Ailing specialist education IT supplier RM has admitted it reacted too slowly to government budget cuts in schools after revealing massive losses in fiscal 2011 ended 30 November.
The firm posted a loss before tax of £23.4m for the 14 months to nOVEMBER 2011 – including restructuring costs and excess property provisions. This compared to a £23.9m profit in the previous year. Operating profit fell to £10m from £23.9m and sales dropped 7.7 per cent to £350.8m.
The Learning Technologies division - RM-branded and third-party classroom kit - made an adjusted operating profit of £5.4m, down 48 per cent on a year ago, and an 11 per cent drop in sales to £243m.
Education Resources filed an adjusted operating profit of £300,000, down from £9.2m in fiscal 2010, while sales were flat at £83.9m.
The Assessment and Data business unit saw adjusted operating profits nearly halve to £1.6m as sales climbed £1m over the period to £23.9m.
Exec chairman Martyn Ratcliffe said in a statement that a "severe tightening of public sector budgets" was "not fully appreciated by the business".
"This situation was compounded by an unsuccessful international expansion programme and a lack of innovation in recent years, whereby few new growth opportunities in the core UK market were created to offset the foreseeable decline in BSF."
A review of operations came in the summer when cracks widened in RM's model; it subsequently disposed of the US and Oz hardware businesses in the autumn and more recently offloaded DACTA, Lego Education Europe and AMI.
RM has also opted for some blood-letting, and had warned up to 300 staff that they are at risk of redundancy, amid an organisational restructure that saw the supplier move into four biz units and move more software dev heads to India.
A bunch of long-serving senior figures have also left the business, including former Terry Sweeney.
Ratcliffe claimed the cost-cutting and remedial actions had "stabilised" the group. ®