RM, the educational services group, has lost 13% after it swung into a loss after the coalition government cut spending on schools as part of its austerity drive.
The company, which supplies computer systems and teaching equipment, lost £23.4m in the 14 months to the end of November, compared to a £23.9m profit in the previous 12 months, after redundancy costs and provisions. It has gone through a radical restructuring to cope with the downturn, including selling overseas businesses in the US and Australia, and its Lego joint venture.
Newly appointed executive chairman Martyn Ratcliffe was scathing in his criticism of the group:
In recent years, while recognising that the market was changing, the severity of the changes was not fully appreciated by the business. This situation was compounded by an unsuccessful international expansion programme and a lack of innovation in recent years.
But he added that the underlying businesses remained profitable and the recent strategic moves had stabilised the group. However its shares have fallen 10.75p to 70p on the news, and George O'Connor at Panmure Gordon said:
[The] final results carry a health warning and the numbers coupled with the narrative makes it difficult to come up with any kind of positive investment argument. The operational restructuring of the group is "almost" complete (so more restructuring in the offing) . . . the difficult market conditions will continue for the foreseeable future (so more poor trading results in the offing).
