such
as the frequency or predictability of occurrence.
The APMs used by the Group are not defined terms under IFRS and
may therefore not be comparable with similarly titled measures
reported by other companies. They are not intended to be a
substitute for, or superior to, GAAP measures. All APMs relate to
the current year results and comparative periods where
provided.
Going concern
The condensed financial statements have been prepared on a going
concern basis which the directors consider to be appropriate for
the following reasons.
The directors have prepared cash flow forecasts for the period
to the end of November 2023 which indicate that, taking account of
reasonably plausible downsides as discussed below, the company will
have sufficient funds to meet its liabilities as they fall due for
at least 12 months from the date of this report.
In assessing the going concern position the Directors have
considered the balance sheet position as included on page 11 and
the level of available finance not drawn down. RM Group plc has a
bank facility ("the facility") which totalled GBP70m at the date of
this report. The facility was extended in the period and is
committed until July 2024.The terms of the facility remain
consistent with those of the prior facility agreement, see Note 31
of the Annual Financial Statements for further details.
At 31 May 2022, the Group had net debt of GBP41.5m (November
2021: GBP18.3m) including drawn facilities of GBP44m (November
2021: GBP20m). Liquidity headroom compared to available facilities
at 31 May 2022 was GBP24.1m. Average net debt over the period to 31
May 2022 was GBP37.2m (year to November 2021: GBP15.8m) with a
maximum borrowings position of GBP48.7m (year to November 2021:
GBP29.7m). The drawn facilities are expected to fluctuate over the
period considered for going concern and are not anticipated to be
fully repaid in this period.
The debt facilities at 31 May 2022 were subject to financial
covenants of a maximum of 2.5 times. Net Debt/adjusted EBITDA and
at least 4 times interest cover/adjusted EBITDA. These covenants
are tested annually in May and November. On 31 May 2022 the results
of the covenant tests were 2.61 and 13.73 respectively.
Subsequent to 31 May 2022 the lenders have agreed to amend the
net debt/ adjusted EBITDA covenant to 3.0x at May 2022 and November
2022. Whilst the lenders have made clear they currently have no
intention of accelerating all or any part of the loan repayments
and have reiterated their continued support to the company as this
was outside of the control of the directors at 31 May 2022, the
borrowings have been reclassified at the balance sheet date to
current liabilities.
The financial summary outlines the performance of the Group in
the six months to 31 May 2022.
For going concern purposes, the Group has assessed a base case
that assumes a broadly similar macroeconomic environment to that
currently being experienced.
It is anticipated that delayed shipments in RM Resources from H1
are materially delivered in H2. Freight costs are expected to
reduce in H2, partially due to the seasonality of shipments and
partially reflecting lower freight costs being experienced in the
wider market. Inflationary pressures on direct costs (and their
associated labour costs) are assumed to be passed through to the
customers in line with contractual terms or through price increases
that are not contractual. Inflationary pressures on overheads have
been absorbed in the forecast.
The base case does not assume a continuation of the recent
positive revenue momentum across the three Divisions but does
assume some operational execution improvements. The base case also
assumes muted growth in RM Technology as it progresses through an
operational turnaround.
The incremental costs associated with the IT implementation
programme are reflected in the base case and are forecast to be
similar in H2 to costs incurred in H1. As a result of the learnings
in the period and our increased confidence migrating TTS onto a
stable IT platform, no further costs or working capital delays are
forecast in the base case in relation to the disruption in the
Resources business case arising from the IT platform.
The base case also includes recovery of a claim for custom
duties previously overpaid and resumption of dividends payments is
also anticipated for the 2022 final dividend. Under that base case
we continue to maintain headroom against our committed facility and
are within our covenants.
The Group has assessed a downside scenario that adjusts base
assumptions to include:
-- Reduction of 5% in Resources sales volumes in the 12 months
to May 2023 reflecting the unlikely scenariothat customer backlogs
are not fulfilled;
-- Reduction by 50% of new business Technology revenues
reflecting uncertainties associated with newcontract revenues and
lower retention revenues;
-- A transition impact, capturing further operational
disruptions in releasing orders from the warehouseassociated with
the migration of the TTS brand to the new IT platform and warehouse
facilities, at 50% of theimpact on profits and cashflows
experienced in H1 by Consortium;
-- Elevated service delivery costs, including increased energy
costs, a return to higher freight costs inFY23 and failure to
deliver the operational execution improvements planned in H2;
and
-- 50% of the customs duty claim for over payments not being
recoverable.
