Annual report and financial statements
for the year ended 30 November 2023
plc
50 years of enriching the lives of learners
Company number 01749877
Overview
Inside this report
Overview
2 Group at a glance
4
5
Our purpose, vision and mission
Our culture
Strategic report
8 Chair’s statement
10
CEO's statement and
strategic review
17 Our business model
18 Our market
20 Key Performance Indicators
26 CFO's statement
34 Financial viability report
36 Managing the Group’s risks
37 Emerging risks
38 Principal risks and uncertainties
42 Sustainability report
48
Task Force on Climate-related
Financial Disclosures
Corporate governance
70 Board of Directors
72 Corporate governance report
84 Nomination committee report
88 Audit and Risk Committee report
96 Remuneration committee report
119 ESG committee report
120 Directors’ report
124 Statement of directors’ responsibilities
125 Directors duties statement
Financial statements
128 Independent auditor's report
140 Consolidated financial statements
145 Company financial statements
147 Notes to the financial statements
214 Shareholder information
215 Company information
58 Social value
59 Our people
63 Governance
66
Non-financial and
sustainability information
67 Section 172 statement
Financial summary
£'m
Revenue from continuing operations
Loss before tax from continuing operations
Discontinued operations1
Statutory loss after tax
Diluted EPS from continuing operations
Adjusted performance measures2:
Adjusted operating profit from continuing operations
Adjusted operating profit margin
Adjusted EBITDA
Adjusted (loss)/profit before tax from continuing operations
Adjusted diluted EPS from continuing operations
Adjusted net debt3
FY22
Variance
FY23
195.2
(41.2)
14.2
(29.1)
214.2
(20.8)
1.6
(14.5)
(51.8)p
(19.3)p
0.3
0.2%
7.0
(5.2)
(15.8)p
45.6
7.5
3.5%
12.9
5.3
4.2p
46.8
(8.9%)
98.1%
787.5%
100.7%
168.4%
(96.0%)
(3.3%)
(45.7%)
(198.1%)
(476.2%)
2.6%
1 Discontinued operations include the results and net gain on disposal arising from the sale of the RM Integris and RM Finance Businesses and related
assets on 31 May 2023.
2 Throughout this statement, adjusted operating profit, adjusted EBITDA, adjusted (loss)/profit before tax and adjusted EPS are Alternative Performance
Measures, stated after adjusting items (See Note 6) which are identified by virtue of their size, nature and/or incidence. The Group reports adjusting
items which are used by the Board to monitor and manage the performance of the Group, in order to ensure that decisions taken align with the
Group’s long-term interests. Adjusting items are identified by virtue to the size, nature or incidence at a segment level and their treatment is applied
consistently year-on-year..
3 Adjusted net debt is defined as the total of borrowings less capitalised fees, cash and cash equivalents and overdrafts (see Note 6). Lease liabilities of
£16.5m (2022: £19.1m) are excluded from this measure as they are not included in the measurement of adjusted net debt for the purpose of
covenant calculations (see Note 31).
10
RMplc Annual report and financial statements 2023
RM plc Annual report and financial statements 2023 RM plc (RM) is a leading global educational
technology (EdTech), digital learning and
assessment solution provider.
We are a globally recognised EdTech product and solutions company,
focused on providing best-in-class solutions for the full learning life
cycle, from early years through to higher and professional education.
50 years enriching the lives of learners
Stabilised the business and made significant
operational progress following severely
demanding operational challenges
•• Consortium business ceased trading in
December 2023 following FY23 losses of
c.£10m.
•• Over-specified ERP system implementation
permanently ceased to avoid significant
additional costs.
•• Two into one distribution centre
consolidation commenced, realising £1.5m
annualised savings.
•• Transformation driven restructuring delivering
additional annualised savings of £8.5m, as
announced, with further gross annualised
cost synergies of £10m identified and
commencing in FY24, with plans to reinvest
£5m in the business to support growth.
•• Established and embedded new leadership
team alongside the completion of a
thorough strategic review of the business.
Clear strategy unveiled – to become a
leading EdTech company serving global
customers
•• Strategic Plan unveiled to build a Global
Accreditation Platform to take advantage of
the education transformation towards fully
on-screen examinations. Strategic Portfolio
Roadmap of RM developed IP, products and
solutions delivered to accreditors, educators
and directly to learners for adjacent solutions.
•• Further international expansion with
strategic aim of capturing the significant
future growth opportunities in the $222
billion Global EdTech market¹.
•• New wins with strategic customers as
foundation customers move towards fully
digital assessment and accreditation processes.
New wins are proof of the expertise and
customer appeal of the new RM.
•• Move towards a streamlined and customer-
centric target operating model, creating greater
agility and gross cost synergies of £20m.
1 Source: IMARC Group
11
RM plc Annual report and financial statements 2023
Overview
Group at a glance
About us
RM provides market-leading products
and services to educational
institutions, exam bodies and
international governments which
improve, simplify and support
education and learning.
RM has a fantastic portfolio of managed
services, IP and digital platforms with
leading market positions. Our divisions
operate in a market with structural growth
drivers, and continued advancement
of technology, with the global EdTech
market expected to grow at a compound
annual growth rate (CAGR) of c.12%
from 2024 to 2032. The education
sector is transforming, and RM is well
positioned to capitalise on this.
Our operating divisions
Our operations span three divisions
supported by a corporate services
function.
RM Assessment, RM Resources and
RM Technology, with RM Resources
consisting of the TTS (Technical
Teaching Solutions) business, which
design and own our proprietary
products for schools, and (formerly)
Consortium, our UK school supplies
business, which ceased trading in
December 2023.
2023 revenue, split by assessment,
resources and technology
29%
10%
22%
2023
£195.2m
39%
Assessment
Resources – TTS
Resources – Consortium
Technology
22
We help learners globally
We help learners globally through their entire education journey
from Early Years through to Higher Education and Professional
Qualifications.
We help educators globally
Our managed services in the UK help schools run effectively
while ensuring exams can be marked globally.
We help accreditors globally
We help accreditors provide unbiased and secure courses,
assessments and results.
We are focused
We are focused on providing educators with physical and digital
teaching aids, and global assessment platforms with digital and
Artificial Intelligence (AI) enabled solutions, to optimise
learner’s success.
A
Assessment is a global leader in platform delivery of digital assessment and
exam marking solutions for accreditors, educators and learners. The division’s focus on
leading customers through the journey to digital assessment maturity was rewarded
and recognised at the e-Assessment Association conference. RM were awarded the
‘Most Innovative Use of Technology in Assessment’ for its exam malpractice service,
recognising RM’s continued commitment to overcoming the challenges of digital
adoption and enabling the education industry.
Global opportunity as assessment moves 100% digital
R
Resources collaborate with
teachers and educational experts from
across the globe to create unique and
innovative learning resources and
environments for children in more than
115 countries. Our experts develop
award-winning, unique curriculum-
aligned resources, from concept to
creation.
T
Technology cutting
through complexity and bringing
innovation and new ways of working,
we help educators harness technology
to improve the learning environment.
We provide platform-based managed
services, ICT solutions, and value-added
reseller services to schools, authorities
and trusts.
Continuing positive demand for
TTS' unique IP
A strategic partner for schools, helping
them to drive more engaged learning
For more information on progress during 2023, please see the CEO's strategic review 10 to 16.
RM plc Annual report and financial statements 2023 Overview Group at a glance continued
Where we operate
We have a truly global customer base which is demonstrated in the map below.
Global EdTech market value US$222bn1
Middle
East
Israel
South Africa
South America
Lithuania
Caribbean
Canada
USA
1 Source: IMARC Group, Statista
Poland
Sweden
Slovenia
Nigeria
UK
Australia
Singapore
China
India
New Zealand
Pakistan
33
RM plc Annual report and financial statements 2023 Our purpose, our values, our culture
Overview
Our purpose, vision and mission
RM is a globally recognised EdTech
company that provides best-in-class
products and solutions.
From the early days of building
computers and providing internet for
schools, RM today designs, builds and
delivers a large proportion of its own
unique IP to a global customer base,
via its physical curriculum-based
resources, its own marking and
assessment platforms and unifying
technologies for computing,
networking and security filtering. The
cohort of customers are classified as
accreditors, educators and learners
and the need for online and digital
solutions is driving the global demand
for EdTech.
Purpose
As the original pioneers of EdTech, RM's purpose is to enrich
the lives of learners globally
RM designs, builds and delivers physical and digital products
and solutions via three operating divisions which are unified by
50 years of education knowledge and a passion for delivering
to accreditors, educators and learners globally, underpinned by
the British curriculum, and covering
the full learning life cycle from
early years to higher
and professional
education.
Vision
A world where RM is synonymous with EdTech
innovation for enriching the lives of learners.
Mission
Globally recognised EdTech product and solutions company
focused on providing best-in-class solutions from early years to higher
and professional education.
Respected Education organisation that is caring, open and diverse that
fosters trust, positive change and sustainable growth.
44
44
RM plc Annual report and financial statements 2023 Overview
Our culture
Five to drive
Underpinning our culture are
a set of five behaviours, called
Five to Drive, which inspire
our choices and performance:
1 Consider it done:
We hold ourselves accountable, as
individuals and as a company, for
delivering on our promises. We
can be relied upon to get the job
done for our customers and
ourselves. We are tenacious in
delivering positive results and
respond energetically when faced
with new challenges.
2 Make it simple:
We make complex issues easy to
understand and we strive for the
simplest solutions that deliver the
most significant results for our
customers and ourselves. We say
it as it is and do not assume that
how we have done it in the past
will necessarily be how we do it in
the future.
3 Win together:
We excel when working with our
customers and with our
colleagues – motivated by the
belief that diverse teams working
together are much greater than
the sum of their parts. We strive to
see things from the point of view
of others, building trust, and
working collaboratively to achieve
great results.
4 Be brave:
We are ambitious, and we push the
boundaries to deliver great results
for our customers and for our
business. We do not settle for less
than great, or shy away from the
difficult, and we don’t let fear stifle
our true potential.
5 Be curious:
We have an intense desire to
understand our customers and to
imagine new possibilities for our
business and theirs. We are hungry
to learn and seek out new ideas to
expand our networks and to
develop our understanding. We
are inquisitive, creative, and
question how things can be done.
These behaviours are intended to
drive positive alignment
throughout the organisation for
the benefit of all stakeholders with
whom we do business, supported
by our 'High Five' peer-to-peer
recognition scheme for
employees that have
demonstrated these behaviours in
fostering a sense of community.
The Board receives regular reports
and updates from the Chief
Executive Officer, Chief Financial
Officer, and Company Secretary
as well as other members of the
Executive Leadership Team and
the Group. These reports and
updates cover a wide range of
matters to ensure that policy,
practices and behaviour in the
Group are aligned with the
Company’s purpose, values and
strategy and that any issues that
may give rise to concerns are
brought to the attention of the
Board.
For more information on how the Board
is kept up to date, please see the
Corporate Governance Report on pages
68 to 125.
55
55
RM plc Annual report and financial statements 2023 Strategic report
CEO's statement and strategic review
8 Chair’s statement
10
17 Our business model
18 Our market
20 Key Performance Indicators
26 CFO's statement
34 Financial viability report
36 Managing the Group’s risks
37 Emerging risks
38 Principal risks and uncertainties
42 Sustainability report
48
Task Force on Climate-related
Financial Disclosures
58 Social value
59 Our people
63 Governance
66
Non-financial and
sustainability information
Section 172
statement
67
Strategic report
The Directors present the RM plc
Strategic Report for the year
ended 30 November 2023.
The Strategic Report on pages 8-67 has
been approved by the Board and signed
on its behalf by
Mark Cook
Chief Executive Officer
14 March 2024
66
6
RM plc Annual report and financial statements 2023 Strategic report
77
7
RM plc Annual report and financial statements 2023 Strategic report
Strategic report
Chair’s statement
Other transactions in 2023 include the disposal of the RM
Integris and Finance businesses completed in May, after
being approved by our shareholders. The sale generated
£10.9m in net proceeds and helped to reduce our net debt.
It is also important to acknowledge our lenders who have
backed our strategic plans and we are grateful for their
continued support during the year and beyond.
Decision to cease trading in Consortium
In November 2023, we announced the difficult decision to
cease trading in the loss-making Consortium business (part
of the RM Resources division) following a detailed review of
RM’s portfolio and in line with the future strategic direction
for the Company. The decision was made with the full
cooperation and support of the Company’s lenders and
enables Resources division management to focus on the
successful TTS business going forward. We engaged with
our key shareholders and employee groups following the
announcement to close Consortium and they understood
the rationale for following this path.
Outlook
The tough decisions we have taken in 2023 set us up well
for the year ahead and we remain confident in our ability to
execute our strategy. RM has market leading positions, channel
strength and a good product and market fit across its portfolio.
The business operates in an important and resilient marketplace
and is well positioned to deliver sustainable growth in response
to a number of positive structural trends in the education
market. We expect digitalisation in the EdTech space to further
evolve and the likely UK government elections in 2024 are
expected to present new opportunities, albeit with potential
risks, which we are poised to react to. We remain fully
committed to our core purpose to Enrich the Lives of
Learners globally.
Focus on people
We have an intense focus on our people with engagement
and transparency being of key importance to us. During the
year we have enhanced employee engagement through the
appointment of a new Head of Internal Communications
and Engagement and we have initiated quarterly all-company
town hall sessions, led by the CEO, to update our people on
strategy and direction. A newly formed six-monthly employee
survey allows all employees to express their views on a host
of matters and a detailed summary of the findings is presented
to the Board for its input. The participation rate has been
strong and we look for continued improvement.
2023 in review
It has been a challenging year for RM plc with financial
performance materially impacted by the loss-making
Consortium business, leading to an announcement in
November to close the operation (see below). This should
not overshadow the considerable progress in the
transformation programme achieved by the newly formed
leadership team (see pages 16 and 70) delivering operational
efficiencies, cost savings, strengthened internal controls,
and, critically, laying the foundations for future growth. I
am pleased with the progress made in strengthening our
core business capabilities and the expansion of our digital
proposition. This has led to exciting opportunities across our
Assessment business which have been converted into new
contract awards, enabling us to expand our services for
digital assessment, supporting learning outcomes within
schools, further education and professional qualifications.
88
RM plc Annual report and financial statements 2023 Strategic report Chair’s statement continued
Governance
The Board remains committed to maintaining high standards
of corporate governance. It comprises five Non-Executive
Directors (including me, as Chair) along with the Chief
Executive Officer and the Chief Financial Officer. We have
implemented systems to ensure oversight of the business
meets the standards expected by our shareholders. The Board
and its four committees – Audit and Risk, Nomination,
Remuneration and ESG – operate effectively. In November
2023, we conducted a review of the effectiveness of the Board
and its committees. Further information can be found on
page 77. The committees have been very active during the
year. The Audit and Risk Committee oversaw the ongoing
process to improve financial controls and considered
methods used to account for significant transactions that
took place where different approaches were possible. The
Nomination Committee led the process to select six new
board roles, including a CEO and CFO. The Remuneration
Committee determined the remuneration arrangement for
the new leadership. The recently formed ESG Committee
reconfirmed its commitments, particularly the environmental
goals. I would like to thank the Board for its hard work over
the year.
New leadership team
During this challenging year, so many people within the
business have delivered over and above – I have been
continually impressed by their resilience and passion – and
on behalf of the Board I would like to thank the whole team.
We have continued to evolve and strengthen the Board and
leadership of the Group during the year. Simon Goodwin
joined the Board as Chief Financial Officer in August 2023,
replacing Emmanuel Walter. Simon brings over 15 years of
experience in finance leadership roles and will be central to
the Group’s strategy and helping to drive value across the
business. Gauri Chandra joined as CEO of our India
operations in January 2023. In June 2023, Dr Gráinne
Watson was appointed to the new role of Chief Digital
Officer and she was joined in September 2023 by Sarah
Fawsitt, our new Chief People Officer, followed by Daniel
Fattal who was appointed in November 2023 as Director of
Legal and Company Secretary.
bring valuable and relevant current tech insight, complementing
the existing strengths of the Board.
At the end of March 2023, Paul Dean stepped down from
the Board and Richard Smothers, who joined as a Non-
executive Director in January 2023, replaced Paul as Chair
of the Audit and Risk Committee. In September 2023 Vicky
Griffiths, Non-Executive Director, stepped down from the
Board, and Jamie will now take on the role of Chair of the
ESG Committee. Charles Bligh, Non-Executive Director,
also stepped down in October 2023. Patrick Martell, Senior
Independent Director and Remuneration Committee Chair
stepped down from the Board in December 2023 and Chris
Humphrey, Non-executive Director, took over as Senior
Independent Director. Additionally, Chris took on the role of
Chair of the Remuneration Committee in October 2023.
I would personally like to thank Paul, Vicky, Charles and Patrick
for their valuable contributions to the Company during their
time at RM. On behalf of the Board, I wish them all the best
for the future. I would also like to thank Emmanuel for his
contribution and commitment to RM while serving as
Interim CFO and wish him well for the future.
With all these changes, six out of seven Board members were
newly appointed in 2023, along with the other senior leadership
positions noted above. The impact of so many changes in a
short space of time should not be underestimated and I am
delighted with the broad range of talent and composition
of the team as we move the business forward.
Dividend
A condition of the extended and amended banking facility
agreement has been to restrict dividend distribution until the
Company has reduced its net debt. Therefore, we are not
recommending the payment of a dividend. See page 30 for
further information banking covenants and conditions.
The Board understands the importance of dividends to our
shareholders and are clear that reinstating the dividend is a
key milestone on our recovery path.
