RM hikes dividend as profits grow

8th Jul 2013 07:20

Educational software supplier RM reported improved half year pre-tax profit and lifted its dividend payment but cautioned that the UK education sector is, and will remain, under financial constraint and revenue is expected to decline.Adjusted pre-tax profit rose to £4.9m for the 6 months ended May 31st 2013 from £3.4m previously. Adjusted operating profit excluding exited businesses increased 16% to £5.2m. Revenue fell to £118.8m during the period from £122.0m a year earlier. Revenue excluding exited businesses fell by 2.6% to £118.8m. Adjusted EPS rose to 4.1p from 2.9p in 2012. Chairman John Poulter commented: "RM continues to trade profitably and has a strong balance sheet. However, the UK education sector is, and will remain, under financial constraint and revenue is expected to decline."Education Technology, RM's largest division is likely to see good second-half trading amid new school openings under the Building Schools for the Future programme. However the programme itself is expected to see a reduction in annual revenue of around £40m between 2013 and 2015. Otherwise RM said considerable effort is being directed to improve the profitability of the ET business by both commercial and efficiency improvements. The Board expects to be in a position to provide greater insight by the end of the year, it said. The other two segments, Education Resources and Assessment and Data Services continue to develop and trade successfully."The full year is expected to benefit from a positive bias to the second half, although not to the extent experienced last year," it said.The interim dividend per share increased by 12% to 0.84p.Net cash increased to £51.8m from £25.3m at May 31st.CJ