In aggregate, whilst there would continue to be liquidity
headroom, the effect of these downside scenarios would lead to a
net debt/ EBITDA ratio at 31 May of 3.08 returning to 1.82 at 30
November 2023.
The Board has considered a number of mitigations of which it
could be reasonably confident in its ability to deliver if
required. These include:
-- reduced discretionary, and investment spend, and headcount
management;
-- improving the timing of forward inventory purchases which
improve working capital;
-- a change to the IT implementation roadmap which extends the
deployment timeline and reduces theinvestment spend in 2023;
and
-- the deferral of the final 2022 dividend.
Furthermore, although the base case has not included recent
positive revenue momentum continuing into 2023 of which it cannot
be certain, there are reasonably probable contractual improvements
with existing customers that are not reflected in the base scenario
but experience supports their addition.
The Directors do not believe that all these assumptions
occurring together is plausible, but under these scenarios, taking
into consideration the above mitigants, we continue to have
reasonable headroom against the facility and comply with bank
covenants. Having considered the severity of this scenario, the
Board considers this to be an appropriate worst-case scenario.
The Board's assessment of the likelihood of a further downside
scenario is remote, particularly with the continued progress in
resolving the IT Implementation transition challenges, and recent
experience in some of our market sectors.
Therefore, the Board has a reasonable expectation that the
Company has adequate resources to continue in operational existence
for a period of not less than 12 months from the date of this
report, having considered both the availability of financial
facilities and the forecast liquidity and expected future covenant
compliance. For this reason, the Company continues to adopt the
going concern basis of accounting in preparing the financial
statements.
3. Operating segments
The Group's business is supplying products, services and
solutions to the UK and international education markets.
Information reported to the Group's Chief Executive for the
purposes of resource allocation and assessment of segmental
performance is focussed on the nature of each type of activity.
The Group is structured into three operating divisions: RM
Resources, RM Assessment and RM Technology. Typically two of the
divisions are impacted by seasonality trends. RM Resources
experiences increased revenues in March, June, July and October in
line with customer financial and academic years. In RM Assessment
scanning revenues are recognised over the period of the scanning
activity and create seasonality depending the timing of exam
sessions and the number and type of examinations being sat. UK
government assessment scanning revenues are spread typically
between May to July.
Corporate Services consists of central business costs associated
with being a listed company, share based payment charges and
non-division specific pension costs.
This segmental analysis shows the results and assets of these
divisions. Revenue is that earned by the Group from third parties.
Net financing costs and tax are not allocated to segments as the
funding, cash and tax management of the Group are activities
carried out by the central treasury and tax functions.
Segmental results
6 months ended 31 May 2022 RM Resources* RM Assessment RM Technology Corporate Services Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
UK 42,923 11,376 28,943 - 83,242
Europe 5,513 4,029 13 - 9,555
North America 1,265 68 1,335 - 2,668
Asia 411 344 - - 755
Middle East 553 78 - - 631
Rest of the world 977 2,354 138 - 3,469
51,642 18,249 30,429 - 100,320
Adjusted operating profit /(loss) 1,239 2,762 2,527 (1,526) 5,002
Other income 315
Finance costs (1,086)
Adjusted profit before tax 4,231
Adjustments (see note 5) (11,464)
Profit before tax (7,233)
6 months ended 31 May 2021 RM Resources* RM Assessment RM Technology Corporate Services Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
UK 42,017 9,319 32,229 - 83,565
Europe 3,456 3,308 39 - 6,803
North America 806 38 49 - 893
Asia 336 594 - - 930
Middle East 448 54 - - 502
Rest of the world 1,141 2,219 6 - 3,366
48,204 15,532 32,323 - 96,059
Adjusted profit/(loss) from operations** 2,857 3,275 4,574 (2,094) 8,612
Adjusted other income -
Adjusted finance costs (621)
Adjusted profit before tax** 7,991
Adjustments** (see note 5) (5,042)
Profit before tax** 2,949
Year ended 30 November 2021 RM Resources* RM Assessment RM Technology Corporate Services Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
UK 98,448 18,846 64,265 - 181,559
Europe 8,849 6,104 91 - 15,044
North America 1,882 - 138 - 2,020
Asia 772 1,036 - - 1,808
Middle East 2,004 159 - - 2,163
Rest of the world 2,469 5,724 66 - 8,259
114,424 31,869 64,560 - 210,853
Adjusted profit/(loss) from operations 10,073 5,706 7,098 (4,408) 18,469
Investment income 28
Adjusted finance costs (1,396)
Adjusted profit before tax 17,101
Adjustments (see note 5) (11,483)
Profit before tax 5,618
* Included in UK are international sales via UK distributors
** Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2
Segmental assets
Other non-segmental assets include tax assets, cash and
short-term deposits and other non division specific assets.