In November 2023, Carolyn Dawson OBE and Jamie Murray
Wells OBE joined the Board as Non-Executive Directors and
I am delighted to be welcoming them both to the Board of
RM plc. They are both accomplished business leaders who
Helen Stevenson
Chair of the Board of Directors
14 March 2024
99
RM plc Annual report and financial statements 2023 Strategic report
CEO's statement and strategic review
avoided further losses with additional cost benefit, already
reflected in market expectations for FY24. Following the
failed go-live of the over-specified ERP system within
Consortium in FY22, we permanently closed down the
roll out to the Group, capping the budget overruns and
subsequently cancelled the project, to avoid significant
additional costs. This decision to cease trading in Consortium
will allow RM Resources’ management to focus on its
successful TTS business, which is profitable and has
significant international growth potential. In the second
half of the year, we focused on strengthening RM’s internal
capabilities and leadership team, implemented further
significant cost savings, and secured the support of our
lenders for our future strategic plans (details of which can
be found below). This includes: commencing a two into
one distribution centre consolidation, realising £1.5m
annualised savings and a Transformation driven restructure
delivering additional annualised savings of c.£8.5m, as
announced at our half year results. The closure of Consortium
has culminated in non-cash goodwill and asset impairments
of £38.9m.
The new management team’s focus on the foundational
strengths, intellectual property, and assets of the business
will drive RM’s return to revenue and profitability growth.
The strength of our underlying business is demonstrated by
the major strategic and long-term customer contracts we
have won in our Assessment business towards the end of
the year which are core to RM’s strategic growth plans.
Financial and operational performance
As expected, our financial performance reflected the
impact of the critical actions taken to stabilise the business,
and I am pleased that we finished the year in line with our
updated guidance, following the decisive cost actions taken
in the second half. Our Group revenue was £195.2m, down
9%, reflecting the continued decline in Consortium trading,
challenges in UK schools’ budgets which impacted our TTS
UK and Technology managed services revenues, but with
growth across both our Assessment and TTS International
businesses. Adjusted operating profit from continuing
operations was £0.3m, and adjusted EBITDA was £7.0m.
We finished the year with a slightly improved adjusted net
debt position of £45.6m.
Group Performance Overview
A year of stabilising, simplifying, and strengthening
2023 in review
When I joined RM in January 2023, the business was facing
unprecedented operational challenges which have impacted
our financial performance in the year. We took considered,
but decisive actions to address these issues through our
Transformation programme, as well as embarking on a cost
reduction and efficiency drive across our entire business.
As we closed the year these inherited challenges have now
been addressed, and we emerge with clarity on our strategic
direction with a more focused stable platform for future
growth and strategic development.
During the year, through our actions, we mitigated the
considerable negative financial impact of Consortium, which
continued to hold back the overall performance of the Group,
culminating in the difficult decision in November to cease
trading in the loss-making business, which stopped taking
orders at the end of December 2023. This decision has also
1010
RM plc Annual report and financial statements 2023 Strategic report CEO's statement and strategic review continued
The new management team made significant inroads into
the transformation and continuous improvement programme.
These management actions have provided a more stable
business, identified cost savings, and started on the road of
continuous efficiency improvements across the entire business.
The underlying RM business today (ex-Consortium) is healthy,
with FY23 revenue of £175.9m (FY22: £180.4m) and adjusted
operating profit of £10.0m (FY22: £12.5m), with strong
revenue and margin growth prospects in the UK and
internationally. With trading ceased in the loss-making
Consortium business, we expect to see a measured
improvement to our financial performance going forward.
Note: Adjusted operating profit, adjusted EBITDA and adjusted net
debt are Alternative Performance Measures, which are defined in
Note 2 and Note 6.
Divisional performance
The RM Assessment division, a global leader in platform
delivery of digital assessment and exam marking solutions
continues to grow, with revenue increased by nearly 9% to
£42.3m (FY22: £38.9m) and adjusted operating profit up
39% to £10.3m (FY22: £7.4m), an adjusted operating margin
of 24.2% (FY22: 18.9%), reflecting the emerging
opportunities in the global digital assessment market.
This business has made strong progress throughout the
year, with continuing successful delivery of live exam and
marking sessions worldwide, including the first full session
delivery for three new clients across school exams, vocational
exams, and learners training for accountancy qualifications.
Customer contract renewal performance continued to be
strong throughout the year with over £16m of renewals in
FY23 and only one small contract loss. We also achieved
8 contracts for new services with new and existing clients,
expanding our set of solutions within support of schools,
further education, and professional qualifications.
The business’ focus on leading customers through the
journey to digital assessment maturity was recognised by
an award at the e-Assessment Association conference, for
the ‘Most Innovative Use of Technology in Assessment’ for
its exam malpractice service, commending our commitment
to overcoming the challenges of digital adoption in the
education industry.
The year ended on a high with two further contracts in the
professional qualifications market at ‘preferred bidder’ status,
and post year end we achieved preferred bidder status with
another two major strategic customers for their long-term
digital transformation programmes, providing good
momentum into FY24.
1111
RM plc Annual report and financial statements 2023 Strategic report CEO's statement and strategic review continued
Following the closure of Consortium, our RM Resources
division now consists solely of our flagship brand TTS
(Technical Teaching Solutions) which operates both within
the UK and internationally. TTS's UK business was also
impacted by challenges in UK schools' budgets. The
business collaborates with teachers and educational
experts from across the globe to create unique and
innovative learning resources and learning environments for
children in more than 100 countries. This includes the TTS
programming journey, which is an innovative robotics range
designed to develop computational thinking and
programming skills, from early years to primary and for
children with special educational needs. Our FY23 performance
includes the Consortium business, now closed, with revenue of
£19.3m, down 43% (FY22: £33.7m) and an adjusted
operating loss of £9.7m (FY22: loss of £5.0m).
TTS International saw a strong performance in the year
with continued growth in key market territories through our
international schools and distributors channels. The business
remains focused on the continued development of its own
designed TTS product ranges, which drive continued growth
worldwide, and access to Education Ministries and
Government bodies with greater buying power.
The growth in TTS International is being built
from a platform of 130 global distributors
in 115 countries serving tens of
thousands of schools
and educators.
Our RM Technology division is a strategic partner for schools,
helping them to drive more engaged learning, more
collaborative teaching, and better outcomes through
technology. We completed the redesign of the business’
operating model and improved its efficiency during the
year, and the sale of RM Integris and Finance was also
completed, generating net cash proceeds of £10.9m. As
anticipated, the Technology division returned to profitability in
the second half as a result of the impact of the cost savings
initiated earlier in the year, and on the back of higher revenue
largely from "Connect the Classroom" projects. It is expected
to be sustainably profitable on an ongoing basis.
Revenue was £57.7m, down 5.3% (FY22: £60.9m), reflecting
a challenging market for managed services due to pressures
on school budgets due to inflation and infrastructure, although
revenue grew marginally in the second half. Adjusted operating
profit was £0.7m (FY22: £2.2m), reflecting a return to
profitability following the losses incurred in the first half.
Given the efficiency improvements made during the year
we expect adjusted operating margin to improve going
forward from the 1.3% achieved in FY23.
We were pleased to have extended our relationships with
Education Scotland (Glow) and Brooke Weston Trust (BWT).
Customer retention remains strong at 95% with more
customers starting to explore and take an interest in other
product lines as part of our upsell program and we are
excited by the opportunities to grow our new managed and
professional services portfolio in FY24. The focus remains
on Multi Academy Trusts and public sector customers (e.g.
local authorities) and internationally offering managed
services, ‘tech in a box’ solutions.
1212
RM plc Annual report and financial statements 2023 Strategic report CEO's statement and strategic review continued
New Strategic Plan
Creating a leading global educational technology,
digital learning and assessment solution provider
RM started its journey in 1973 as a pioneer of EdTech in Oxford,
building computers and networks for the education sector, as
technology emerged as a key business enabler. Our
educational resources have been supplied to support school
curricula with hundreds of RM own-designed products,
resources and solutions supporting accreditors, such as
awarding bodies, and educators such as teachers; growing
internationally to support country wide education curricula in
the Americas, Middle East and Australia.
The assessment of a learner’s abilities is a key element of RM’s
solution set and this is evolving from end point assessment (i.e.
the exam or awarding point) for both paper-based and online
marking into a full end to end digital process for the collation
and marking of exams and ongoing assessment towards the
end point exam. RM is enhancing its current accreditation
platform to enable global scale and end-to-end digital process
that transitions all paper exams to be authored and delivered on
screen over the next 10 years – this will enable our customers
to have 100% of exams on screen by the turn of the decade,
with the exciting possibilities that digital examinations bring for
innovative new ways to assess students.
Why are we doing this?
Where we are now
What we’re
going to do
Where we’re
going to be
Significant management
time has been exhausted
in dealing with “Evo &
Consortium”
True valuation of RM
hidden by the noise of the
underperforming parts of
the group with an unclear
company structure &
strategy
Decisive actions taken,
removed problems and
business now more stable
and profitable
Investment in the digital
transformation of
education
Focus on RM USPs and
digital transformation
opportunity in education
Clear set of products and
solutions for learners,
educators and accreditors
A company that has 3-4x
the value today
A de-leveraged, dividend
paying company, with
double-digit growth and
EBITDA 5x today
A leading global EdTech
business providing
products and solutions
to accreditors, educators,
learners, and globally
1313
RM plc Annual report and financial statements 2023 Strategic report CEO's statement and strategic review continued
Today, RM is a partner of choice for thousands of educators
globally, with 50 years of educational experience and being
a trusted advisor to learners, educators, and accreditors.
As we plan for the future RM, our core ambition will be to
support learners with a ‘lifetime of learning experience’ with
the purpose of enriching the lives of learners globally. Core
to the future of RM are the digital solutions that support a
learner’s assessment of progress towards an examination,
as well as the accreditor’s ability to provide a platform to
enable and enhance their examination assessment.
These new guiding principles underpin our new strategy:
•• Build a Global Accreditation Platform to enable end-to-
end digital examinations, authoring and accreditations.
•• Building a more customer-centric company focused on
accreditors, educators, and adjacent learner direct
solutions.
•• High proportion of RM designed and owned IP in the
delivered product and solution portfolio.
•• Build on the global opportunity embedded within our
deep experience of the British and other international
curricula from our customer base.
•• Addressing the needs of learners, educators, and
accreditors, while supporting the lifetime of learning,
from pre-school to higher education and professional
qualifications.
•• Realising growth opportunities in the $222 billion Global
EdTech market through international expansion.
New strategic vision
Opportunity
A business of three parts
Vision
One company, one clear
go-to-market approach
Silo view of learning lifecycle
Products and solutions from
early years to adulthood
Analogue and online assessment
Silo view of international expansion
Fully digital Global
Accreditation Platform
One global growth plan
via international curricula
Silo view of RM products and solutions
Unified portfolio roadmap
RM the global EdTech product and solutions company
1414
RM plc Annual report and financial statements 2023 Strategic report CEO's statement and strategic review continued
UK Investment
Investment in EdTech in
UK, with a covid peak of
US$609m in 2021
Value
Global market
worth US$222bn
in 2023
CAGR
c.12% globally
from 2024 to 2032
The
EdTech
Market
Drivers of Growth
New Tech available
for Online and
Distance Learning
Key segments
Hardware, software
and content Hardware
accounts for majority
share
Sources: imarc group, Statista
Product and Solution Roadmap
RM operates in the Global EdTech market valued at $222
billion, which has structural growth drivers, strong market
positions and, as a result of the continued advancement of
technology across the education sector, is expected to
grow at a CAGR of c.12% from 2024 to 2032. Key market
drivers include the digitalisation of assessment, the
expansion of technology in education worldwide and a
continued focus on developing IP resources, particularly for
the early years and SEN sectors.
There is a digital transformation taking place in the
assessment area of EdTech and RM is very well placed to
support accreditors’ digital transformation journey over the
next decade. We have been providing platform solutions
such as Assessor© and Assessment Master© to enable our
global customers to embark on a digital transformation of
their learning, marking and end-to-end business process.
RM’s 50 years of knowledge and experience is being
encapsulated in an advisory and consulting capability that
will enable our customers and prospects to tap into RM’s
research, innovation, and development centres.
With the support of RM’s lenders and funding from the
transformation driven cost savings, the strategy programme
will look to enhance and build out these core EdTech
solutions, supported by our teams in UK, Europe, Middle
East, America, Australia, and Asia. This investment will
consist of re-investment of cost savings into the capability
of Sales & Marketing and go-to-market initiatives within the
customer facing units to support global growth plans.
1515
RM plc Annual report and financial statements 2023 Strategic report CEO's statement and strategic review continued
Education is on a digital transformation
Accreditors
RM Digital Assessment Journey
Enhancing
Process
Going
Digital
Embedding
digital
Transforming
Assessment
Transforming
Learning
The
beginning
Enhanced
efficiency and
security
Successful
initial adoption
Digital-first
Authentic
and flexible
assessment
We innovate approaches to digital assessments across practice, progress, evidence collection
and exams, and we work with customers throughout the lifelong learning journey.
FY24 Strategic Programme actions
RM has evolved over time, creating three EdTech
businesses, serving markets in the UK, Europe, Middle East,
America, Australia, and Asia, with a central group structure.
With our clearer core strategy and a clean line of sight to
the three customer groups – learners, educators, and
accreditors – the business will continue to have three
customer facing go-to-market units but only with their
associated marketing and sales costs. To support the new
strategy, a new Target Operating Model will be introduced
during the coming year, flattening the internal back office
corporate functions which will focus on core processes to
enable the optimum customer solution, creating additional
gross cost synergies of c.£10m, with £5m to be reinvested
in Sales & Marketing to support growth.
We have the right people, the right core solutions, a global
market opportunity, and a shared ambition across the
organisation to deliver a higher performing, more profitable
RM. Whilst we have achieved much in the last year, there is
still much to be done and our turnaround will take some
time to translate to a high performing new RM business,
with good progress expected from FY25.
Board and Senior Leadership changes
Following the operational and liquidity challenges of FY22 it
was necessary to review the expertise and relevant experience
of the Board and the Executive Committee to have a
technology and growth mindset as RM embarked on its
strategic transformation.
Simon Goodwin joined the Board and Executive Committee
as Chief Financial Officer in August 2023. Simon brings over
15 years of experience in finance leadership roles and will
be central to the Group’s strategy and helping to drive value
across the business.
Further Executive Committee appointments during FY23
included: Gauri Chandra as CEO of our India operations in
January 2023; Dr Grainne Watson to the new role of Chief
Digital Officer in June 2023; Sarah Fawsitt as our new Chief
People Officer in September 2023; followed by Daniel Fattal
who was appointed in November 2023 as Director of Legal
and Company Secretary.
These new additions, along with six out of seven board
members being appointed in FY23, provide us with a senior
leadership team that contains a broad range of talent and
relevant experiences to help drive the business forward.
Mark Cook
Chief Executive Officer
14 March 2024
1616
54321RM plc Annual report and financial statements 2023
Strategic report Our business model continued
Our business model
RM is an education technology
(EdTech) organisation with a portfolio
of physical and digital solutions bought
by accreditors, educators and learners.
Following the announcement of our
new Strategic Programme we will be
reviewing our business model during
2024 and updating it to reflect the
new Target Operating Model.
To read more about our new Strategic
Programme, please read our CEO's
statement on pages 10 to 16.
With a long education heritage and strong
purpose-led culture RM aspires to enable
the improvement of teaching, training,
assessment and learning, especially in
schools, colleges, universities and
professional bodies to improve learner’s
knowledge and develop skills.
As each division has a different market
and product focus, they are aligned to
the trajectory of their respective markets
while aspiring to bring the breadth of
their expertise and relationships together
to create a cohesive organisation,
ensuring the resources available to
us have the biggest impact:
Strong market positions
Strong and distinctive brands that are well respected in the UK and internationally.
Breadth and depth of
knowledge
Market-leading products
Insight from working with
the leading organisations
in education
Highly skilled people with deep
domain knowledge
RM has a rich heritage in education, trading since 1973, and across the
Divisions has established an extensive sector knowledge to enable it to
bring unique breadth of value to the customer.
We have leading products and services in each of our respective markets
focused on the domains of curriculum content, digital assessment and
the use of technology to improve education environments.
We benefit from long relationships with some of the leading organisations
in their field from globally renowned assessment organisations to ministries of educa-
tion, leading schools, trusts and nurseries, thought leaders and educators, Universities
and partners that include the largest global technology organisations.
This creates a unique network of knowledge and insight with which to create value for
our customers – the RM expert layer.
We employ some of the best and most passionate people in the education services
sector combining functional expertise, a deep sector knowledge
and customer empathy.
Purpose-led culture
Above all, we recognise our role in society and our people are united
in seeking to enrich the lives of learners worldwide.
Common purpose and vision
Enrich the lives of learners
A
Assessment
Enhancing the role digital
assessment solutions play
throughout the lifelong
learning journey.
Resources
Innovative curriculum
resources and inspiring
content.
R
T
Technology
Technology to enable,
improve and underpin the
learning environment.
Supported by centralised corporate functions that support Group-wide priorities and manage Group strategy,
risk and opportunity and capital allocation.
Supported by RM Education Solutions India who perform a range of services for all Divisions and central
functions including software development, technology support, and back-office services.
1717
RM plc Annual report and financial statements 2023 Strategic report
Our market
Market Trends
The global EdTech market has structural growth drivers,
strong market positions and, as a result of the continued
advancement of technology across the education sector,
is expected to grow at a CAGR of c.12% from 2024 to
2032. RM is well positioned to capture this future growth
in the global EdTech market.
Key market drivers:
Digital delivery in assessment
Increasing drive to move to digital assessment solutions for
examinations and throughout the learning journey.
Emergence of AI challenging the nature of education and
assessment.
Key market participants moving to full digital assessment – for
example with all UK school examination bodies announcing
first digital exams ready for 2025.
