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December 1, 1995

RM, HAPPY NOT TO HAVE BEEN ACQUIRED, CLIMBS 27% AT ú3.4m FOR FIRST FULL YEAR

By CBR Staff Writer

It was a story of strong growth across all sectors in RM Plc’s first year on the London Stock Exchange. The Abingdon, Oxfordshire company that streamlined its name from Research Machines to the inconspicuous RM when it came to market (CI No 2,563), used to have a 95% second half bias, but this appears to have changed, with turnover at the half-way stage standing at ú33.6m (CI No 2,666). The education markets still represent 90% of sales, and education sales were up 22% in a year in which the UK government is reluctant to dip into its coffers for spending on education, according to the company. Primary school revenues were up 38%, and more than 80 local education authorities have now been signed up to the RM Window Box partnership scheme, which sells a range of integrated systems with multimedia options, and accounts for most primary school revenues. For the older children at secondary schools, RM has launched a range of RM Multimedia Servers, with more than 150 sold, as well as introducing its open networking strategy, with the company adding educational features to popular operating systems. Secondary school revenues were up 12%. In the further and higher education sectors, sales were up 36%. RM added two divisions in the year, Learning Systems and the May acquisition of Key Solutions Ltd (CI No 2,648). The former distributes Success Maker integrated learning system in the UK, which is aimed at improving basic literacy and numeracy, something that most commentators in the UK believe has fallen dramatically in recent years. It is in use at around 45 local authorities. Key Solutions sells administration and management software for the education market. In March the company launched Internet for Learning, which now provides Internet access to more than 1,000 schools. Some ú430,000 was invested in the year, resulting in a ú300,000 loss from ú130,000 revenues. Cash balances were ú10.2m, up from ú6.0m last time, after the ú1.1m paid for Key Solutions. The company is not sure whether the lack of second half bias was just a blip, and plans to maintain a conservative balanace sheet. A cut in the length of warranty from three years to one and increased personal computer sales resulted in slightly reduced gross margins, to 24.7%. The final dividend of 4.5 pence, added to the 1.5 pence at half-time, makes for 6.0 pence, a rise on 25%.

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