Segmental assets
RM Resources RM Assessment RM Technology Corporate Services Total
At 31 May 2022 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental 134,268 24,782 16,631 3,067 178,748
Other 50,223
Total assets 228,971
RM Resources RM Assessment RM Technology Corporate Services Total
At 31 May 2021** GBP000 GBP000 GBP000 GBP000 GBP000
Segmental 119,442 23,077 13,098 2,464 158,081
Other 19,098
Total assets 177,179
RM Resources RM Assessment RM Technology Corporate Services Total
At 30 November GBP000 GBP000 GBP000 GBP000 GBP000
2021
Segmental 125,670 24,153 15,960 2,517 168,300
Other 42,525
Total assets 210,825
** Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2
4. Revenue
RM Resources RM Technology RM Technology RM Assessment
Transactional Transactional Over time Over time Total
Period ended 31 May GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2022
Supply of products 51,634 5,765 57,399
- -
Rendering services 8 16,606 16,307 32,921
-
Licences 1,304 6,754 1,942 10,000
-
51,642 7,069 23,360 18,249 100,320
Total
Period ended 31 May GBP'000
2021
Supply of products 48,143 7,771 55,914
- -
Rendering services 62 17,030 13,622 30,714
-
Licences 425 7,097 1,910 9,432
-
48,205 8,196 24,127 15,532 96,059
5. Adjustments to profit before tax
6 months ended 6 months ended Year ended
31 May 2022 31 May 2021** 30 November 2021
GBP000 GBP000 GBP000
Adjustments to operating expenses:
Amortisation of acquisition related intangible assets 1,004 1,012 2,010
Dual running cost related to investment strategy 2,758 562 2,064
Configuration of SaaS licences (ERP) 7,666 3,418 8,337
Gain on sale of held for Sale properties - - (1,399)
Onerous Lease - - 471
Restructuring costs 36 50 -
Total adjustments to operating expenses 11,464 5,042 11,483
Tax effect of adjustments (2,186) (752) (1,858)
Post tax adjustment 9,278 4,290 9,625
** Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2.
In the 6 months ended 31 May 2022 notable adjustments to profit
include:
The amortisation of acquisition related intangible assets is an
annual recurring adjustment to profit that is a non-cash charge
arising from investing activity. This adjustment is to communicate
with the investment analyst community in common with peer companies
across the technology sector. The income generated from the use of
these intangible assets is, however, included in the adjusted
profit measures.
Other adjusted items:
These are items which are identified by virtue of either their
size or their nature to be important to understanding the
performance of the business including the comparability of the
results year on year. These items can include, but are not
restricted to, impairment; gain on held for sale assets and related
transaction costs; changes in the provision for exceptional
property costs; the gain/loss on sale of operations and
restructuring and acquisition costs.
In 2018, following a large acquisition in the Resources
division, the Group announced a new warehouse strategy which
involved the disposal of 5 warehouses (including 3 warehouses from
the newly acquired group of companies) and transfer into one new
automated warehouse. Interlinked with the automation software is a
requirement to change the ERP solution which is being rolled out
across the whole Group. The Group believes that whilst these
programmes span a number of years, their size, complexity and
number of unusual costs and income are material to the
understanding of the trading performance of the business including
the comparability of results year on year. As a result, all
significant costs or income relating to these programmes have been
treated as an adjustment to profit, consistently period to
period.
Dual run related costs during the period (GBP2.8m), relate to
costs associated with the new warehouse that is not yet fully
operational but was acquired at the end of November 2020. Costs of
GBP1.8m include items such as utilities, security and increased
warehouse staff to test the new facility and to transfer inventory.
Other dual run costs include IT costs associated with the
replacement of our ERP solution (excluding configuration costs of
SaaS licenses) being expensed that relate to running of IT systems
not yet in use (GBP1.0m).
The restructuring costs relate to the last tranche of warehouse
consolidation which was announced in 2018 and reflect the
adjustment to the redundancy liability as at 31 May 2022. This is
expected to be paid in H2 2022 as we complete the warehouse
consolidation.