Continued focus on developing IP resources
Market opportunities for RM owned and developed robotics educational
toys, particularly within early years and special educatoinal needs (SEN)
highlighting the importance of childcare education with learning and
development from birth across the globe.
Clear focus and drive for existing markets and new markets in computer
science, programming, STEM (science, technology, engineering and
maths) and 21st century learning that align to our unique programming
journey of robotics propositions.
Use of technology in education
Accelerating as schools progress on a long-term
digital maturity journey, with only a fraction
currently considered digitally mature by the
Department of Education.
Global reach and scalable
solutions adaptable to
different educational
systems and cultures.
1818
RM plc Annual report and financial statements 2023 Strategic report Our market continued
Assessment
Market opportunities
•• The market’s appetite for digitisation of high stakes assessment is
accelerating, and with a growing desire for software-as-a-service (SaaS)-
based solutions.
•• To succeed with digital examinations, learners need access to, and can
benefit from, increased use of digital assessment technologies throughout
the learning journey – not just at the end when they sit an exam.
•• The rapid emergence of AI technologies will drive opportunity to enhance
and improve assessment process execution, and a necessity to change
assessment practices to make them fit for the world learners are being
educated to succeed in – to stay relevant in a future where the learner
needs to be equipped to use AI as a tool in their working life.
Short-term headwinds
•• Digital assessment is an emerging market,
and evolving quickly which can lead to
customers prolonging procurement
timelines as they consider varied
approaches.
•• Some regions showing appetite for
localisation of supply chain.
•• Challenging recruitment and skills
landscape could impact ability to move
at sufficient pace in the market.
Resources – TTS
Market opportunities
•• STEM learning, programming and 21st century learning remains a key
focus. 21st Century learning skills are widely used to underpin curriculums
to enable learners to develop and be ready with the right workforce skills
of the future.
•• Clear focuses and funding for early years and SEN as many countries are
investing in providing early childcare education and mentally healthy
classrooms particularly after the pandemic.
•• Our investment in rich and relevant curriculum-aligned content that provides
educators with lesson plans, activities, efficacy, CPD and support written
around our resources will provide Early Years and Primary educators a solution
as they will start to build their needs of digital resources to complement
physical resources that deliver a cohesive and blended teaching and learning
approach. TTS has very strong partnerships to provide a market place solution
for learning solutions putting us at the forefront of this opportunity.
Technology
Market opportunities
•• Our largest immediate market opportunity is cross sell and upsell of
product lines to existing customers.
•• Digital classroom solutions – Interactive whiteboards, digital projectors, and
other classroom technology tools are becoming more prevalent. These
tools enhance classroom interactivity and engagement.
•• With the increased use of digital tools, there is a heightened focus on
cyber security and data privacy in educational technology. Schools are
looking for solutions that protect student data and maintain secure online
environments.
•• Sustainability and green tech – schools and institutions are increasingly
looking for eco-friendly and energy-efficient technology solutions. This
trend aligns with broader sustainability goals.
Short-term headwinds
•• Continued budget pressures forcing
customers to prioritise spending to
essential purchases only.
•• Educators increasing need to see how
learning resources are curriculum
aligned to demonstrate value for money
and cross-curricular benefits.
•• Drawn out purchasing decisions with
tighter sign off processes to control cost
that could delay order placements once
new budgets received.
Short-term headwinds
•• Macro effects on school budgets are
meaning that schools need to prioritise
spending and technology and security
are dropping down the list. Schools are
trying to do more with less and to see if
they can extend the life of what they
have which increases risk.
•• We are seeing more Trusts pulling out of
tenders quoting lack of funds to pursue
the projects.
•• Tight budgets mean that schools are
prioritising price over quality and we
have seen a material drop in managed
service pricing over the last year.
1919
RM plc Annual report and financial statements 2023 Strategic report
Key Performance Indicators
Key Performance Indicators (KPIs) and our
strategic objectives
At a Group level, we have five strategic priorities which
are critical to delivering our strategy. Our key performance
indicators are aligned with these five overarching strategic
objectives and are designed to track progress across a
balanced set of metrics.
Reach more
customers
Attract & retain
talent
Improve share of
customer spend
Strong financial
discipline
Changes to KPIs going forward
In line with our new Strategic Programme (read more in our
CEO's statement on pages 10 to 16) we are reviewing the
metrics we use to track our progress. We will announce our
new KPIs in due course, and will report against them in the
2024 Annual Report.
As a result of this upcoming change, we have reported
performance against our current KPIs below, but have not
given any priorities for the year ahead against these measures.
To read more about our priorities for the year ahead, please
read our CEO's statement on pages 10 to 16.
Operational
excellence
Non-financial KPIs
Reach more customers
Why is it important / link to strategy
•• Defined target customers.
•• Critical to grow market share.
•• Build channel and scale advantage.
Definition, and how we measure success
•• Number of new contracts won.
•• Number of trading customers.
RM Assessment
Customers contracted with within
the year
RM Resources
Customers traded with within the
year
RM Technology
Customers traded with within the
year
2023
2022
2021
50
461
41
49,999
53,5741
62,0111
2023
2022
2021
4,105
4,1401
4,6151
2023
2022
2021
23,072
17,2091
20,1181
n RM TTS
n RM Consortium
1 prior-year figures have been restated due to restatement of FY22 revenue figures, which included disposals
Commentary on performance
•• RM Assessment saw very high customer retention rates and new customer wins across sectors.
•• Trading in RM Resources and Consortium was negatively impacted by ongoing operational challenges.
2020
RM plc Annual report and financial statements 2023
Strategic report Key Performance Indicators continued
Non-financial KPIs continued
Improve share of customer spend
Why is it important / link to strategy
•• Improve ROI from new customer acquisition
•• Focus on customer expansion opportunity within
Definition, and how we measure success
•• Average revenue per customer OR
•• Average number of products purchased by managed
each Division
service customers
RM Assessment
Average revenue per customer
RM Resources1
Average revenue per customer
RM Technology
Products purchased per managed
services customer
2023
2022
2021
844,891
835,2951
886,885
2023
2022
2021
943
1,477
1,5551
1,1131
2,007
2,242
2023
2022
2021
n RM TTS
n RM Consortium
3.2
3.4
3.2
1 prior-year figures have been restated due to updated definitions and the restatement of FY22 Revenue figures which included disposals
Commentary on performance
•• Record revenue in Assessment benefitting from continued volume growth and new contract wins.
•• Material reduction in Consortium business; decision taken to cease trading after the year end.
•• International growth in TTS offset by challenging UK market conditions.
Operational excellence
Why is it important / link to strategy
•• High-touch customer requirements.
••
Create ability to invest.
Definition, and how we measure success
•• Adjusted Operating Margin is calculated as adjusted
operating profit as a percentage of revenue (see Note 6).
RM Assessment
Adjusted operating margin
RM Resources1
Adjusted operating margin
RM Technology
Adjusted operating margin
2023
2022
2021
24.2%
18.9%
17.9%
2023
2022
8.6%
9.7%
(52.3)%
(14.8)%
2023 1.3%
2022
2021
3.6%
8.5%
n RM TTS
n RM Consortium
1 2021 and prior results noted presented, due to the segmental restatement from 2022 onwards (see Note 4)
Commentary on performance
•• RM Assessment continues to grow with Adjusted Operating Profit up 39% to £10.3m (FY22: £7.4m), an Adjusted Operating
Margin of 24.2%, reflecting the emerging opportunities in the global digital assessment market.
•• RM Resources TTS business saw growth in International business, offset by challenging UK education market conditions.
•• RM Resources Consortium's, which ceased trading after the year end, loss increased to £9.7m (FY22: £5.0m).
•• RM Technology returned to profitability in the second half of the year following the losses incurred in the first half.
Given the efficiency improvements made during the year we expect adjusted operating margins to improve going
forward from the 1.3% achieved in FY23.
2121
RM plc Annual report and financial statements 2023
Strategic report Key Performance Indicators continued
Non-financial KPIs continued
Attract and retain talent
Why is it important / link to strategy
•• People are critical for service delivery.
•• Substantial functional and sector expertise which
we want to retain.
•• Customer empathy and connection to purpose.
Definition, and how we measure success
•• Employee survey participation – number of employees
as a percentage of total employees who completed the
engagement survey.
•• Employee engagement score – Score based on a
combination of five scores for questions linked to
employee engagement, retention, and loyalty.
Employee participation rate
Employee engagement score
2023
2022
80%
79%
2023
2022
57%
65%
Commentary on performance
•• The FY23 survey was refreshed to provide comprehensive reporting and greater insight into how our people feel working
in the business.
•• The high level of participation in the survey has remained strong at around 80%.
•• The Company has undergone a period of significant transformation and as a result we have seen a decrease in overall
engagement compared with prior years.
•• Many scores have still held strong, most notably, there has been an increase in Company Confidence, Leadership,
Managers and Collaboration, indicating future optimism.
2222
RM plc Annual report and financial statements 2023 Strategic report Key Performance Indicators continued
Financial KPIs
Strong financial discipline
Why is it important / link to strategy
•• Need to invest while balancing risk and stakeholder needs.
•• Restore confidence in financial management and reduce debt levels.
Revenue
Definition, and how we measure success
•• Revenue from continuing operations.
Adjusted operating profit
Definition, and how we measure success
•• Adjusted operating profit, stated after adjusting items.
Revenue
2023
2022
2021
195.2
214.2
206.1
Adjusted operating profit
2023 0.3
2022
2021
7.5
16.5
Commentary on performance
•• Revenue from continuing operations was down
8.9% in the year to £195.2m (FY22: £214.2m).
•• Revenue growth of 8.7% in the strategic RM
Assessment business and 5.8% in TTS International
(RM Resources) partially offset revenue declines of
42.8% in the troubled Consortium business (RM
Resources), which ceased trading after the year
end, and challenges in UK schools budgets
impacting revenues for Technology managed
services and TTS UK.
•• Read more in the CFO review on pages 26 to 33.
Commentary on performance
•• Adjusted operating profit was down 96.0% to
£0.3m (FY22: £7.5m), due to the material reduction in
Consortium revenues combined with associated IT
implementation costs.
•• Read more in the CFO review on pages 26 to 33.
Note: Adjusted Operating Profit is an Alternative Performance
Measure, stated after adjusting items (see Note 6) which are identified
by virtue of their size, nature and/or incidence. The Group reports
adjusting items which are used by the Board to monitor and manage
the performance of the Group, in order to ensure that decisions taken
align with the Group’s long-term interests. Adjusting items are
identified by virtue to the size, nature or incidence at a segment level
and their treatment is applied consistently year-on-year.
2323
RM plc Annual report and financial statements 2023 Strategic report Key Performance Indicators continued
Financial KPIs continued
Adjusted diluted EPS
Definition, and how we measure success
•• Earnings per share from continuing operations, stated
after adjusting items, diluted by the number of share
options outstanding.
Adjusted net debt
Definition, and how we measure success
•• Defined as the total of borrowings, cash and cash
equivalents and overdrafts, less capitalised fees.
Adjusted diluted EPS
2023
2022
2021
(15.9)p
4.2p
14.0p
Adjusted net debt
2023
2022
2021
18.3
45.6
46.8
Commentary on performance
•• Adjusted diluted EPS was a loss of (15.9)p due to the
material reduction in Consortium revenues combined
with associated IT implementation costs.
•• Read more in the CFO review on pages 26 to 33.
Note: Adjusted diluted EPS is an Alternative Performance Measure,
stated after adjusting items (see Note 6) which are identified by virtue
of their size, nature and/or incidence. The Group reports adjusting
items which are used by the Board to monitor and manage the
performance of the Group, in order to ensure that decisions taken
align with the Group’s long-term interests. Adjusting items are
identified by virtue to the size, nature or incidence at a segment level
and their treatment is applied consistently year-on-year.
Commentary on performance
•• Adjusted Net Debt of £45.6m (FY22: £46.8m) reflects
lower profits, normalised working capital and exceptional
spend delivering business transformation activity, offset
by proceeds from the sale of the RM Integris and RM
Finance businesses and the sale of IP addresses.
•• Read more in the CFO review on pages 26 to 33.
Note: Adjusted net debt is an Alternative Performance Measure, stated
after adjusting items (see Note 6) which are identified by virtue of their
size, nature and/or incidence. The Group reports adjusting items
which are used by the Board to monitor and manage the performance
of the Group, in order to ensure that decisions taken align with the
Group’s long-term interests. Adjusting items are identified by virtue to
the size, nature or incidence at a segment level and their treatment is
applied consistently year-on-year.
2424
RM plc Annual report and financial statements 2023 Strategic report Key Performance Indicators continued
Financial KPIs continued
Cash conversion (adjusted)
Definition, and how we measure success
•• Defined as adjusted cash flow from operating activities
divided by Adjusted Operating Profit from continuing
operations.
Cash conversion (adjusted)
2023
2022
2021
(1,720)%
49%
82%
Commentary on performance
•• Cash conversion (adjusted) fell to (1,720)% from 49% in
FY22 as a result of negative working capital swing and
the fall in Adjusted Operating Profit, which was down
96% to £0.3m.
•• Read more in the CFO review on pages 26 to 33.
Note: Adjusted cash conversion is an Alternative Performance Measure,
stated after adjusting items (see Note 6) which are identified by virtue
of their size, nature and/or incidence. The Group reports adjusting
items which are used by the Board to monitor and manage the
performance of the Group, in order to ensure that decisions taken
align with the Group’s long-term interests. Adjusting items are identified
by virtue to the size, nature or incidence at a segment level and their
treatment is applied consistently year-on-year.
Dividend per share
A condition of the extended and amended banking facility
agreement has been to restrict dividend distribution until
the Company has reduced its net debt. Therefore we are
not currently able to recommend the payment of a final
dividend. For this reason, Dividend per share has been
removed from the reported KPIs.
See page 30 for further information banking covenants
and conditions.
2525
RM plc Annual report and financial statements 2023 Strategic report
CFO's statement
Financial review
Having joined RM during Q4 of the financial year, I was
immediately impressed by the decisive decisions that Mark
and the Board had already made to combat the financial
challenges that the business faced. Together we then
made the difficult decision to cease trading in the loss-
making Consortium business shortly after the end of the
financial year; ending a lengthy period of financial losses
and significant distraction for the Resources division and
RM as a whole.
FY23 was a challenging year financially for RM; caused primarily,
by the material underperformance of the Consortium business.
However, RM was also impacted by an increasingly challenging
domestic education market; characterised by falling budgets
and competing demands for expenditure, as UK schools dealt
with cost inflation and infrastructure challenges. That pressure
directly impacted TTS’ UK business, as well as the RM
Technology business; both of which saw revenues decline.
Internationally, FY23 was a much more encouraging year with
significant growth in both TTS International and the RM
Assessment business.
Financial performance
£'m
Revenue from continuing operations
Loss before tax from continuing operations
Discontinued operations1
Statutory loss after tax
Diluted EPS from continuing operations
Adjusted performance measures2:
Adjusted operating profit from continuing operations
Adjusted operating profit margin
Adjusted EBITDA
Adjusted (loss)/profit before tax from continuing operations
Adjusted diluted EPS from continuing operations
Adjusted net debt3
FY23
195.2
(41.2)
14.2
(29.1)
FY22
214.2
(20.8)
1.6
(14.5)
(51.8)p
(19.3)p
0.3
0.2%
7.0
(5.2)
(15.8)p
45.6
7.5
3.5%
12.9
5.3
4.2p
46.8
Variance
(8.9%)
98.1%
787.5%
100.7%
168.4%
(96.0%)
(3.3%)
(45.7%)
(198.1%)
(476.2%)
2.6%
1 Discontinued operations include the results and net gain on disposal arising from the sale of the RM Integris and RM Finance Businesses and
related assets on 31 May 2023.
2 Throughout this statement, adjusted operating profit, adjusted EBITDA, adjusted (loss)/profit before tax and adjusted EPS are Alternative
Performance Measures, stated after adjusting items (See Note 6) which are identified by virtue of their size, nature and/or incidence. The Group
reports adjusting items which are used by the Board to monitor and manage the performance of the Group, in order to ensure that decisions
taken align with the Group’s long-term interests. Adjusting items are identified by virtue to the size, nature or incidence at a segment level and
their treatment is applied consistently year-on-year.
3 Adjusted net debt is defined as the total of borrowings less capitalised fees, cash and cash equivalents and overdrafts (see Note 6). Lease
liabilities of £16.5m (2022: £19.1m) are excluded from this measure as they are not included in the measurement of adjusted net debt for the
purpose of covenant calculations. (See Note 31).
2626
RM plc Annual report and financial statements 2023 Strategic report CFO's statement continued
Despite these extremely challenging circumstances, we
managed to close the year with a small, but positive adjusted
operating profit from continuing operations and in line with the
market expectations which were updated at the Half Year.
Actions taken to increase efficiency and to reduce the cost
base of the business have contributed to that result and will
have further benefit as we head into FY24.
We ended FY23 with an adjusted net debt slightly improved
on FY22, and, again, in line with the half year guidance. One
off cash generation from the sale of RM Integris, RM Finance,
and excess IPv4 licences; was offset by the reversal of
significant working capital decisions taken at the end of FY22,
as well as higher interest payments and meeting our
pension obligations.
RMs long term banking partners, HSBC and Barclays continued
to demonstrate their support for the business throughout the
year. Our lenders have granted waivers to EBITDA covenants
during H2, have demonstrated pragmatism in their handling
of soft liquidity covenant breaches from the end of the
year, and have swiftly granted an extension to our banking
facility, which now runs to July 2026, with a new set of
covenants better aligned to the business’ outlook.
Finally, as previously identified, the financial control
environment within RM was below the required standard, as
a result of the business’ focus over several years on the failed
rollout of the Evo ERP project. The RM finance team have
worked extremely hard to support the business during this
challenging year, but to also make improvements to this
controls environment. While there is still further improvement
required, I am confident that the team will continue to
demonstrate the required focus and diligence, and that we
will deliver further improvements through the coming year.
