Stocks in education firm RM plc slide as revenues stagnate
Stocks in education software company RM plc are down more than three per cent in morning trading, after the company predicted revenue would stagnant for the year.
RM’s predicts revenue for the 12 months to November rose by just £3m to £224, with profit before tax to tick up by £300m to £26.3m.
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RM’s earnings per share (EPS) for the period are expected to fall from 25.8p to 25.5p.
The statement sparked a morning trade-off, with shares falling by more than three per cent to 267.70p
Senior market analyst from asktraders.com Steve Miley said: “Whilst the firm saw growth in the technology divisions of the business, the fact that there are no signs of the resource business picking up is concerning investors.
“Revenue from RM Resources has been a source of disappointment amid a challenging UK schools’ market.
“The stock was was up over 28 per cent across the year to date, however today’s slump in the share price has dragged it back to levels last seen at the end of September.”
The company specialises creating systems for e-marking, e-testing and the management and analysis of educational data.
Its acquisition of Australian IT and software company SoNET Systems this year, for £7.3m, effectively extended its stock of digital products.
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The purchase also resulted in net debt rising by more than double to £15m.
RM chief executive David Brooks said: “Whilst trading has remained challenging in our resources business in 2019, we have seen growth in our two technology divisions benefitting from encouraging early progress following our acquisition of SoNET.”