In addition to the warehouse programme, the ERP replacement
programme "Evolution" comprises the configuration and customisation
costs of a lot of inter-related systems. These costs represent a
significant investment and amount to GBP7.7m in the period. The
Group believes these items to be significantly large enough and
unusual enough to impact the understanding of the performance of
the Group if not adjusted.
Net debt is the total of borrowings (GBP43.8m (May 2021:
GBP11.8m)), cash at bank (GBP4.3m (May 2021: GBP4.3m)) and
overdraft (GBP1.9m (May 2021: GBP3.0m)) which was GBP41.5m as at 31
May 2022 (2021: GBP10.5m). Lease liabilities of GBP20.2m (May 2021:
GBP20.5m) are excluded from this measure as they are not included
in the measurement of net debt for the purpose of covenant
calculations.
Average net debt is calculated by taking the net debt on a daily
basis and dividing by number of days.
The above adjustments that arise during the year have the
following impact on the cash flow statement:
31 May 2022 31 May 2021
Adjusted cash Adjustments Statutory Adjusted cash Adjustments Statutory
flows flows
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit before tax 4,231 (11,464) (7,233) 7,991 (5,042) 2,949
Profit from operations 5,002 (11,464) (6,462) 8,612 (5,042) 3,570
Net cash inflow from operating activities (6,545) (9,208) (15,753) 6,274 (3,712) 2,562
Net cash used in investing activities 33 (2,493) (2,460) (639) (6,224) (6,863)
Net cash used in financing activities 18,986 - 18,986 2,262 - 2,262
Net increase/ (decrease) in cash & cash 12,475 (11,702) 773 7,897 (9,936) (2,039)
equivalents
Adjusted cash conversion percentage is defined as adjusted cash
inflow from operating activities as a percentage of adjusted profit
before tax.
The adjustments have the following impact on key metrics:
2022 2022 2022 2021 2021 2021
Adjusted measure Adjustment Statutory measure Adjusted measure Adjustment Statutory measure
Gross profit (GBP000) 34,160 - 34,160 32,937 - 32,937
Profit from operations 5,002 (11,464) (6,462) 8,612 (5,042) 3,570
(GBP000)
Operating margin (%) 5.0% 0.0% (6.4%) 9.0% 0.0% 3.7%
Profit before tax (GBP000) 4,231 (11,464) (7,233) 7,991 (5,042) 2,949
Tax (GBP000) (847) 2,186 1,339 (1,746) 752 (994)
Profit after tax (GBP000) 3,384 (9,278) (5,894) 6,245 (4,290) 1,955
Earnings per share
Basic (Pence) 4.1 - (7.1) 7.5 - 2.4
Diluted (Pence) 4.0 - (7.1) 7.5 - 2.3
Adjusted operating profit is defined as the profit before
operations excluding the adjustments referred to above. Adjusted
operating profit margin is defined as the adjusted operating profit
as a percentage of revenue. The impact of tax is set out in Note
6.
6. Tax
6 months ended 31 May 2022 6 months ended 31 May 2021 (restated Year ended 30 November 2021
*)
Adjusted Adjustments Total Adjusted Adjustments Total Adjusted Adjustments Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Profit before tax 4,231 (11,464) (7,233) 7,991 (5,042) 2,949 17,101 (11,483) 5,618
Tax charge (847) 2,186 1,339 (1,746) 752 (994) (3,282) 1,858 (1,424)
Effective tax rate 20.0% (19.1%) 18.5% 21.8% (14.9%) 33.7% 19.2% (16.2%) 25.3%
(ETR)
* Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2.
For the interim periods, the ETR is calculated by applying a
forecast full year ETR to the interim results.
The standard rate of corporation tax in the UK for the period is
19%. An increase in the UK corporation tax rate from 19% to 25%
from April 2023 was substantially enacted in May 2021. The deferred
tax position reflects this change in legislation.