Divisional performance
Following the decision by management to separately monitor the results of the Consortium and TTS brands in June 2023,
the previously reported RM Resources segment has been allocated between the RM TTS segment, which continues to be
operated by the Group, and the RM Consortium segment which is being closed. Prior year revenue and adjusted operating
profit/(loss) comparatives have been restated accordingly.
£'m
RM TTS:
Revenue
TTS
International
Adjusted operating profit
Adjusted operating profit margin
RM Consortium:
Revenue
Adjusted operating (loss)/profit
Adjusted operating profit margin
RM Assessment:
Revenue
Adjusted operating profit
Adjusted operating profit margin
RM Technology:
Revenue:
Adjusted operating profit
Adjusted operating profit margin
FY23
FY 22
Variance
75.9
52.2
23.7
6.0
80.6
58.2
22.4
7.8
7.9%
9.7%
19.3
(9.7)
33.7
(5.0)
(50.3%)
(14.8%)
42.3
10.3
24.2%
57.7
0.7
1.3%
38.9
7.4
18.9%
60.9
2.2
3.6%
(5.8%)
(10.3%)
5.8%
(23.1%)
(1.8%)
(42.8%)
94.0%
(35.5%)
8.7%
39.0%
5.3%
(5.3%)
(65.5%)
(2.3%)
2727
RM plc Annual report and financial statements 2023 Strategic report CFO's statement continued
Group revenue from continuing operations decreased by
8.9% to £195.2m (FY22: £214.2m) largely driven by lower
trading volumes in the UK elements of the Resources
division, with the continued decline of the Consortium
business, challenging market conditions in the TTS UK
business, and lower services revenue in the Technology
division following contract losses in FY22. FY22 also
included £1.3m revenue related to the sale of IPv4
addresses that have subsequently been classified as other
income. RM Assessment & the TTS International business
both grew year on year, up 8.7% and 5.8% respectively,
following new contract wins and increased sales activity.
Adjusted operating profit from continuing operations
decreased by 96.0% to £0.3m (FY22: £7.5m) predominately
driven by the lower trading volumes in the Consortium
business and increased Corporate costs linked to rebuilding
the finance and management teams, offset by the various
divisional savings initiatives commenced during the year.
RM TTS revenues decreased by 5.8% to £75.9m (FY22:
£80.6m) driven by challenging UK education market
conditions. Whilst overall TTS declined year-on-year, the
International business saw growth of 5.8% with strong
performance in the distributor channel. Divisional adjusted
operating profit decreased to £6.0m (FY22: £7.8m) and
adjusted operating margin decreased to 7.9% (FY22: 9.7%)
driven predominantly by lower revenue volumes.
RM Consortium revenues decreased by 42.8% to £19.3m
(FY22: £33.7m) as the business struggled to recover from
the past mismanagement of the IT implementation
programme and challenging education market conditions.
Divisional adjusted operating loss increased to £9.7m (FY22:
loss of £5.0m) and adjusted operating margin decreased to
a loss of 50.3% (FY22: loss of 14.8%) reflecting the lower
revenue performance.
RM Assessment revenues improved by 8.7% to £42.3m
(FY22: £38.9m) driven by contract wins in FY22 and FY23
and a year-on-year increase in marking and test volumes.
Divisional adjusted operating profit increased to £10.3m
(FY22: £7.4m) and adjusted operating margin increased to
24.2% (FY22: 18.9%) driven by increased revenue, improved
efficiency in hosting, and contractor costs linked to data
study contracts in FY22 not repeating.
RM Technology revenues decreased by 5.3% to £57.7m
(FY22: £60.9m) reflecting contract losses in the Service
business in FY22 and the inclusion of £1.3m relating to the
sales of excess IPv4 address in H1 FY22. Subsequent sales
have been classified as other income. Divisional adjusted
operating profit decreased to £0.7m (FY22: £2.2m) and
adjusted operating margin decreased to 1.3% (FY22: 3.6%).
Excluding the £1.3m IPv4 sales, adjusted operating profit
and margin were in line with FY22 reflecting the actions
management have taken to improve the efficiency of the
business in H2 given the lower revenue volumes.
Adjusted loss before tax was £5.2m (FY22: profit of £5.3m),
which was due to higher losses in Consortium and
increased Corporate costs relating to the rebuild of the
management and finance teams.
Statutory loss after tax was £29.5m (FY22: loss of £14.5m),
which was driven by the £10.4m impact from adjusted loss
before tax (see above), a £38.9m impairment relating to the
decision to close the Consortium business, offset by lower
ERP replacement programme and warehouse strategy
costs, a £10.6m gain from the sale of IP addresses (see
adjusting items below), a £13.4m gain on the sale of RM
Integris and RM Finance, and a £1.8m tax charge.
Adjusted diluted loss per share was (15.9)p (FY22: earnings
per share of 4.2p).
RM Consortium closure
On 24 November 2023, the Group announced the decision
to close the RM Consortium business, part of the RM
Resources division, with trading ceasing on 8 December
2023 after which all unfulfilled orders were cancelled.
Following the announcement of the closure of the
Consortium business and the subsequent termination of
the ERP replacement programme, management performed
an impairment review resulting in the Group recognising a
total impairment charge of £38.9m, including £10.6m of
goodwill relating to the RM Consortium business (see Note
13), £17.4m of intangible assets including all remaining
Consortium brand and ERP assets, £5.9m of property, plant
and equipment at the RM Consortium warehouse, £2.8m
of RM Consortium inventory write downs to net realisable
value, £0.7m of other current assets, and an onerous
contract provision of £1.5m in respect of IT licences
associated with the Group’s ERP solution.
2828
RM plc Annual report and financial statements 2023 Strategic report CFO's statement continued
In addition, the previously reported RM Resources segment has
been allocated between the RM TTS segment, which continues
to be operated by the Group, and the RM Consortium segment
which is being closed. Prior year revenue and adjusted operating
profit/(loss) comparatives have been restated accordingly.
The liquidation of RM Consortium inventories continues
and is expected to be completed during the second half of
the 2024 financial year, after which the Group expects to
treat the RM Consortium business as discontinued for
financial reporting purposes.
Adjusting items
To provide an understanding of business performance excluding the effect of significant change programmes and material
transactions, certain costs are identified as ‘adjustments’ to business performance as set out below:
£'m
Amortisation of acquisition-related intangible assets
Impairment of RM Consortium assets1
Restructuring costs2
Configuration of SaaS licences (ERP)3
Independent business review related costs
Dual running costs related to investment strategy
Impairment of ERP solution
Onerous provision for IS licences
Disposal related costs
Total adjustments to administrative expenses
Sale of IP addresses4
Gain on disposal of operations
Gain on sale of property
Total adjustments
Tax impact
Total adjustments after tax – continuing operations
Gain on disposal of discontinued operations5
Total adjustments after tax
FY23
1.7
38.9
2.7
3.1
0.5
-
-
-
-
46.9
(10.6)
(0.2)
-
36.1
(6.0)
30.1
(13.4)
16.7
FY22
1.8
-
0.3
17.4
-
5.4
2.2
1.2
0.8
29.1
(2.8)
-
(0.2)
26.1
(6.5)
19.6
-
19.6
1 Includes £10.6m of goodwill impairment (see Note 13), £17.4m of impairment of other intangible assets, £5.9m of impairment of property, plant
and equipment, £2.8m of inventory write downs, £0.7 write off of other current assets and an onerous contract provision of £1.5m in respect
of IT licences.
2 Restructuring costs of £2.7m of which £0.6m related to the Group’s decision to close the RM Consortium business.
3 The configuration and customisation costs relating to the ERP replacement programme, which have been expensed in accordance with
IAS 38: Intangible Assets and IFRIC agenda decisions but have been treated as adjusting items as they were a significant component of the
Group’s warehouse strategy. These costs total £2.7m (2022: £17.4m) based on the development work undertaken.
4 Income generated following the completion of the sale of IP addresses.
5 During the year Group completed the disposal of the Integris and Finance business which generated a gain on sale of operations of £13.4m.
2929
RM plc Annual report and financial statements 2023 Strategic report CFO's statement continued
Inventory
Inventories decreased by 47.0% to £14.0m (FY22: £26.4m)
primarily as a result of improved working capital management
and the closure of the RM Consortium business.
Corporate Costs
Corporate costs in the period were £7.0m, up from £4.9m
in 2022, as a result of the rebuilding of the management
and finance teams.
Taxation
The total tax charge for the year for continuing operations
was a £2.1m charge (FY22: £4.7m credit). There are multiple
tax effects influencing the tax rate in income, costs, deferred
tax effects and the impact of no tax charge in the discontinued
businesses. These effects are explained in more detail in the
tax note (see Note 10) in the Financial Statements.
Disposals
During the prior year, the Group agreed to sell the RM Integris
and RM Finance businesses from within the RM Technology
Division, completed on 31 May 2023, which generated a net
gain on sale of operations of £13.4m during the year ended
30 November 2023. The performance of these businesses
in both 2023 and 2022 have been classified and presented
as discontinued operations within the Financial Statements. In
the year these businesses generated £2.4m of revenue (FY22:
£4.9m) and £0.8m of adjusted operating profit (FY22: £1.6m).
Cash flow, Net Debt and Lender Agreement
On a statutory basis, net cash outflow from operating
activities was £10.5m (FY22: £20.8m) which included working
capital outflow primarily linked to bringing supplier payments
up to date following cash protection activities ahead of FY22
year end, not repeated ahead of FY23 year end. This includes
£4.5m (FY22: £4.5m) of deficit recovery payments made to
the Group’s defined benefit pension schemes during the year.
Adjusted net debt closed the year at £45.6m (FY22: £46.8m)
as the £10.6m net cash outflow from operating activities
(see above), £5.0m (FY22: £2.3m) of interest paid, £1.7m of facility
arrangement fees and £3.4m of lease repayments were offset
by proceeds from the sale of the RM Integris and RM Finance
businesses (£10.9m) and the sale of IP addresses (£10.7m).
3030
In March 2023, the Group secured an agreement with lenders
to extend the existing £70.0m facility to 5 July 2025, subject
to the addition of a further ‘hard’ liquidity covenant test
requiring the Group to have liquidity greater than £7.5m on
the last business day of the month, and liquidity not be below
£7.5m at the end of two consecutive weeks within a month.
In April 2023, the Group agreed with the Trustee of the RM
and CARE Schemes to provide the Schemes with a second
ranking fixed and floating charge over the shares of all obligor
companies (except for RM plc) and a payment of £0.5m each
at bi-annual intervals starting on August 2023 which is contingent
upon the adjusted debt leverage ratio being lower than 3.2x
at that date. No such payment was made during the year
ended 30 November 2023. See Note 26 for further details.
The business operated within its existing financial covenants
for the first half of 2023 but indicated that a breach was
expected for the facility’s LTM EBITDA covenant from the third
quarter of the year ended 30 November 2023 in its interim
financial statements. EBITDA waivers were granted by lenders
for the August and November 2023 periods and the Group
continues to comply with the conditions of each lender with
regards to any waivers and the respective facility agreement.
At the end of November 2023, the minimum EBITDA covenant
required was £8.6m versus actual EBITDA of £7.0m. In addition,
during November 2023, the soft liquidity covenant limit was
forecasted to be exceeded for the first time, resulting in a
meeting held with lenders under the terms of the facility.
Since the year end, the Group has secured an agreement
with Lenders, which extends the existing £70.0m facility to
July 2026. The fixed charge over the shares of each of the
obligor companies (except for RM plc), and the fixed and
floating charge over all assets of the obligor companies
granted previously to Lenders, remains in place. Under the
amended facility covenants have been reset as follows:
•• A quarterly LTM EBITDA (excluding discontinued operations
& Consortium) covenant test from February 2024 to
November 2025, which is then replaced by a quarterly
EBITDA leverage test and interest cover, which are required
to be below and above 4x respectively from February
2026; and
•• A ‘hard’ liquidity covenant test requiring the Group to have
liquidity greater than £7.5m on the last business day of the
month, and liquidity not be below £7.5m at the end of two
consecutive weeks within a month, with a step-down period
applying from 15 September 2024 to 24 October 2024 and
1 January 2025 to 21 March 2025, during which the minimum
liquidity requirement is reduced from £7.5m to £5.0m.
RM plc Annual report and financial statements 2023 Strategic report CFO's statement continued
Balance Sheet
The Group had net assets of £17.8m at 30 November 2023
(FY22: £60.6m). The balance sheet includes non-current
assets of £81.5m (FY22: £133.3m), of which £38.5m (FY22:
£49.4m) is goodwill and £12.8m (FY22: £24.0m) relates to
the Group’s defined benefit pension scheme which is
discussed further below.
The Directors regularly review the Group’s capital structure
and dividend policy, ahead of announcing results and
during the annual budgeting process, looking at longer-
term sustainability. The Directors do so in the context of
the Company’s ability to execute the strategy and to invest
in opportunities to grow the business and enhance
shareholder value.
Operating PPE, intangible and right-of-use assets total
£27.8m (FY22: £57.8m) and includes acquired brands,
customer relationships and Intellectual property as well as
costs relating to the warehouse consolidation and IT
implementation programme. The reduction during the year
is largely due to the impairment arising from the Group’s
decision to close its loss-making RM Consortium business
in November 2023 including £10.6m in respect of goodwill
(see Note 13), £17.8m in respect of intangible assets and
£5.9m in respect of property, plant, and equipment.
IP Address assets utilised as part of the Connectivity
business are included at £nil cost.
Net current assets of £8.9m (FY22: net current liabilities of
£49.2m) includes borrowings of £nil (FY22: £48.7m)
following their reclassification to non-current liabilities
during the year (see below) and a number of lower
balances predominately resulting from the IT systems
implementation programme and the closure of the RM
Consortium business, including inventory, trade receivables
and trade payables.
Non-current liabilities of £72.6m (FY22: £23.4m) includes
borrowings of £53.7m (FY22: £nil) following the reclassification
from current liabilities during the year (see above) and lease
liabilities of £14.3m (FY22: £16.0m) which is predominately
associated with the Group utilisation of properties.
Dividend
A condition of the previously extended and amended banking
facility agreement remains the same, which was to restrict
dividend distribution until the Company has reduced its net
debt to LTM EBITDA (post IFRS 16, see note 23) leverage to
less than 1x for two consecutive quarters, and therefore we
are not currently able to recommend the payment of a final
dividend. The Board understands the importance of
dividends to our shareholders and are clear that reinstating
the dividend is a key milestone on our recovery path.
RM plc is a non-trading investment holding Company
and derives its profits from dividends paid by subsidiary
companies. The Company has £nil (FY22: £30.8m)
distributable reserves as at 30 November 2023.
The dividend policy is influenced by a number of the
principal risks identified in the table of ‘Principal and
Emerging Risks and Uncertainties’ detailed on pages 38 to 41
which could have a negative impact on the performance of
the Group or its ability to distribute profits.
Pension
The Company operates two defined benefit pension
schemes (“RM Education Scheme” and “Care Scheme”)
and participates in a third, multi-employer, defined benefit
pension scheme (the “Platinum Scheme”). All schemes are
now closed to future accrual of benefits.
As set out in Note 26, the IAS19 net position (pre-tax) across
the Group reduced by £10.2m to a surplus of £12.4m (30
November 2022: £22.6m) with both the RM Education
Scheme and the Platinum Scheme being in surplus. The
reduction has been driven by a decrease in the value of
scheme assets more than offsetting the positive impact
of higher discount rates which are based on corporate
bond yields.
The 31 May 2021 triennial valuation for the current schemes
was completed in 2022, with the total scheme deficit
reducing from £46.5m to £21.6m. The deficit recovery
payments of £4.4m per annum will continue until the end
of 2024, before reducing to £1.2m until the end of 2026
when recovery payments cease.
Internal Controls
During the year, the Group continued to evolve its control
framework following the findings of previous years, with
specific focus on controls considered most important to
reduce the risk of material misstatements in these accounts.
These included supplier statement reconciliations, controls
over revenue recognition and balance sheet reconciliations.
The Audit and Risk Committee is being updated regularly
with respect to progress related to remediation activities as
well as reviewing ongoing control improvements identified.
Because a number of controls are only in place from the
balance sheet date, no reliance has been placed on those
controls for the audit.
3131
RM plc Annual report and financial statements 2023 Strategic report CFO's statement continued
The Committee has assessed that the Group still relies
on controls that require enhanced documentation and
formalisation, and in specific areas, redesign. The control
improvement plan is ongoing, and the Committee is engaged
in ensuring that management have the appropriate resource
and an appropriate remediation timeline.
Management have provided the committee with assurance
that where controls were not designed, implemented or
operating effectively there were appropriate mitigating actions
in place to conclude that the Financial Statements do not
contain material errors.
Going concern
The Financial Statements have been prepared on a going
concern basis which the Directors consider to be appropriate
for the following reasons.
The Directors have prepared cash flow forecasts for the period
to the end of March 2025 which indicate that taking into
account reasonably plausible downsides as discussed below,
the Company is expected to comply with all debt covenants
in place and will have sufficient funds to meet its liabilities
as they fall due for at least 12 months from the date of
this report.
In assessing the going concern position the Directors have
considered the balance sheet position as included on page
142, the headroom to the hard liquidity covenant within the
Banking Agreement, and compliance with the LTM EBITDA
covenant. Exceeding the hard liquidity or the LTM EBITDA
covenant would constitute a material breach of the
agreement and consequently the facility would be
repayable on demand.
As at 30 November 2023, the Group had adjusted net debt
of £45.6m (2022: £46.8m) and drawn facilities of £55.0m
(2022: £49.0m). Average adjusted net debt over the year to
30 November 2023 was £55.9m (2022: £46.8m) with a
maximum borrowings position of £64.8m (2022: £64.1m).
