RM has released a trading update following the completion of a review taking into account the first quarter’s trading, recent detailed market research and information gathered at BETT (the major educational ICT trade show which took place during January 2002). In the light of this review the company said it expects turnover to be approximately 15% lower than last year, with profits likely to be less than half of those last year.
The company now expects order intake to be significantly below plan and, as a result, turnover will be less than last year. This is due to a number of factors. These include schools spending more of their IT budget on broadband connectivity and less on RM’s software, a reduction in PC market share, and a move to lower-margin notebook PCs. Two of RM’s news software products are also expected to be delivered later than planned and the Group’s ability to ship significant volume of them in the current year will be limited. RM Community Connect 3 is a major strategic upgrade for our customers and will generate a large amount of additional business for RM’s other product ranges. The product is now expected to ship in May following delays in final testing.
In addition, the company is increasingly concerned about the impact the BBC’s Digital Curriculum proposals will have on the company’s market share.
In response to the changes in the Group’s markets, the Board has instituted a review of all aspects of the Group’s business. This review will be headed by new Chief Executive Tim Pearson and its conclusions – along with details of the Group’s strategic development – will be communicated at the time of the interim results announcement in May 2002.
