RM seeks BSF profit in FY10

(By Anthony Miller) RM, the UK’s leading education systems supplier, expects another year of net investment in the UK Building Schools for the Future programme before its BSF activities turn a profit. Releasing its FY08 results (see here), RM CEO Terry Sweeney reported winning half of the ten available BSF awards, of which it bid for eight. RM expects to sustain a similar bid rate this year. Making a bold statement we really hope doesn’t come back to bite him, Sweeney advised “RM customers are not directly affected by current economic conditions”, though later noted a decline in commodity hardware average selling prices and “another tough year” in the curriculum software market.

We have long been a supporter and admirer of RM and remain so. In the many years we have followed RM’s fortunes, the company has stuck to its knitting without getting stuck in the past. Indeed, RM jumped on the netbook bandwagon a year ago, launching a customised version of the Asus miniBook as part of its ‘PC for every pupil’ initiative. Yet despite the Government’s long-standing commitment to the education sector, RM has grown a modest 6% cagr since 2003 (including acquisitions), though lifted net margins from 2.2% to 3.9% over the five years. It’s a tough battle in the education market, but for the worthiest of causes.