RM posts profit rebound in H1 as Assessment growth offsets wider revenue decline
Assessment division drives platform and recurring revenue gains as RM maintains FY25 outlook and extends £70m facility to 2027.
RM plc has reported a return to profitability in its half-year trading update, with adjusted operating profit for the six months ending 31 May 2025 expected to fall between £0.7 million and £0.9 million. This marks a turnaround from the restated £0.3 million loss in the same period last year.
Adjusted EBITDA is forecast at £3.3–£3.5 million, up from £2.4 million in H1 2024. The improvement reflects continued cost control and margin improvement, with the company delivering over £20 million in annual savings to date.
However, revenue was moderately lower year-on-year at £73.0–£73.5 million, compared to £78.3 million in H1 2024. RM cited ongoing UK schools budget pressures, delayed government funding for edtech initiatives, and tariffs affecting its U.S.-based TTS business.
Assessment continues to lead performance
RM’s Assessment division remains the primary growth driver, with core platform revenue increasing 18 percent and total recurring revenue up 20 percent. The contracted orderbook grew from its year-end record of £95.7 million, supported by renewals and new contract wins. Further orders are expected in the second half.
The company confirmed that Assessment growth is expected to offset the revenue shortfall in its TTS and Technology divisions by year-end. While the performance of Assessment has helped RM stay on track to meet full-year expectations, it also underscores the company’s increasing reliance on a single business line to drive financial results.
Banking facility extended amid net debt increase
RM has agreed to extend its £70 million lending facility by one year to July 2027. The updated covenant tests now run to November 2026, with a 4.5:1 leverage ratio and a 4.0:1 interest cover ratio applying thereafter.
Net debt rose to £59.6 million at the end of the half year, up £7.9 million since year-end. This mirrors seasonal trends but also reflects continued investment in RM Ava, the company’s global accreditation platform for digital assessment. The platform is intended to support long-term profitability and growth but remains a near-term cost driver.
Defined benefit pension position moves to surplus
The company also reported a shift in its closed defined benefit pension schemes from a £21.6 million deficit in 2021 to a £10.5 million surplus, based on triennial valuations dated 31 May 2024. Only £1.8 million in contributions remain under the 2023 agreement with the Trustee. RM said it will work with the Trustee on potential derisking strategies over time.
Outlook remains unchanged
Despite softer revenue, RM said it remains on course to meet full-year market expectations for adjusted operating profit and EBITDA, driven by gains in margin performance and Assessment contract momentum.
“I am pleased to report that RM continues to be on a strong trajectory following our FY24 results, with profitability improving and increased momentum across our core Assessment business, despite less favorable market conditions in our other divisions, as previously guided,” says Mark Cook, CEO of RM plc. “We remain on track to achieve our targets for the year, and I am excited about the new opportunities that the recent launch of RM Ava opens up for the business, our customers and learners globally.
“Our lenders continue to be very supportive of our strategy as reflected by the latest extension of our banking facility to July 2027. On top of this, the positive outcome of our defined benefits pension schemes valuations strengthens our financial position moving forwards.”