The drawn facilities are expected to fluctuate over the period
considered for going concern, but remain within the covenants,
and are not anticipated to be fully repaid in this period.
Since the year end, the Group has secured an agreement
with Lenders, as detailed on page 30 and in note 31.
The Chief Financial Officer’s statement outlines the
performance of the Group in the year to 30 November 2023.
This statement highlights the material impact of the ongoing
issues within the Consortium brand and underperformance
relative to prior year forecasts in both the RM Technology
and TTS businesses.
For going concern purposes, the Group has assessed a base
case scenario that assumes no significant downturn in UK
or International markets from that experienced in the year
to 30 November 2023 and assumes a broadly similar
macroeconomic environment to that currently
being experienced.
Revenue growth in the base case is driven from the
following key areas:
•• Growth from existing customers and new customer wins
in the Assessment division;
•• Increased hardware and infrastructure revenues in the
Technology division, including further wins under the UK
government’s Connect the Classroom programme; and
•• Growth from UK sales and international partnerships,
where the base case assumes an increase in market
share through customer wins and new product launches
as well as higher average order values, in the
Resources business.
Operating profit margin growth in the base case includes,
in addition to the revenue assumptions outlined above,
annualised savings benefit from restructuring programmes
commenced in the year to 30 November 2023. As the
target operating model changes did not commence until
2024 the impact of these changes are not captured in the
base case, rather these are incorporated as an upside in the
reasonable worst-case scenario. Net debt is not expected
to reduce within the assessment period, as the conversion
of profits will be offset by further capital investment, interest
and pension payments.
3232
RM plc Annual report and financial statements 2023 Strategic report CFO's statement continued
As part of the Group’s business planning process, the Board
has closely monitored the Group’s financial forecasts, key
uncertainties, and sensitivities. As part of this exercise, the
Board has reviewed a number of scenarios, including the
base case and reasonable worst case downside scenarios.
The aggregate impact of reasonably plausible downsides
has been taken together to form a reasonable worst-case
scenario that removes a number of the growth
assumptions from the base case including:
•• In the Assessment division, a reduction in revenue
arising because of:
o A faster runoff of one key contract which has not
been renewed;
o New contract wins not at preferred bidder status
reduced by 50%; and
o One-off revenues associated with changing terms
on a large multi-year contract delayed to FY25.
•• In the Technology division: aligning forecast hardware
sales with the average of the last five years, rather than
the future growth assumed in the base case, and
reducing contract renewal rates by 5%.
•• In the Resources division:
o UK market share growth does not occur, market
continues to decline and revenues delivered by new
products are reduced by 50%;
o No growth in international revenues; and
o Increases in costs associated with new product
development, carriage, and an inability to pass on
1.5% of inflationary increases.
The reasonable worst downside case scenarios have the
following impact on the base case budget:
•• 2024: A revenue reduction of £31.2m, an EBITDA
reduction of £8.2m, and cash reduction of £7.5m.
•• 2025: A revenue reduction of £41.5m, an EBITDA
reduction of £8.4m, and cash reduction of £6.0m.
stress testing that demonstrates that even if no sales are
made by the TTS business in the month of May 2024, the
covenants would still be complied with for that quarter.
The Board has also considered a number of mitigating actions
which could be enacted, if necessary, to ensure that reasonable
headroom against the facility is maintained in reasonable
worst cases and the Group complies with covenants. These
mitigating actions include not paying discretionary bonuses,
the sale of further IP licences, and extending payment terms
with key suppliers, albeit at a much lower level for the latter
than were taken in FY23. These are actions that the Group
has taken before and therefore the Board are confident of
their ability to deliver these mitigating actions if required.
Further actions could include reduction in capital expenditure
and delaying recruitment. These actions are expected to
have little to no implications to the ongoing business in
the going concern period.
Therefore, the Board has a reasonable expectation that the
Company has adequate resources to continue in operational
existence and meet its liabilities as they fall due for a period
of not less than 12 months from the date of approval of
these Financial Statements, having considered both the
availability of financial facilities and the forecast liquidity and
expected future covenant compliance. For this reason, the
Company continues to adopt the going concern basis of
accounting in preparing the annual Financial Statements.
Principal risks and uncertainties
Pursuant to the requirements of the Disclosure and
Transparency Rules, the Group provides the following
information on its principal risks and uncertainties. The
Group considers strategic, operational and financial risks
and identifies actions to mitigate those risks. Risk management
systems are monitored on an ongoing basis. The principal
risks and uncertainties are set out on pages 38 to 41.
While the Board believes that all reasonable worst case
downside scenarios occurring together is highly unlikely,
the Group would continue to comply with covenants under
the facility, albeit in February 2025 there would be no
headroom on the LTM EBITDA covenant, and in December
2024 limited headroom on the hard liquidity covenant. The
Board’s assessment of the likelihood of a further downside
scenario is remote. Management have undertaken reverse
Simon Goodwin
Chief Financial Officer
14 March 2024
3333
RM plc Annual report and financial statements 2023
Strategic report
Financial viability report
The Directors’ assessment of the Group’s current financial
position is set out in the Chief Financial Officer’s review on
pages 26 to 33.
In accordance with the UK Corporate Governance Code, in
addition to an assessment of going concern, the Directors
have also considered the prospects of the Group and the
Company over a longer period.
The principal operating subsidiaries of the Group are RM
Educational Resources Limited (the primary subsidiary
through which our Resources Division operates) and RM
Education Limited (the primary subsidiary through which
our Technology and Assessment Divisions operate). The
current performance of these Divisions is set out in Note 4
of the Financial Statements.
Our debt facilities are set out in Note 23. Our Group Treasury
team actively manage the cash flow and funding requirements
of the Group over the financial viability timeframe. Our
current utilisation of our funding facility is summarised in
our going concern review on pages 32 to 33. The bank
facility was recently extended and is committed until
July 2026.
Following a forecast potential breach of covenants in the
second half of 2023, neogtiations commenced and the
bank facility was recently extended and is committed until
July 2026.
We have an established process to assess the Group’s
prospects. The Board undertakes a detailed assessment
of the Group’s strategy on a regular basis (usually annually)
and the output from this assessment forms the framework
for our medium-term plan which we update annually.
Our medium-term plan comprises cash flows, income
statements and balance sheets.
Our medium-term plan reflects our prospects and
considers the potential impacts of the Principal Risks and
uncertainties set out on pages 38 to 41. We perform stress
tests to assess the potential impact of combinations of
those risks and uncertainties. The plan also considers
mitigating actions that we may take to reduce the impact
of such risks and uncertainties, and the likely effectiveness
of those mitigating actions.
Period of assessment
The viability statement covers the period to the end of the
current banking facilities in July 2026, as any period beyond
this would likely be subject to negotiation and agreement of a
further facility which is not within the Group's direct control.
The Directors have considered a period of three years for
assessing financial scenarios. This longer period of
assessment is considered appropriate for a number of
reasons. The Group operates in the education sector,
providing a range of technological solutions and services to
our customers both in the UK and Internationally. While in
the longer term the changing nature of technology,
government policies and digitalisation will impact the
market in which RM plc Group operates, changes in the
shorter three-year timespan are likely to be less severe.
A three-year assessment period is also consistent with the
time period over which the Group’s medium-term financial
budgets are prepared. A longer period of assessment
introduces greater market uncertainty and hence
uncertainty in the viability assessment because the
variability of potential outcomes increases as the periods
considered extends.
Viability assessment
The Group has considered the scenarios for financial viability
disclosed in the table on page 35.
The impact of these scenarios were considered individually
and in combination. Where the timing is unknown, the
scenario was assumed to have occurred in FY24 when
the Group sensitivity is greatest.
While the Board believes that all reasonable worst case
downside scenarios occurring together is highly unlikely,
under these combined scenarios and if management took
no mitigating action in response, the Group would breach
the interest cover and adjusted leverage covenants for the
quarter ended 28 February 2026, but would not have any
other breaches within the assessment window.
The Board has also considered a number of mitigating
actions which could be enacted, if necessary, to ensure
that reasonable headroom against the facility is maintained
in all cases and the Group complies with covenants.
3434
RM plc Annual report and financial statements 2023 Strategic report Financial viability report continued
Principal risk
Scenario considered
Cyber attack
Scenarios considering disruption to the TTS sales website, schools and significant
Assessment platforms were considered. The cyber team use a collection of cutting-edge
tools to test systems and protect against attack, and use external experts to test and improve
security posture.
Failed implementation
of customer services or
business transformation
projects
Treasury risks
Scenarios across all divisions were considered where target operating model benefits were
delayed or not delivered.
In RM Assessment, scenarios were considered where significant new and pipeline deals were
delayed or not delivered.
Scenarios involving exchange rate risk in the Resources and Assessment divisions, and
interest rate and liquidity management risks relating to the banking facility were considered.
Dependency on
extensive supply chain
In RM Resources and RM Technology, scenarios were considered where unforeseen increases in
product cost and carriage cost inflation were absorbed.
Non-compliance with
legal or regulatory
obligations
Scenarios involving a potential GDPR breach, and non-compliance with foreign taxation
regimes through increased import and export activity in Resources (driven by International
revenue growth) were considered.
Winning and extension
of long-term contracts
in Assessment and
Technology
The impacts of a material reduction in the medium-term growth rates were modelled as
follows:
•• RM Technology – a 25% reduction in hardware and digital platform growth in FY24, and a
50% reduction in FY25 and FY26
•• RM Assessment – a 50% reduction in new contract revenue growth where RM is not at
preferred bidder status for FY24
These mitigating actions are expected to have little to no
implication to the ongoing business in the viability period
assessed, and include:
•• Cost mitigations (such as reduced uncommitted spend)
•• Non-payment of discretionary bonuses
•• No reinstatement of dividend payments in the
assessment timeframe
•• Further sales of internet protocol v4 (IPv4) addresses
On this basis, the stress tests indicated that none of these
scenarios, including the combined scenario, would result in
an impact to the Group’s expected liquidity, solvency or
debt covenants that could not be addressed by mitigating
actions and are therefore not considered threats to the
Group’s viability.
The Board continue to consider strategic options to
deleverage the Group's borrowings over the short term.
Governance and assurance
The Board reviews and approves the medium-term plan on
which this Viability Statement is based. The Board also considers
the period of which it should make its assessment of prospects
and the Viability Statement. The Audit & Risk Committee supports
the Board in performing this review. Details of the Audit & Risk
Committee’s activity in relation to the Viability Statement are set
out in the Audit & Risk Committee Report on pages 88 to 95.
Assessment of viability
The Board has assessed the viability of the Company until the
end of the current banking facility in July 2026, taking into
account the Company’s current position and Principal Risks.
Based on that assessment, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period
to July 2026.
3535
RM plc Annual report and financial statements 2023 Strategic report
Managing the Group’s risks
The management of the business and the execution of the
Company’s strategy are subject to a wide range of risks.
Risk management framework
RM plc (RM) has a defined and documented risk
management framework which is aligned to best practice
and subject to continual improvement.
The framework is overseen by the Board and reviewed by
the Audit and Risk Committee at least once a year and
when there are significant changes affecting RM’s risk
profile. A key objective is to ensure a level of consistency
and rigour appropriate to its business strategy and
operations.
In addition, RM has procedures in place to ensure that
principal risks and emerging threats that may impact the
business in the longer term are identified, evaluated and
managed at the appropriate level within the organisation.
Risk registers are produced by each division and line
function (e.g. HR, finance, legal) and key risks from these
are compiled in the Group Risk Register. Risks are identified
and scored in terms of impact and likelihood, after taking
into account the current controls. For those risks that are
not accepted, a risk action plan is completed with a target
planned net risk score. Risk owners are nominated who
have authority and responsibility for assessing and
managing these risks. While RM’s risk management
framework is designed to reduce risk as far as possible, the
Company cannot eliminate all risks.
Exec/Board
Board Audit & Risk Committee
Group Risk Register
Group Risk & Compliance Committee
•• Chaired by CFO
•• Strategy, risk appetite, etc.
•• Ownership of Group Risk Register
CEO/Exec Review
Monthly Risk Reviews
•• New risks, updates on mitigation, etc
•• Updated Group Risk Register
•• Risk Report
IS
Legal/Data
Protection
Finance
HR
Technology
Assessment
RM Resources
RM India
Group Security
IS
Sustainability
HR
H&S/Facilities
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RM plc Annual report and financial statements 2023
Strategic report Managing the group's risks continued
Emerging risks
Risks can cover a variety of categories including: financial,
infrastructure and technology, legal, operational, political,
reputational, security, strategic and emerging.
Emerging risks are potential new risks that cannot (yet) be
scored, because currently there is insufficient information
available about their likelihood and/or impact. These may
relate to political, economic or technology changes and
trends.
In addition to identifying, evaluating and mitigating the
principal risks that might impact the range of Group
activities, the risk management programme also identifies
emerging risks. These are potential new risks that cannot
(yet) be scored, because currently there is insufficient
information available about their likelihood and/or impact.
Emerging risks that might affect RM during 2024 can be
summarised as follows:
Artificial Intelligence (AI)
•• The rapid emergence of AI technologies is likely to have
a significant impact on education and assessment
markets. RM will need to closely monitor market and
industry trends to identify both risks and opportunities. AI
is also likely to have an impact on internal functions such
as Finance and HR.
Legislative change
•• With a General Election probable within the next year,
legislation change in areas relevant to RM’s business is
likely. Such areas might include education, employment,
health & safety, climate change, and data protection. RM
will need to evaluate the possible impact of the
legislative agenda of any incoming government.
Market changes
•• The outcome of the General Election could also result in
changes to the level and focus of government funding in
the education sector. Such potential changes and related
policies might lead to new revenue opportunities as well
as new risks for RM.
All emerging risks are kept under review by the Executive
and the Board. As further information and analysis becomes
available, it may become possible to evaluate and score
risks using the Group Risk Framework, with the result that
some may become Principal Risks, or in some cases, an
emerging risk may diminish in significance.
A systematic risk review is conducted, at least quarterly.
Each new version of the Group Risk Register is evaluated by
Executive Directors, Company Secretary, and the Head of
Legal, as well as the Group Risk & Compliance Committee.
The Board reviews the principal and emerging risks faced by
the Group and approves the Group Risk Register at least
twice a year. The Board considers trends, opportunities and
challenges facing the business along with its emerging risks.
Additionally, the Board continues to focus on key areas that
are closely linked to the Group’s strategic priorities, including
RM’s proposition to meet and exceed clients’ expectations
and supporting its people.
Risk appetite
RM has zero tolerance for risks which:
•• harm its employees, customers, learners or the general
public;
•• create significant, unmanaged, adverse, reputational
damage;
•• lead to the loss of any application or IT service deemed
critical for RM customers or internal users or the loss of
any service beyond the ascertained maximum
acceptable outage; or
•• would cause any failure to comply with legal and
regulatory requirements.
In other aspects, such as revenue growth initiatives, the
Board may have a greater risk appetite and sets the level of
mitigation accordingly.
The Board confirms that it has carried out a robust
assessment of the principal and emerging risks faced by the
Group and appropriate processes have been put in place to
monitor and mitigate them. Further details are also set out
in the Corporate Governance Report.
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RM plc Annual report and financial statements 2023 Strategic report
Principal risks and uncertainties
Link to strategic objectives
Year-on-year trend
Increasing risk
Decreasing risk
Unchanged from previous year
Reach more customers
Improve share of customer spend
Operational excellence
Attract & retain talent
Strong financial discipline
Potential
impacts
Current mitigation
Planned mitigation
Trend
1. A range of factors such as adverse market conditions, operational failures, not winning new
business, or a lack of investment in our digital capability, could cause a failure to deliver
the new strategic programme unveiled in FY2024 to deliver revenue growth, a return to
profitability and a reduction in debt (please read our CEO's Statement on pages 10 to 16).
A reduction in
earnings that could
put pressure on
the Group’s ability
to stay within
its banking
covenants.
•• A new senior management team established
•• Further investment in technology and RM
with turnaround experience.
developed IP.
•• Creating a simplified and more streamlined
operating model.
•• Focus on high growth and strategic parts of the
group, such as the Assessment business.
•• Securing long-term customer contracts.
•• Agreement with lenders to support turnaround.
NEW
RISK
2. The Group’s ability to trade may be compromised should there be a lack of cash funds.
Lack of funding
required to meet
short and long-
term obligations
and aspirations.
•• The Group’s liquidity continued to be impacted
by the IT implementation in Consortium which
caused business disruption and led, in part, to the
decision to cease trading in the Consortium brand.
•• As a result, additional liquidity and covenant
monitoring and forecasting has been
implemented by management and is regularly
reviewed by the Board.
•• The Company amended and extended its
£70m bank facility in March 2024 with revised
covenants to better reflect the outlook and
liquidity needs.
•• During the year the sale of the RM Integris
and RM Finance businesses also concluded,
generating proceeds of £10.9m after associated
costs. Additionally, a further £10.6m of proceeds
were generated from the sale of surplus IPv4
addresses.
•• The Group’s liquidity continues to be a key area
of focus and, as stated in post-balance sheet
events on page 213, the Group has successfully
negotiated a further amendment and extension
to its funding facilities with its lenders. Regular
liquidity and covenant monitoring and
forecasting will be undertaken by management,
and reviewed by the Board, to ensure ongoing
compliance with this arrangement.
•• The Group continues to regularly monitor treasury
risks such as fluctuating exchange rates by creating
natural currency hedges through matching of
foreign currency receipt and payment phasing,
with hedging via derivative instruments utilised for
material imbalances that remain.