7. Earnings per ordinary share
6 months ended 31 May 2022 6 months ended 31 May 2021 Year ended 30 November 2021
(restated *)
Profit Weighted Profit Weighted Profit Weighted
after average Pence per after average Pence per after average Pence per
tax number of share tax number of share tax number of share
shares shares shares
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Basic earnings per
ordinary share:
Basic earnings (5,894) 83,048 1,955 83,048 2.4 4,194 83,150
(7.1) 5.0
Adjustments (see note 5) 9,278 - 11.2 4,290 - 9,625 - 11.6
5.1
Adjusted basic earnings 3,384 83,048 4.1 6,245 83,048 7.5 13,819 83,150 16.6
Diluted earnings per
ordinary share:
Basic earnings (5,894) 83,048 (7.1) 1,955 83,048 4,194 83,150
2.4 5.0
Effect of dilutive
potential ordinary - 1,449 - - 757 (0.1) - 1,302 (0.0)
shares: share-based
payment awards
Diluted earnings per (5,894) 84,497 1,955 83,805 2.3 4,194 84,452
ordinary share (7.1) 5.0
Adjustments (see note 5) 9,278 - 4,290 - 9,625 -
11.1 5.1 11.4
Adjusted diluted earnings 3,384 84,497 6,245 83,805 13,819 84,452
4.0 7.5 16.4
* Amounts at 31 May 2021 have been restated consistently with
the adjustments made at 30 November 2021, refer to note 2.
8. Dividends
Amounts recognised as distributions to equity holders were:
6 months 6 months Year ended
ended ended
31 May 2022 31 May 2021 30 November
2021
GBP000 GBP000 GBP000
Final dividend for the year ended 30 November 2021 - 3.0 p per share (2020: 2,498 2,498 2,497
3.0 p)
Interim dividend for the year ended 30 November 2021 - 1.7 p per share - - 1,416
(2020: nil p)
2,498 2,498 3,913
9. Trade and other receivables
31 May 2022 31 May 2021 30 November 2021
GBP000 GBP000 GBP000
Current
Financial assets
Trade receivables 20,048 18,527 21,792
Other receivables 2,130 1,372 1,629
Derivative financial instruments 255 - 164
Accrued income 6,186 2,902 2,667
28,619 22,801 26,252
Non-financial assets
Prepayments 9,884 6,098 7,613
38,503 28,899 33,865
Non-current
Financial assets
Other receivables 83 63 82
83 63 82
38,586 28,962 33,947
The Group uses the practical expedient of measuring impairment
using a provision matrix which is consistent with applying a full
credit loss model for the Group. This has been consistently applied
with no significant impact on the net trade receivables
balance.
10. Contract fulfilment assets
31 May 2022 31 May 2021 30 November 2021
GBP000 GBP000 GBP000
Current 2,155 1,771 1,360
Non-current 4,677 2,729 4,169
6,832 4,500 5,529
Contract fulfilment assets represent investment in contracts
which are recoverable and are expected to provide benefits over the
life of the contract. These costs, which relate to contract set up
costs, are capitalised only when they relate directly to a contract
and are incremental to securing the contract.
11. Trade and other payables
31 May 2022 31 May 2021 30 November 2021
GBP000 GBP000 GBP000
Current
Financial liabilities
Trade payables 24,163 20,029 21,277
Other taxation and social security 3,111 3,852 4,603
Other payables 2,881 2,944 2,893
Derivative financial instruments - 117 -
Accruals 13,603 12,922 15,443
43,758 39,864 44,216
Non-financial liabilities
Deferred income 14,498 15,356 14,027
58,256 55,220 58,243
Non-current
Non-financial liabilities
Deferred income:
- due after one year but within two years 1,554 1,628 1,496
- due after two years but within five years 1,137 1,504 1,138
- After 5 years 1,134 484 635
3,825 3,616 3,269
62,081 58,836 61,512
12. Borrowings
31 May 2022 31 May 2021 30 November 2021
GBP000 GBP000 GBP000
Bank loan (44,000) (12,000) (20,000)
Capitalised fees 176 155 256
(43,824) (11,845) (19,744)
During the period the Group has drawn down GBP24.0 million of
the facility. For details of the facility please see note 31 in the
annual report and financial statements for the year ended 30
November 2021. On 31 May 2022, the Group extended the facility to 5
July 2024.
As described in the comments on net debt, the borrowings as at
31 May 2022, have been classified as a current liability, whereas
as at 31 May 2021 and 30 November 2021 are classified as a non
current liability.
