Monday, 9 February 2009

RM sees education spending hold up

(By Anthony Miller). Leading UK-based educational supplier RM reiterated its observations late last year that spending is still holding up in the education sector. Today’s first-half trading update (to 6th Feb., see here) made the point that schools do most of their buying in the company’s H2 and that Q1 tends to see lowest order intake and revenues. Nonetheless, things appear ‘so far, so good’. Indeed, we expect UK public sector software and IT services spending to hold up much better than in the private sector, especially in education. RM has prime position in the BSF (Building Schools for the Future) programme, though this is an investment that has a five year pay-back on each bid. Indeed, as we commented at the time (see RM seeks BSF profit in FY10), RM expects another year of net investment before its BSF activities turn a profit. Also late last year (Nov. '08) RM acquired US education software player, Computrac for $8m, its 15th acquisition since 2000 though its first in the US. Computrac had been an RM reseller for two years. The company reports that integration is on track.

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