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RM plc Annual report and financial statements 2023 Strategic report Principal risks and uncertainties continued
Potential
impacts
Current mitigation
Planned mitigation
Trend
3. If RM’s security controls are inadequate then a cyber attack on internal or customer-facing
systems might be successful.
Disruption
to services;
personal data
breach; legal and
contractual non-
compliance.
•• Wide range of industry-standard technical
•• Expansion of controls testing across key
defences and controls, including penetration
testing and vulnerability scanning.
systems and applications.
•• Investment in MDR (Managed Detection &
•• Security monitoring and risks assessment of key
Response) service.
systems and suppliers.
•• Dedicated security team.
•• New Cyber Security lead joining in 2024.
•• New Phishing Training via Proofpoint to be
•• Dedicated data protection function.
rolled out across organisation.
•• Incident response function, supported by third-
party specialist services.
•• ISO 27001 and ISO 22301 certifications.
•• Oversight by Group Security & Business
Continuity Committee, which reports into the
Group Executive.
•• External audit of systems, processes,
compliance, etc.
•• Cyber insurance and property and business
interruption insurance cover.
4. If RM fails to maintain the required levels of technical and delivery expertise, then the
implementation of sophisticated and complex services to customers, or large-scale
business transformation projects, could be threatened.
Operation
disruption;
reputational
damage;
contractual
non-compliance
which could
have financial
implications.
•• Investment in people with technical expertise
(see Risk 6 below).
•• Internal management control processes, e.g.
programme steering committees, change
boards, etc.
•• Programme and project reviews.
•• Monitoring of operational and financial
performance by management and Board.
•• Strengthened both the architecture and data
teams to reduce risk for current and ongoing
technical debt projects.
•• Implementation of common Project
Management approach across the
organisation to reduce likelihood of poor
delivery and operational disruption.
•• Process documentation programme to
underpin business continuity controls.
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RM plc Annual report and financial statements 2023 Strategic report Principal risks and uncertainties continued
Potential impacts
Current mitigation
Planned mitigation
Trend
5. Due to RM’s dependency on an extensive supply chain, including overseas providers, delivery of
products and services could be affected by political, economic and global factors beyond its control.
Increased costs; disruption of
services.
•• Changes resulting from Brexit
have been managed through the
adoption of new processes to meet
the new requirements.
•• During the year a new Group
Head of Procurement has been
appointed, who is focusing on
streamlining the supplier database
in order to minimise risk and
exposure.
•• The Group continues to be reliant
on the cross-border movement
of goods, which have been
affected by both evolving Brexit
requirements and inflation.
•• While the decision to cease
trading in the Consortium brand is
expected to reduce this exposure
for purchases, the growth of TTS
International means that the Group
continues to focus significant
effort in ensuring compliance with
the various regulations relating
to import and export of goods,
including the appointment of a
Head of International Operations.
6. A failure to recruit, retain and protect highly skilled employees could have a range of negative
operational impacts.
High levels of workforce attrition;
increased recruitment and
retention costs; financial penalties.
•• Identification of critical resources.
•• Talent management and career
•• Knowledge management capture
project.
planning processes.
•• Succession Planning.
•• Regular monitoring of employee
•• Learning & development strategy
engagement.
and plan for FY24.
•• Equity, Diversity and Inclusion
•• Employee health, safety, and
network.
wellbeing plan for FY24.
•• Recruitment strategy to target
•• Line Management development.
problem areas.
•• Annual benchmarking of
remuneration to ensure we remain
market competitive.
•• Training programmes to assist staff
development.
•• Disruptive hiring strategy.
7. If the Group does not have adequate monitoring and compliance processes in place, there is
a risk that we could become non-compliant with one or more of the many legal and regulatory
obligations to which we are subject.
Regulatory fines; reputational
damage.
•• Legal team evaluate and
•• Additional resourcing for legal and
communicate legal requirements
to relevant teams.
•• Access to third-party expertise,
e.g. non-UK legal requirements.
•• Dedicated compliance managers.
•• Internal audit.
compliance functions.
•• Additional and updated policies and
procedures are being rolled out.
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RM plc Annual report and financial statements 2023 Strategic report Principal risks and uncertainties continued
Potential impacts
Current mitigation
Planned mitigation
Trend
8. Since the financial performance of the Assessment and Technology divisions is dependent on the
winning and extension of long-term contracts, a failure to invest in developing innovative and
industry-leading solutions to enhance our service offering, could weaken our competitiveness.
Customer dissatisfaction;
loss of revenue.
•• Investment in maintaining a high level of
technical and non-technical expertise and in
building effective working relationships with
its customers.
•• Five-year plan of investment, totalling £25
million, in Assessment solutions, including
for learners, as well as awarding bodies and
professional organisations.
•• Product and service innovation programmes.
•• New Target Operating Model with the
aim of having a more customer centric
business.
•• Investment in technical leadership
and delivery roles in the UK, covering
Architecture, Software Engineering & Ops
and Portfolio Management areas.
•• Investment in Delivery Director roles in
India, taking responsibility for the build and
technical operation for our services.
•• Centres of excellence focused on
Architecture, Software Engineering and
Quality Assurance.
•• Recruitment of specialist roles to support
large new contracts.
9. Pension scheme deficits could adversely affect the net assets position of the trading subsidiaries
RM Education Limited and RM Educational Resources Limited, as could increased costs resulting
from the transfer of staff from Local Authority pension schemes.
Lack of funding required
to meet short and long-
term obligations and
aspirations.
•• The Group evaluates risk mitigation proposals
with the trustees of these respective Schemes.
•• The Platinum Scheme is a multi-employer
scheme over which the Group has no direct
control. However, due to the small (and
reducing) number of the Company’s former
employees who are in this Scheme, the risk to
the Company from this Scheme is limited.
•• The Group assesses the potential pension
costs of staff from other employers, who
would transfer across to the Group, and takes
this into account in its bids for new contracts.
•• The Group continues to fund the schemes
such that they meet or exceed funding levels
on scheme funding, long-term funding target
and contingent contributions (gilts + 0.3%)
bases.
•• The Group continues to utilise a consolidated
trustee for the two largest defined benefit
schemes (the RM and CARE schemes), and
a single advisor to appropriately manage
assumptions set by the scheme actuaries.
•• Contributions have been set by the latest
triennial funding valuations from 31 May
2021 for the RM and CARE schemes, and 31
December 2021 for the Platinum scheme. The
Group has incorporated these contributions
into its long-range forecasts, and considers
risk relating to increased contributions set by
the valuations to take place in 2024 through its
downside scenario analysis as part of the going
concern assessment.
•• The Group will continue to explore possibilities
to further de-risk the schemes by moving to a
full buy-out, should sufficient funds be available.
10. The macroeconomic environment which has included high inflation in recent times could impact
profitability due to higher costs and constraints on spending by schools and education bodies.
Failure to deliver forecast
performance due to
higher costs and/or
lower revenue reducing
profitability.
•• Margin rebuild across customers including
•• Focus on securing long-term agreements
inflation indexing has been built into
contracts.
•• Using of dynamic pricing in TTS.
•• Procurement initiatives and targets to
achieve cost savings for specific categories
of spend.
and partnerships with key customers within
the Assessment business; focus on winning
managed services work within Technology
to provide more recurring revenue.
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RM plc Annual report and financial statements 2023 Strategic report
Sustainability report
At RM plc, we believe that being a responsible business is synonymous with being the purpose-led business we are, and
sustainability is essential to our customers, employees, and our business. Our sustainability objectives are aligned to the
UN sustainable development goals and the Paris Agreement.
Figure 1: RM Sustainable Business Priorities
Environment & climate
Employees
Social value
Reducing
our Carbon
Emissions
Waste and
the Circular
Economy
Employee
Health, Safety
and Wellbeing
Building a diverse,
inclusive and
equal workplace
Enriching
the Lives of
Learners
Supporting our
communities
Sustainability Report on page 42
Workforce on page 59
Social Value on page 58
Below we set out:
•• The Governance of Sustainability (page 43)
•• Our sustainability strategy and Environmental
•• A review of FY23 progress and agreement of our
priorities for FY24 by the ESG committee. Full details of
our progress in 2023 and our priorities for 2024 can be
found on pages 46 and 47.
Improvement Programme (page 45)
•• The appointment of Jamie Murray Wells as Chair of the
•• Task Force on Climate-related Financial Disclosures
(TCFD) reporting, including Environment Metrics
(see page 48)
•• Climate-related financial disclosures (CFD) (page 50)
•• Social Impact (page 58).
Governance of sustainability & climate-related
matters
Governance is an important aspect of making sure RM is
focussing on material risks and opportunities and is
delivering against a sustainability & climate-related matters
action plan. It also ensures that our sustainability & climate
priorities align with RM’s Strategy and reflect the needs of
all our stakeholders.
RM continues to ensure strong governance of sustainability
& climate change through:
•• Regular updates to the Board ESG Committee,
consisting of all Non-Executive Directors, responsible for
strategic oversight, monitoring and reporting. Overall
responsibility for ESG continues to sit with the Board.
4242
ESG Committee from November 2023.
•• Our divisional Sustainability Working Groups and a
Sustainability Governance Panel provide structure to
guide and execute on sustainability plans.
•• The delivery of ESG agenda across RM by the Head of
Sustainability who is responsible for RM's approach towards
governance of sustainability and climate related matters. The
role is also responsible for ensuring compliance with all
environmental, climate change and applicable ESG
legislation.
•• The financial materiality of environmental and climate
changes being assessed by RM and set at £250,000.
During FY24 all principal and emerging risks will be
assessed to understand their materiality to RM, this will
be reported in the FY24 annual report. A representative
from Finance will be nominated to the Sustainable
Development Governance Panel in FY24 to ensure that
financial materially is under constant review.
RM plc Annual report and financial statements 2023 Strategic report Sustainability report continued
Figure 2: Approach to governance of sustainability & climate
RM Plc Board
Responsible for approval of ESG Strategy and overarching decision making.
Receives reports on ESG from the Board Committee.
e
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a
n
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Board Audit and Risk Committee
Board ESG Committee
Climate-related Risks are added to the Group Risk
register and reviewed by the Audit and Risk
Committee alongside the wider risk landscape.
Climate change is included in the Group risk
register.
Meets once a year for strategic oversight of ESG
topics, including TCFD, measures and integration
across other Board priorities. Includes alignment
with Audit and Risk Committee and broader
strategic alignment with the Board. Responsible
for monitoring progress and making
recommendations to the Board where it believes
action or improvement is required.
Executive Committee
Executive level sponsorship and twice annual Executive Committee review of ESG plans, TCFD, metrics,
progress, and strategy alignment across RM Plc. Review of Risks across the Group. Data is reported at
least annually, but quarterly or monthly where the data source supports greater frequency. FY24 will see
the Executive Committee provided with MI on the current carbon emissions per quarter split by each
division. The Chief Executive reviews and approves the Carbon Management plan annually.
Sustainable Development Governance Panel
Leaders from each division and function, chaired by Head of Sustainability and sponsored by Executive
Sponsor for Sustainability. Responsible for co-ordination of group-wide activities, reviewing progress and
identified issues, risks, and blockers. The panel is present with an update on the status of carbon
emissions since its last meeting. The panel reviews all working group projects to ensure they are aligned
to supporting RMs carbon reduction commitment. Risk review is incorporated into Group-wide Risk
Management approach and reported to Executive Committee and Board ESG Committee.
Divisional Sustainable Development Working Groups
Representatives from each Division and Function. Responsible for leading sustainability-related work in
each team and executing on the plans and priorities for each division or function relating to Group ESG
Strategy and compliance as well as ensuring that RM remains focused on delivering its carbon reduction
targets. The groups also identify risks and opportunities presented by climate change and communicate
these to the Sustainable Governance Panel.
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RM plc Annual report and financial statements 2023
Strategic report Sustainability report continued
The Head of Sustainability is responsible for the day-to-day
management of ISO 14001 and for monitoring and escalating
climate-related risks and disclosures via the Sustainable
Development Governance Panel, Executive Sponsor, and
the Board ESG Committee. All risk relating to climate
change and sustainability are captured in the local and
group risk registers.
Certain risks are principally identified and mitigated at a group
level where they affect the overall group, such as those
relating to real estate. All risks identified at the divisional
level are recorded in the ISO 14001 risk registers for each
working group. Significant risks and those requiring group
mitigation or input are escalated and recorded in the group
risk register. Both registers are reviewed monthly.
All principal and emerging risks including climate change risks
are reviewed monthly by the Chief Executive Officer and
Chief Financial Officer, and quarterly by the Audit and Risk
committee as part of the Company’s risk management
process and any material financial implications and
potential impact on RM’s accounts are shared with the Audit
Committee. RM considers climate change to be a longer-
term emerging risk (beyond 2024-2026) and the level
remains unchanged from the FY22 annual report.
The Executive Committee is updated at least annually by
the Head of Sustainability. The review looks at the progress
of the priorities for the year, highlights any significant risks
or opportunities to RM and reviews the volume of carbon
output throughout the period. The information is used to
ensure that RM continues to deliver its ESG & Climate goals
and aligned to and support the business strategy.
Climate risks and opportunities are principally identified via
the divisional working groups and the Head of Sustainability.
The risks and opportunities presented by climate change to
each divisions operations, customers and supply chain vary
considerably. Due to this it would not be effective to have a
high-level identification of climate change risks.
All identified and any newly identified risks by the working
groups in combination with the Head of Sustainability are
integrated into the ISO 14001 risk registers. These registers
mirror the format of the group risk registers. If a risk is above
the divisional acceptance level then the risk is added to the
group risk registers. The risk assessment process at the
divisional and group level is consistent, risks are assessed
for likelihood and impact, the risk score then determines
the response at each level. Every risk, including accepted
risks have a risk action plan with a target completion date.
Data is currently collected annually. During 2024, where
possible, all data is going to be collected on a monthly
basis. This change will enable RM to closely monitor its
progress and undertake corrective actions, if required, to
ensure we continue to deliver the carbon reduction to
enable RM to meet Net Zero on Scope 1 and 2 by 2035.
Sustainability and climate improvement
Improving RM's sustainability & climate performance is
now well embedded throughout RM, from our divisional
employee led ISO 14001 working groups to the ESG
Committee of the Board, sustainability is not seen as a 'nice
to have' but is recognised as a business-critical activity.
During 2023, RM has continued to strengthen its focus on
climate-related measures to work towards its Net Zero on
scope 1 and 2 by 2035. This focus has led to a 25%
reduction from FY23 carbon emissions, including reductions
in key scope 3 areas such as air travel. Other measures and
achievements include;
•• Roll out to Group and RM Technology suppliers of our
Sustainable Suppliers Charter
•• Held sustainability workshops with key suppliers
•• Participated in customer sustainability workshops
•• Undertook pilots to test systems and tools for supply
chain emissions capture and reporting
•• Signed Renewable Energy Guarantees of Origin (REGO)
to back renewable energy contract for all RM controlled sites
•• Undertook pilot projects to implement circular economy
into own-IP products.
The measures and achievements outlined above enable RM to
build from a position of strength going forward into FY24.
4444
RM plc Annual report and financial statements 2023
Strategic report Sustainability report continued
Environmental improvement programme
We used the UN Sustainable Development Goals (see Figure 3) as part of the development of our Sustainability strategy and
used this alongside the key environmental and climate change risks and opportunities to develop our corporate and
divisional environmental improvement programme (see Figure 4).
Figure 3: UN Sustainable Development Goals for Environment
•• Remove
hazardous
content in
products.
•• Prevent leakage
and spillage of
substances.
•• Energy
efficiency.
•• Renewable
energy.
•• Renewable
energy
purchasing.
•• Reduce material
consumption.
•• Reuse, re-
manufacture
or recover
products and
materials.
•• Achieve Net
Zero Carbon.
•• Plan for climate
resilience.
•• Eradicate single-
•• Sustainable
use plastic.
•• Buy ocean-
bound plastics
and bio- and
recycled
plastics.
products and
materials.
•• Support
reforestation
and biodiversity.
During 2023, a full review of the environmental commitments
was undertaken with key internal stakeholders. The outcome of
this review has enabled RM to confirm its focus on these areas.
•• Net Zero Carbon – Achieving RM's stated commitment
in its carbon management plan of achieving Net Zero on
scopes 1 and 2 by 2035 and all scopes by 2050. RM defines
Net Zero Carbon as completely negating the amount of
greenhouse gases produced by RMs business activities.
This will be achieved by a combination of reducing emissions
and implementing methods of absorbing carbon dioxide
from the atmosphere, where carbon emissions are
unavoidable by the target completion dates.
•• Waste reduction and circular economy – Reduction
of up and down stream waste and implementation of
circular economy principles into our value chain.
•• Partnerships – RM to support and foster collaboration
between our partners, suppliers, and customers to enable
the improvement of environmental performance for all
our stakeholders.
•• Sustainable – We will aim to partner with landlords who
prioritise sustainable practices and have green building
certification as part of our selection criteria to align with
our ESG Strategy (such as our Headquarters in Abingdon
which is a Building Research Establishment
Environmental Assessment Method (BREEAM) building).
When creating future workplaces, we will incorporate
green building principles leading to long-term energy
and resource savings. Features such as efficient
insulation, natural lighting, renewable energy sources,
and water-saving fixtures contribute to a sustainable
workplace environment.
Progress against the improvement areas is the primary
responsibility of the Divisional Working Groups and Head of
Sustainability. Updates throughout the year are provided to
the Sustainable Development Governance Panel's ongoing
environmental management system. The ESG committee is
updated at least annually.