13. Provisions
Employee-related restructuring Contract risk provisions Total
Dilapidations
GBP000 GBP000 GBP000 GBP000
At 1 December 2021 1,450 916 1,175 3,541
Utilisation of provisions (280) (56) - (336)
Release of provisions (90) - - (90)
Increase in provisions 219 36 - 255
Unwind of discount (11) - - (11)
At 31 May 2022 1,288 896 1,175 3,359
GBP1.0m of the contract risk provision relates to contractual
TUPE provisions as disclosed in Note 26 of the annual report and
financial statements for the year ended 30 November 2022. The
timing of the provisions is dependent on the timing of the last
employee in each of the 17 schemes leaving the Group.
14. Defined Benefit Pension Scheme
The Group has both defined benefit and defined contribution
pension schemes. There are three defined benefit pension schemes,
the Research Machines plc 1988 Pension Scheme (the "RM Scheme")
and, following the acquisition of RM Educational Resources Limited
("The Consortium", acquired by the Company on 30 June 2017), the
CARE Scheme and the Platinum Scheme. The RM Scheme and the CARE
Scheme are both operated for employees and former employees of the
Group only. The Platinum Scheme is a multi-employer scheme, with RM
Educational Resources Limited being just one of a number of
employers. The Group plays no active part in managing that Scheme,
and since 30 November 2020 the Group has no employees in this
Scheme.
For all three Schemes, based on the advice of a qualified
independent actuary at each balance sheet date and using the
projected unit method, the administrative expenses and current
service costs are charged to operating profit, with the interest
cost, net of interest on scheme assets, reported as a financing
item.
Defined benefit pension scheme remeasurements are recognised as
a component of other comprehensive income such that the balance
sheet reflects the scheme's surplus or deficit as at the balance
sheet date. Contributions to defined contribution plans are charged
to operating profit as they become payable.
Scheme assets are measured at bid-price, where available, at 31
May 2022. The present value of the defined benefit obligation was
measured using the projected unit method.
Under the guidance of IFRIC 14, the Group is able to recognise a
pension surplus on the balance sheet for all three schemes. At 31
May 2022, the Platinum and RM scheme show a surplus and the CARE
scheme is in deficit.
The Research Machines plc 1988 Pension Scheme (RM Scheme)
The Scheme provides benefits to qualifying employees and former
employees of RM Education Limited, but was closed to new members
with effect from 1 January 2003 and closed to future accrual of
benefits from 31 October 2012. The assets of the Scheme are held
separately from RM Education Limited's assets in a
trustee-administered fund. The Trustee is a limited company.
Directors of the Trustee company are appointed by RM Education Ltd
and by members. The Scheme is a funded scheme.
The most recent actuarial valuation of Scheme assets and the
present value of the defined benefit obligation was carried out for
statutory funding purposes at 31 May 2021 by a qualified
independent actuary. IAS 19 Employee Benefits (revised) liabilities
at 31 May 2021 have been rolled forward based on this valuation's
base data.
As at 31 May 2021, the triennial valuation for statutory funding
purposes showed a deficit of GBP15.4m (31 May 2018: GBP40.6m). The
Group agreed with the Scheme Trustees that it will repay this
amount via deficit catch-up payments of GBP3.2m per annum until 31
December 2024. At 31 May 2021 there were amounts outstanding of
GBP0.3m (2021: GBP0.3m) for one month's deficit payment (2021: 1
months) and GBPnil (2021: GBPnil) for Scheme expenses.
The parent company RM plc has entered into a pension protection
fund compliant guarantee in respect of scheme liabilities. No
liability has been recognised for this within the Company as the
Directors consider that the likelihood of it being called upon is
remote.
The Consortium CARE Scheme
Until 31 December 2005, RM Educational Resources Limited
operated the CARE Scheme providing benefits on both a defined
benefit (final salary-linked) and a defined contribution basis.
From 1 January 2006, the defined benefit (final salary-linked) and
defined contribution sections were closed and all employees,
subject to the eligibility conditions set out in the Trust Deed and
Rules, joined a new defined benefit (Career Average Revalued
Earnings) section. As at 28 February 2011 the Scheme was closed to
future accruals.
The Scheme is subject to the Statutory Funding Objective under
the Pensions Act 2004. A valuation of the Scheme is carried out at
least once every three years to determine whether the Statutory
Funding Objective is met. As part of the process, RM Educational
Resources Limited must agree with the trustees of the Scheme the
contributions to be paid to address any shortfall against the
Statutory Funding Objective. The Statutory Funding Objective does
not currently impact on the recognition of the Scheme in these
accounts. The Scheme is managed by a Board of Trustees appointed in
part by the Company and in part from elections by members of the
Scheme. The Trustees have responsibility for obtaining valuations
of the fund, administering benefit payments and investing Scheme
assets. The Trustees delegate some of these functions to their
professional advisers where appropriate. The valuation of the
Scheme at 31 May 2021 was a deficit of GBP6.2m (31 December 2019
deficit GBP5.9m). The Group agreed with the Scheme Trustees that it
will repay this amount via deficit catch-up payments of GBP1.2m per
annum until 31 December 2026.
Prudential Platinum Pension
The Consortium acquired West Mercia Supplies in April 2012
(prior to the Company acquiring The Consortium). Upon acquisition
of West Mercia Supplies by The Consortium, a pension scheme was set
up providing benefits on both a defined benefit (final
salary-linked) and a defined contribution basis for West Mercia
employees. The most recent full actuarial valuation was carried out
by the independent actuaries Xafinity on 31 December 2018. Using
the assumptions below the results of the full valuation were
adjusted and rolled forward to form the basis for the current year
valuation. The Scheme is administered within a legally separate
trust from RM Educational Resources Limited and the Trustees are
responsible for ensuring that the correct benefits are paid, that
the Scheme is appropriately funded and that the Scheme assets are
appropriately invested. The valuation of the Scheme at 31 December
2018 was a surplus of GBP213,000 (31 December 2015: deficit of
GBP70,000).
The pension schemes have all seen improvements to their balance
sheet position in the period as shown in the table below
31-May-22 30-Nov-21 31-May-22 30-Nov-21 31-May-22 30-Nov-21
GBP'000 GBP'000 Discount rate RPI %
RM Scheme 38,896 34,544 3.60% 1.75% 3.15% 3.15%
CARE scheme (1,068) (4,686) 3.60% 1.75% 3.25% 3.30%
Platinum scheme 823 493 3.60% 1.75% 3.10% 3.15%
Surplus/(deficit) 38,651 30,351
31-May-22
GBP'000
Opening surplus 30,351
Gain from changes to financial assumptions on liabilities 98,663
Employer contributions 2,310
Return on assets (90,268)
Interest 275
Experience (losses)/gains on liabilities (2,692)
Other items 12
Closing surplus 38,651
The key areas of sensitivity in respect to the pension surplus /
deficit are the discount rate and RPI.
The discount rates improved by 1.85 percentage points whilst RPI
rates were substantially unchanged on the opening position.
However, the improvement in the pension surplus of GBP98.8m due to
the discount rate impact on liabilities, is offset by lower than
expected invested returns of GBP(90.3)m.
The overall pension surplus increased by GBP8.3m in the
period.
15. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation.
The Group encourages its Directors and employees to be
Governors, Trustees or equivalent of educational establishments.
The Group trades with these establishments in the normal course of
its business.
The only significant related party transactions in the period
relate to scanning services amounting to GBP0.6m provided by
Restore plc group, which is a supplier to RM of scanning and
associated services. Charles Bligh, a Non-Executive Director of RM
plc, is the CEO of Restore plc, but is not involved in the
commercial discussions relating to this supply as set out in the
Annual Report and Accounts.
16. Post balance sheet event
There are no post balance sheet events.
By order of the Board,
Neil Martin
Chief Executive Officer
22 August 2022
INDEPENT REVIEW REPORT TO RM PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2022 which comprises the Condensed
Consolidated Income Statement, the Condensed Consolidated Statement
of Comprehensive Income, the Condensed Consolidated Balance Sheet,
the Condensed Consolidated Statement of Changes in Equity, the
Condensed Consolidated Cash Flow Statement and related notes 1 to
16.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31 May
2022 is not prepared, in all material respects, in accordance with
United Kingdom adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council for use in the
United Kingdom. A review of interim financial information consists
of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial statements of the
group will be prepared in accordance with United Kingdom adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with this ISRE (UK), however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are
responsible for expressing to the group a conclusion on the
condensed set of financial statement in the half-yearly financial
report. Our conclusion, including our Conclusions Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council. Our work
has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review
report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the
conclusions we have formed.
Deloitte LLP, Statutory Auditor
Birmingham, United Kingdom
22 August 2022
-----------------------------------------------------------------------------------------------------------------------
ISIN: GB00BJT0FF39
Category Code: IR
TIDM: RM.
LEI Code: 2138005RKUCIEKLXWM61
OAM Categories: 2.2. Inside information
3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.: 183020
EQS News ID: 1425687
End of Announcement EQS News Service
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