Figure 4: summarises the commitments we have made in each of these areas
Net Zero Carbon
1. Net zero scope 1 and 2 and
scope 3 before 2050
2. Measure and set targets for
scope 3 and provide customers
with scope 3 data
3. Source renewable energy
Waste reduction and the
circular economy
4. Zero to landfill by 2030
5. Eliminate non-recycled plastic
content in new RM Resources IP
products by 2024
6. Reduce waste from packaging
Partnerships
7. Develop new labelling for
RM Resources’ branded Eco
products
8. Run workshops with key
customers and suppliers
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RM plc Annual report and financial statements 2023 Strategic report Sustainability report continued
Green Completed or moved to ongoing execution with no significant risks
Amber Work in Progress with significant work remaining or risks identified
Red
Delayed or substantial risks to progress/completion identified
Review of progress against environmental commitments
Net Zero Carbon:
RM has made significant progress during FY23 in reducing its carbon emissions, particularly in scope 1. This has led
to an overall reduction of 25% compared to FY22. RM's focus throughout FY24 will be capturing its scope 3
emissions to enable their materially to be understood and enable the creation of scope 3 reduction plans and
targets. A continuous focus through the implementation of combined sustainability and real estate strategies
will enable RM to benefit from reductions in utilities and fuel consumption. RM will be seeking the best
options to support the transition to electric vehicles throughout 2024.
Throughout 2023 RM has piloted the systems and processes for the capture, measurement and verification
of its scope 3 emissions. Given the variety of its supply chain, RM will aim to disclose all relevant and material
scope 3 categories by 2026, but will ensure where data is available, reliable, and accurate, disclosures will be
made as soon as available.
It is currently predicted that the full scope of RMs supply chain emission will not be reported before 2026.
From FY24 all data relating to category 1 of scope 3 supply chain emission will be reported. Throughout FY23
RM has, when requested, supplied any carbon data to our customers or suppliers. A project is underway
to enable RM to estimate the carbon impact of our products and services to enable our customers to
understand the environmental impact of our service delivery.
In September 2023 RM signed a REGO backed electricity contract for our two distribution centres and office in
Glasgow. Our Abingdon office consumption is supported by onsite solar generation. During 2024 and in line
with our Real Estate Strategy and Energy Saving Opportunities Scheme (ESOS) reporting, RM will review further
deployment of onsite renewable energy generation including the scope for renewable heat generation.
Waste reduction and the circular economy:
Throughout 2023 for our Abingdon, Harrier Park and Sherwood Park locations, RM continued to achieve
zero to landfill through a programme of well supported recycling initiatives and the remainder of the waste
from these locations going to waste-to-energy facilities. RM is seeking to work with our waste contractors to
further increase on and off site recycling.
2023 has seen the development of a circular economy project with 2nd Chance, a not for profit organisation
that use donated IT equipment to provide IT and coding skills to disabled and disadvantaged children and
young adults. This is expected to reduce RM's Waste Electrical and Electronic Equipment (WEEE) waste by a
quarter of a ton per annum. Further detail of this project is included in the social value section of the annual
report on page 58.
During 2024 RM will conduct an audit on its top 20% IPR products to establish where circular economy
principles can be implemented to reduce WEEE and overall waste volumes arising from our products.
The Resources Division’s new design protocol expects that where required in a new product, plastics are bio-
or recycled oil-based plastics. Bioplastics are made with waste from wheat or sugar cane processing and thus
contain fewer contaminants than oil-based plastics. This is now considered a business-as-usual activity.
RM Resources' packaging reduction project has continued during 2023 – the project is finalising in the identification
and verification of its packaging volumes and has begun to engage with the up and down stream supply chain to
understand where packaging can be removed or replaced with either reusable or non-plastic packaging.
1
2
3
4
5
6
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Strategic report Sustainability report continued
Collaboration with Suppliers, Partners and Customers
7
8
To enable RM’s customers to better understand the environmental performance of the products that are
supplied, a full review of the Eco Label system has been undertaken during 2023. This project is still in
progress and will be completed during FY24. The purpose of this review is to enable RM to provide our
customers with the information they require to ensure they can make the right purchasing decisions for their
business.
RM has conducted sustainability workshops with our key suppliers including Talk Talk and Ctouch. These
workshops have focused on collaboration to deliver more sustainable outcomes for our customers. In
September, RM was invited to attend the Cambridge Press sustainability workshop where we discussed the
Cambridge Press journey and how RM can support. RM launched its Sustainable Suppliers Charter to its
Group and Technology supply chain and during 2024 this will be rolled out to its remaining
divisional suppliers.
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RM plc Annual report and financial statements 2023 Strategic report
Task Force on Climate-related
Financial Disclosures
The table below sets out where in this Sustainability Report
the disclosures are to be found:
Governance
Page
Describe the Board’s oversight of climate-
related risks and opportunities
Describe management’s role in assessing
and managing climate-related risks and
opportunities
Strategy
Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario
Risk Management
Describe the organisation’s processes for
identifying and assessing climate-related risks
Describe the organisation’s processes for
managing climate-related risks
Describe how processes for identifying,
assessing and managing climate-related risks
are integrated into the organisation’s overall risk
management
Metrics and Targets
Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in line
with its strategy and risk management process
Disclose scope 1, 2 and if appropriate scope
3 greenhouse gas (GHG) emissions and the
related risks
Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets
44
44
50
50
50
44
43
44
52
56
56
Statement of compliance with TCFD
RM plc (RM) understands and recognises that its business
has an effect on the climate. Since 2015 RM has sought to
understand through measurement, setting of targets and
commitments and delivering against these, to reduce its
impact. RM is committed ensuring it makes climate-related
financial disclosures consistent with the TCFD
Recommendations and Recommended Disclosures, as per
the LR 9.8.6(8)R and believes that RM are fully compliant
with seven of the eleven disclosures. The four disclosures
that RM are partially compliant with are below:
•• Metrics and Targets a) & c) – RM believes that RM are
partially compliant. RM will finalise metrics and targets
relating to all its environmental commitments during FY24.
•• Strategy b) – RM believes that RM are partially compliant.
RM has disclosed its high-level financial impacts of
climate-related risks through its financial impact assessment.
A detailed impact assessment for each risk and
opportunity disclosure is planned for the coming years.
•• Metric and Targets b) – RM believes full disclosure has
been made of scope 1 and 2 carbon emissions and has
undertaken significant work to establish key areas of its
scope 3 where the data is available. As further analysis is
undertaken from FY24, RM is committed to publishing
further detail of its scope 3 emissions impact.
The climate-related financial disclosures made by RM
comply with the requirements of the Companies Act 2006
as amended by the Companies (Strategic Report) (Climate-
related Financial Disclosure) Regulations 2022.
In doing this RM considered sector guidance, publications
and reports by leading climate risk research and
organisations including United Nations Framework
Conference on Climate Change, the United Nations
Environment Programme (UNEP), Intergovernmental Panel
on Climate Change (IPCC) and the UK Committee on
Climate Change and Climate Central mapping tools.
In addition to scope 1 and 2 emissions, RM also report data
on some aspects of scope 3 impact. RM has committed to
gathering emissions data from our supply chain, recognising
that they are likely to make up the largest contribution to
RMs scope 3 emissions. The scope 3 emission data
gathering project will begin in FY24 and will focus on RM's
largest suppliers across the group with a target of collecting
60-80% of our emissions by FY23 spend (excluding spend
on any Consortium suppliers). RM does not expect to be
able to report 100% of its emissions by spend before 2026.
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Background for TCFD risk assessment
RM has undertaken its climate risk assessment in line with
the group process for assessing, measuring and monitoring
risk. The group risk register includes climate change, and
during 2023 all of our climate and environmental risks have
been identified and are now incorporated into the group
risk management process – these risks are under constant
review and are subject to risk action plans.
RM have global customer and supply chain bases and
climate change will affect them all, from relocation to
adapting their operating model to accommodate the
impact of migration or weather interruptions. RM has
developed a risk assessment tool that can be used to assess
locations against extreme weather events.
•• RM has no owned properties, operating from leased
offices in UK, India and Australia.
•• Our TCFD assessment shows there are no financially
material risks in the short term.
•• The identified risks are all in the medium to long term,
allowing RM sufficient time to mitigate them.
•• Mature and tested working from home and business
continuity solutions.
•• Limited concentration of revenue with any single
customer or geography likely to be materially impacted
by climate change in the short term.
The definitions for time periods are consistent with RM’s
business planning and its published commitments and the
wider regulatory landscape.
RM have used TCFD guidance templates to assess physical
and transitional climate-related risks and opportunities, using
our corporate risk scoring methodology for two climate
scenarios, based on the IPCC 6th Assessment report:
•• Our short term time scales are aligned to RM’s short
term BP planning cycle – 2024 to 2026;
– None of the risks identified are expected to be
material in the short term.
•• 1.5°C by 2050
•• 2.4°C by 2050
The scenario analysis was carried out in FY22, a full review
of the analysis was carried out for the FY23 disclosures and
as the core business has not changed across RM, it is
determined that the analysis remains accurate. FY24 will
see a full review of the scenario analysis to ensure it
remains accurate after Consortium ceased trading in
December 2023.
The climate scenarios above have been chosen as they
represent the warming by 2050 if countries meet their stated
carbon reduction targets. Currently the 1.5 degree scenario
remains the most likely based on current commitments
made by countries to reduce carbon emissions. This,
combined with their alignment to historical patterns and
socioeconomic development, gives a high degree of
confidence that one of these is the most likely outcome by
2050. The use of these scenarios will remain under constant
review – should it become clear that high warming scenarios
should be considered, RM will undertake this analysis.
Through the above process RM has assessed that in the
short term RM are a low-risk operation in terms of climate
risk. This conclusion is based on but not limited to:
•• Medium term is aligned to RM’s net zero commitment
on scope 1 and 2 – 2026 to 2037;
– All of the risks identified have potential to become
material in the medium term and will be monitored
accordingly.
•• Long term – is aligned to the UK government net zero
2037-2050.
– All of the risks identified are likely to be material risks
in the long term. This timescale will enable RM to
assess and plan its response. Mitigation of these risks
is an ongoing process, and remains under constant
development. Currently, real estate and supply chain
mitigation has undergone the most review and an
overview of the mitigation in these areas are outlined.
RM is able to review its locations on a 5-10 year cycle
which enables RM to move locations should climate
risks become material in that location. RM seeks to
accelerate the move to digital services reducing our
supply chain and travel risks.
RM have set the materiality threshold at £250,000 or more
per annum which management believe constitutes an
appropriate level of financial impact.
This analysis has identified the following risks and
opportunities which have the greatest potential to become
material for RM across Physical Risks (both Acute and
Chronic) and Transition Risks relating to Climate Change.
Each impact has now been linked to the identified timescale
are defined as either Short (S), Medium (M) or Long (L).
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Supply chain and freight disruption
•• Volatility and disruption to suppliers and supply chains including freight due to extreme weather.
•• Emissions transition varies by country but invariably increases costs.
•• No material impact in the short term. Emerging risk in the medium to long term.
•• Expectations regarding Circular Economy have potential to grow, increasing logistics complexity
while creating potential for RM to reduce/reuse materials.
Table 1: Supply chain and freight disruption risks
Existing actions
Future response considerations
•• Supply Chain Charter launched
to Group and Technology. RM is
encouraging the reporting of supply
chain emissions.
•• Monitor and work with existing
suppliers on risk-mitigation. Consider
Climate impact as part of supplier
evaluation.
•• RM is undertaking a project to assess
•• Focused expansion of climate
against extreme weather events
at its current locations and is now
reviewing its customers' locations
using an inhouse developed tool.
•• RM is engaging with its freight &
supply chain partners to understand
their mitigation for disruption to
climate change.
resilient suppliers and diverse supply
locations.
•• Work with our delivery partners to
ensure that their delivery systems
have been tested against different
climate change scenarios and
associated extreme weather events.
•• Consider preferential use of suppliers
based on adoption of Supply Chain
Charter.
Potential impact
1.5 degree scenario
•• More frequent or prolonged
disruption impacts affecting access
to materials, products, and logistics,
resulting in negative impacts on
customer satisfaction/revenue
recognition. (L)
•• Increases in costs of raw materials,
products and services, not being able
to fully or partly be passed on to our
customers. (L)
2.4 degree scenario
The impact of this scenario will be
In addition to above:
•• Increased frequency, severity and
duration of extreme weather events
leading to greater disruption. (L)
•• Potential for people migration to
change long-term supply landscape. (L)
Financial impact:
We do not expect any material financial impact in the short term, when assessed individually and in combination with the
other risks outlined. RM is assessing the financial impact in the medium to long term, this is an ongoing project and will be
finalised during 2024.
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RM plc Annual report and financial statements 2023 Strategic report Task Force on Climate-related Financial Disclosures continued
Shift to digital
•• Cost increases for physical goods lead to a shift in preference for digital education.
•• In particular, the rising costs of Education commodities makes investment in Digital First solutions
for teaching, learning and assessment likely to deliver a more beneficial return on investment.
Table 4: Shift to digital; risks
Potential impact; risks
Existing actions
Future response considerations
1.5 degree scenario
•• Cyber security remains critical
throughout this period, in addition to
software costs, IT engineers are likely
to become more costly. (M)
•• Revenue and profit reduction as
consumable product categories
decline as prices rise. (M&L)
•• Raw materials increase in scarcity
and raise prices, reducing
customer demand, particularly for
consumables. (M&L)
2.4 degree scenario
The impact of this scenario is likely to
be sooner and faster.
•• Continuation of the migration of
core apps and services to Cloud
infrastructure, reducing carbon and
increasing global resilience.
•• Investment in a Security Operations
Centre for RM Group.
•• Work with customers and supply
chain to develop closer alignment
of approaches to reduce negative
environmental impacts and enhance
risk management in the delivery of
services.
•• RM strategy to focus on digital
•• Develop people strategy to consider
services and become less reliant on
consumables products.
climate-related risks to feed into
facilities and operational plans.
•• Continuously review strategy and
develop tests to confirm resilience of
infrastructure in delivering expected
service levels which may need to
alter to accommodate expected
disruptions.
Financial impact:
We do not expect any material financial impact in the short term, when assessed individually and in combination with the
other risks outlined. RM is assessing the financial impact in the medium to long term. This is ongoing project and will be
finalised during 2024, enabling RM to better determine the impact RM expect climate change to have on different product
categories, customer demand, digital adoption and impact on profitability.
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RM plc Annual report and financial statements 2023 Strategic report Task Force on Climate-related Financial Disclosures continued
Table 5: Shift to digital; opportunities
Potential impact; Opportunities
Existing actions
Future response considerations
1.5 degree scenario
•• Core business alignment to greater
•• Assessment division aligned to
•• Opportunity for Assessment to
remove physical processes relating
to pupil assessment. (S&M)
•• Opportunity for Technology to
provide devices and increased digital
services in schools. (S&M)
•• Further expansion of technology to
replace any paper-based process
e.g. pupils' work, assessment,
communications, content
distribution. (S&M)
•• Technology becomes more critical
and more complex, securing
additional share of budget and
requirement for specialist advice on
its management and use. (S&M)
digitisation for Technology and
Assessment divisions.
•• Increasing customer requirements
to reduce paper for examination,
driving the shift to digital.
•• Supporting customers to migrate to
cloud services reducing reliance on
onsite servers.
Digital Assessment market growth
and supporting customers digital
assessment maturity.
•• Technology division strategy and
core capabilities aligned to enabling
schools to better use technology to
deliver outcomes.
•• Technology business unit structure
allows for future solution expansion
and partnerships to adapt to
changing customer requirements.
•• Partner more closely with suppliers of
digital solutions and devices to better
assess their environmental impact
and potential for circular economy
solutions.
Financial impact:
We do not expect any material financial impact in the short term, when assessed individually and in combination with the
other risks outlined. The core market opportunity for Technology and Assessment is aligned with growth in demand for
digital services in our target customer base. There is a long term trend of growth of Technology spend in UK schools and
in the shift towards digital assessment solutions around the world. The impact of the shift to digital has less of a financial
impact for TTS. We do not expect climate change to materially alter the market opportunity for these divisions in the short
term. RM is assessing the financial impact in the medium to long term. This is an ongoing project and will be finalised
during 2024.
Environmental Metrics
The identified risks above are all material in the long term,
some have the potential to become material in the medium
and short term. The likelihood and impact of these risks
become more acute as the temperature scenarios increase.
To reduce both the likelihood and impact of these risks, RM
is tracking its performance against its environmental
commitments using the cross industry metrics including
greenhouse gases emissions, water use and waste
management outlined in the table below. RM keeps under
constant review the risks and the likelihood of each
warming scenario, as these are updated and revised.
RM will revise the risks and opportunities along with its
metrics and targets to mitigate as far as possible these
increased risks and maximise the opportunities.
RM’s key environmental commitments are;
•• Net Zero Carbon on scopes one and two by 2035
•• Net Zero Carbon on all scopes by 2050
•• Zero to landfill target by 2030
•• Reduce packaging volumes from own brand products
RM has a published a Carbon Management plan, which
outlines its path to meeting its Net Zero Carbon
commitments. This plan is updated annually. During FY24
RM will undertake a full review of the Carbon Management
Plan and finalise the budget and delivery roadmap to
ensure RM delivers its Net Zero Carbon commitments.
RM’s commitments on zero to landfill and reducing
packaging volumes require significant levels of accurate
data to ensure these can be tracked and delivered upon.
FY24 will see a detailed data gathering project undertaken
and transition plans for these commitments published.
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Physical risks impact on and at RM locations and operations
•• Location of key employees and customers subject to increased disruption from weather events such as heat, flood or
drought.
•• Risk assessment considers the main employee locations for RM (London, Abingdon, Nottingham and Glasgow in the UK,
Trivandrum in India, Melbourne in Australia and Singapore).
•• All offices and distribution centres are leased, giving greater flexibility to change locations if extreme weather makes the
operation of the building either from a financial or well-being perspective untenable to remain in the current location.
•• RM has customers all over the world (Assessment and Resources), with a specific concentration of customers in the UK
(Resources and Technology).
Table 6: Impact on and at RM locations and operations risk
Potential impact
Existing actions
Future response
considerations
1.5 degree scenario
•• Business Continuity Plans (BCP)
•• Undertake flooding risk
assessment for all key locations.
•• Assess potential transport
weaknesses for key customer
locations.
•• Ensure that BCP consider
climate-related risk impact and
mitigation.
•• Evaluate key roles being
performed in multiple locations
to add greater depth of
resilience.
•• Risk assess all service delivery
against extreme weather events.
•• As the average global temperature increases,
the longevity and severity of storms and other
extreme weather will increase;
– Disruption to operations due to extreme
weather events damaging facilities. (M&L)
– Ability of staff to attend customer sites due to
extreme weather events restricting access to
locations or transport networks. (S,M,L)
– Staff living and working in similar geography
locations could be disproportionally affected
by localised extreme weather events leading
to a potential failure of a regional/national
service area delivery. (S,M,L)
•• Disruption at key times of the year (back to
school, exam delivery) could damage customer
trust and our ability to deliver contracts. (M&L)
2.4 degree scenario:
The impact of this scenario will be
In addition to above:
•• More extreme weather and impact on physical
locations, leading to temporary or permanent
relocation requirement as a result of flooding
or sea level rises.
•• Should a key work location need to be
relocated, RM risks the loss of key personnel
and knowledge from within the organisation.
in place with all employees
capable of full remote
working and option to provide
alternative work locations for
key employees.
•• Established a Customer Advisory
Group, led by the Technology
division, with Sustainability on
the agenda to source customer
concerns, requirements and
input for future plans and
services.
•• Deliver Customer workshops on
Sustainability, raising awareness
of Climate risks and potential
impacts.
•• RM considers climate change
and its impacts on real estate
when renewing or seeking new
leases on properties.
•• RM seeks to ensure that its
real estate locations are as
environmentally friendly as
possible, our HQ is a BREEAM
outstanding building.
Financial impact:
We do not expect any material financial impact in the short term, when assessed individually and in combination with the
other risks outlined. RM is assessing the financial impact in the medium to long term. This is an ongoing project and will be
finalised during 2024.
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RM plc Annual report and financial statements 2023 Strategic report Task Force on Climate-related Financial Disclosures continued
Environmental data
The annual quantity of energy consumed from activities for
which the Company is responsible is set out below. The data
covers scope 1, 2 and 3 data from RM global operations. The
data is provided via RM's finance system or third-party suppliers.
All utilities and business travel by cars, both personal (scope
3) and Company (scope 1) data is reported in kWh. Trains
and air travel is reported in miles. The data for scope 1, 2
and 3 can be compared to 2021/22 consumption and
baseline year 2015. RM continues to work on building a full
picture of its scope 3 supply chain emissions and will report
this in the 2024 Annual Report.
Data collected in kWh relates to the consumption of gas,
electricity, from suppliers and or uses metered data.
The annual quantity of business travel undertaken by
company vehicles is outlined below. The data is collected
in miles and converted into kWh and covers all business
mileage undertaken in company and personal vehicles.
Table 7: RM Group environmental data
Scope
Source
Scope 1 Business travel
(company cars)
Country
UK
Units
kWh
2022.23
2021/22
% change
Baseline
% change
70,560
118,351
-40%
934,540
India
kWh
19,729
28,688
-31%
Australia
kWh
-
-
-
Business travel
(company cars)
Business travel
(company cars)
Gas
Scope 2 Electricity
Electricity
Electricity
Scope 3 Business travel via
UK
personal car
Air travel
Water
Hotels
Train travel
Waste - Energy to
waste
UK
UK
India
Australia
kWh
kWh
kWh
kWh
kWh
746,275
3,503,898
2,033,541
2,449,916
637,339
432,182
-
4,920
332,928
743,484
Group
Miles
476,292
481,750
UK
UK
UK
UK
m3
Nights
Miles
tonnes
2,080
1,234
1,439
1,533
172,493
189,590
32
116
36
238
Waste - Recycling
UK
tonnes
78,917
4,192,748
5,158,845
884,714
-
3,062,885
-
3,313
187,626
-
-
-79%
-17%
47%
-100%
-55%
-1%
45%
-20%
-9%
-12%
-51%
-92%
-75%
-
-82%
-61%
-28%
-
-
-84%
-
-63%
-8%
-
-
Baseline relates to the kWh reported in the 2015 Annual Report but updated to take account of the adjustments to remove residual manufacturing
impacts that ceased prior to 2015 and add acquisitions after 2015. The data centre RM operated was inadvertently removed in the baseline
reported in 2021 and has been added in following review this year.
Scope 1 covers the annual quantity of energy consumption in kWh including (a) the combustion of fuel; and (b) the operation of any facility
including leased facilities. Scope 1 included annual mileage undertake for business purposes via RM's company car fleet.
Scope 2 covers the annual quantity of energy consumption in kWh from the purchase of electricity, heat, steam or cooling by the Group for its
own use.
Scope 3 covers RM emissions from business activities that are not under RM's direct control. During 2023 RM was able to obtain a data from 2015
relating to some of the reported scope three emissions. This data has been added above, RM do not expect to obtain any further data for the
baseline year. During 2024 RM will obtain supply chain emissions and report these in its 2024 annual report.
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RM plc Annual report and financial statements 2023 Strategic report Task Force on Climate-related Financial Disclosures continued
In the year ending 30 September 2023, scope 1 and 2 as a
percentage of total energy consumption for the UK is 81%
and the rest of the world is 19%.
The climate disclosure period of 1 October to 30
September is not aligned to RM's financial year. The data
reported covers a 12-month period and ensures it captures
the seasonality variation and is based on best quality
primary source data available, which enables management's
best estimation for the emissions during the period. In the
FY24 annual report, climate disclosures will be aligned to
RM's financial year. To ensure that accurate comparisons
are able to be made, the base year and previous year data
will be realigned to the same periods – this will ensure that
FY24 does not include two extra months of data.
The rise in kWh in RM India electricity is owing to the
reopening of a previously closed office floor to
accommodate increased work in RM Assessment.
Emissions reporting
The Group is required to report scope 1 and 2 emissions for
all Group companies within the Annual Report and has
elected to report emissions for the year to 30 September
2023. The methodology in the GHG Protocol Corporate
Accounting and Reporting Standard (revised edition) has
been applied. These figures include emissions arising from all
financially controlled assets.
The calculation applies to all Group companies. For utilities
emissions captured under scope one and two, the calculation
is based on the kWh data collected for all facilities. For the
emissions from business travel under scope 1 and 3 the
mileage of Company vehicles is the base data source.
RM’s scope 3 emissions for waste, water, train travel and
business mileage from personal cars are from RM's UK-based
operations only. The waste data covers RM's two distribution
centres and its Abingdon office. The water data covers the
distributions centres.
During 2024 RM will seek to report on a minimum of 60% of
supplier emissions by spend in its 2024 annual report.
All data has been converted to carbon dioxide equivalents
using conversion factors appropriate to the location of the
impact. For vehicles, Defra conversion factors are used for
cars based on an average-sized car. All other emissions factors
have been selected from the emissions conversion factors
published annually by the Department for Business, Energy &
Industrial Strategy, or where available emissions factors
published by each country where the emission were created.
5555
RM plc Annual report and financial statements 2023 Strategic report Task Force on Climate-related Financial Disclosures continued
Emissions by scope
Scope 1, 2 and 3 emissions report
Full Year 2022/23 Carbon Emissions
2022/23
2021/22
Baseline 2015
Scope
Source
Scope 1 Car/van travel
Car/van travel
Car/van travel
Gas
Scope 2
Electricity
Electricity
Electricity
Scope 3
Business travel via
personal car
Air travel
Water
Hotels
Train travel
Country
UK
India
Australia
UK
UK
India
Australia
UK
Group
UK
UK
UK
Waste - Energy to waste UK
Waste - Recycling
UK
Total UK (tcO2E)
Total Overseas (tCo2e)
Total (tCO2e)
%
Change
year-on-
year
-41%
25%
-
-45%
-12%
48%
-100%
-30%
-65%
43%
-73%
-45%
0%
0%
Tonnes
CO2(e)
17
Absolute
tonnes
CO2(e)
-
5
-
406
417
454
129
90
0.3
13
6
1
5
1,084
459
-
-
428
871
-
-
-
-
-
-
244
-
-
-
-
1,744
315
1,534
-
-25%
2,059
4
0
737
474
306
5
185
254
0.2
48
11
1
5
Tonnes
CO2(e)
29
Absolute
tonnes
CO2(e)
-
Tonnes
CO2(e)
225
19
Absolute
tonnes
CO2(e)
-
-
-
% Reduc-
tion from
baseline
-92%
-74%
-
-
-
770
909
1,153
-63%
785
2,229
791
-81%
-43%
-
3,020
-71%
-
-
-
-
-
-
1017
46
7
-
-
-
-
-
-
504
1,070
-
-
-
4,433
810
5,243
-
-
-
-
-91%
-
-72%
-14%
-
-
-
-
-71%
Baseline relates to the carbon dioxide emissions reported in the 2015 Annual Report but updated to take account of the adjustments to remove
residual manufacturing impacts that ceased prior to 2015, business travel and add impacts associated with acquisitions after 2015. It has been
corrected and restated versus what was reported in 2021.
Scope 1 covers the annual carbon dioxide emissions from activities for which the Group is responsible including (a) the combustion of fuel; (b) the
operation of any facility; (c) business travel in company cars.
Scope 2 covers the annual carbon dioxide emissions from the purchase of electricity, heat, steam or cooling by the Group for its own use.
Scope 3 covers the annual carbon dioxide emissions from a range of business-related activities that are not under RM direct control.
Air travel is labeled as Group but counted in the UK Total tcO2E.
5656
RM plc Annual report and financial statements 2023 Strategic report Task Force on Climate-related Financial Disclosures continued
Analysis
•• UK gas use has significantly reduced due to closure of
the Trowbridge site. RM has also delivered reductions in
consumption through a focus on energy efficiency
throughout its operational sites.
•• Business mileage has reduced since the 2021/22
reporting year through a continued rationalisation of
travel and upward trend for virtual meetings.
•• RM India's electricity consumption has increased in line
with increased operations leading to the opening of
previously closed office space.
•• UK electricity has reduced in line with the gas
consumption, due to a combination of estate
rationalisation and delivery of an energy efficiency
programme.
•• Scope 3 employee travel, covering air, personal cars and
trains, have all reduced significantly since 2021.
•• In the year ending 30 September 2023, scope 1 and 2 as
a percentage of total CO2e for UK is 54.2% and the rest
of the world is 29.9%. The remaining 15.9% of the total is
UK scope 3.
•• Versus the 2015 baseline, RM has reduced its overall
carbon emissions, covering scopes 1,2 and 3, by 71%.
Emission intensity
Emissions have also been analysed using intensity metrics,
which enable the Company to monitor how well emissions
are controlled on an annual basis, independent of
fluctuations in the levels of activity. The metric used is
‘emissions per £m of revenue’ in line with industry
standards. This is shown in the table below.
Emissions per £'m of revenue
Tonnes CO2e/£'m
per revenue
Year ended
30 September
2023
Year ended
30 September
2022
Year ended
30 September
2015
Scope 1
Scope 2
Scope 3
Total Scope 1, 2 & 3
2.13
4.33
1.21
7.67
3.60
3.66
2.35
9.61
6.27
16.13
6.00
28.40
Following the increase in RM's scope 3 data, the Emissions
Intensity has now been updated to include scope 3
intensity. The improvement of emissions per £m of revenue
in 2023 compared to the baseline year and 2022 is as
follows:
Intensity changes
Scope 1
Scope 2
Scope 3
Total
Year ending
30th Sept
2022
Year ending
30th Sept
2015
-41%
18%
-48%
20%
-195%
-273%
-394%
-270%
5757
RM plc Annual report and financial statements 2023 Strategic report
Social value
Each division in RM plc (RM) plays a role in delivering on its
purpose to enrich the lives of learners, each at different
parts of the learning lifecycle. From early years and
curriculum resources in RM Resources, through to the
assessment of learning for students and professionals
around the world, while providing technology platforms
that support thousands of teachers and learners every day,
the divisions come together to usher in better lives for
learners worldwide.
RM has always recognised and sought the opportunity to
support and have a positive impact on the economic,
social, and environmental wellbeing of the communities in
which it operates. To enable this, RM is going beyond the
social value provided by its products and services.
During FY24, RM will develop its social value strategy which
will provide the framework for the delivery of social value
throughout RM.
As a leader in Educational Technology solutions, RM
supports its customers to provide the best educational
outcomes for pupils throughout the country, this includes:
•• Protecting 1.5 million students and teachers, and filtering
700 million web requests a day via RM SafetyNet.
•• Development of specialist Special Educational Needs
and Disabilities (SEND) Oti Bot.
•• Digital assessment service, removes the need for 5
million sheets of paper per year.
•• Creation of RM Study Kit, with the mission to place a
device in the hand of every pupil in the UK. Study Kit
enables schools to deliver appropriate, affordable and
high-quality technology at an inclusive price for all.
During FY23, RM has focused on building upon the
foundation of its social value programme through the
continued support of projects while seeking new
opportunities to support both our local and national
communities, these have included:
•• Sponsorship of Hucknall Town FC – in 2023, Hucknall
Town FC named their ground the RM Stadium.
•• Bake-off events held in our Nottingham and Abingdon
Offices in support of Gifts from Fairies & Quest for Learning.
•• RM SafetyNet Football Shirt sponsorship of a grassroots
youth football team with its SafetyNet brand, supporting
children to have active lives beyond the classroom.
5858
•• Enabling our colleagues to get involved in School
Governance, granting all employees up to 25 hours
additional paid time off to act as a School Governor,
Local Advisor or Trustee.
•• Colleagues participate in school-based events that help
to guide students in their career choices, these have
included the careers fair at Cranbrook School in Kent
and the careers workshop at Trinity School in Berkshire.
•• RM partnered with SaxaVord Spaceport to create
Starflight Academy, launching a four-day STEAM initiative
which brought the excitement of space to classrooms
across the country through interactive virtual sessions.
Just under 130 schools registered for the programme
across the country.
•• Collection of Christmas Gifts at three of our offices for
Barnardo’s with over 100 gifts donated.
•• Partnership with 2nd Chance supporting technology
skills development for people with disabilities.
Our colleagues in India operate two flagship social value
programmes – these programmes are designed to make a
holistic impact on the education sector.
•• Graeme Dewart Scholarships
•• School Adoption Programme
Since its inception in 2007, the Graeme Dewart scholarship
programme has touched the lives of more than 300
students, many of whom are now employed within IT and
ITES companies. The programme has independently
funded 83 student’s annual tuition to support the next
generation of learners.
In December 2022, we gave assistive devices to five
children with disabilities as part of our new initiative to
support Children with Special Education Needs.
Through the School Adoption Programme, we supported
seven schools by sponsoring Communicative English and IT
teachers.
RM plc Annual report and financial statements 2023 Strategic report
Our people
The Board considers our people and engagement
as an issue of core importance to RM plc’s (RM) success.
form they will take, and how it will continue will be finalised
and embedded throughout FY24.
To read about the induction process for new Board
members please see Governance on page 76.
Employee engagement survey
To better understand how our people feel about life at RM,
this year saw a change in how we manage our employee
engagement survey. The survey previously provided limited
insight into a small number of elements of life at RM. In
FY24, we increased the number of questions asked, revised
the question set to better reflect how our people felt
towards the areas that mattered most, and changed our
approach to how we survey our people around
engagement. Year-on-year there is a strong response rate
from our people, with more than 80% of employees
participating (August 2022: 79%, January 2023: 86%).
In June 2023, a new Head of Internal Communications and
Engagement was appointed in the business to support in
enriching RM’s approach to employee engagement. In
recent months, communication has seen increased focus
from the RM Executive team, with more structure being
embedded to allow for improved interactions with the
workforce.
People at all levels of the organisation are invited to
quarterly all company town hall sessions, led by Chief
Executive Officer, Mark Cook, who provides key business
insight on strategy and direction. This, coupled with more
frequent business unit briefings allow all people the
opportunity to hear from, and ask questions directly of the
Executive team, supporting in their understanding of the
business direction and enabling the Executive team to
better understand sentiment among the workforce.
Through a renewed employee survey, employees are given
the chance to share their views on the business. A new survey
cadence launched in October 2023 which will see all-
company engagement surveys run every six months, with
actions being devised based directly on employee feedback at
a Group and local business unit level.
Following a review of all employee groups in the organisation,
along with newly reworked Inclusion Networks, there has also
been activity underway to redefine the RM Advocates group
which previously acted as a conduit from the business
to the Leadership team. Plans for this group, the
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RM plc Annual report and financial statements 2023 Strategic report Our people continued
How we measure engagement
Historically, we measured engagement using the following
four questions: (i) I am proud to work for RM plc; (ii) RM plc
is a great place to work; (iii) On a scale of 1-5, how likely are
you to recommend RM plc as a place to work to friends or
family; and (iv) I still see myself working at RM plc in two
years’ time.
Having reviewed the survey format during 2023, we
decided to add one additional question addressing
likelihood of leaving RM to ascertain sentiment linked to
attrition and retention and understand employee loyalty
which is strongly linked to engagement. The additional
question did impact the overall engagement score slightly
– including the new question the score was 57%, whereas if
we excluded it, the score was 59%.
Feedback from the engagement survey provided insight into
how our people felt during what has been a period of
significant transformation for the business. Since the last
survey in January 2023, we’ve seen a renewed Executive
Team, continued challenges in the external market continuing
to affect parts of the organisation, and reprioritisation of
budgets. These factors contribute to the 57% overall
engagement score mentioned above which is down 6ppts
from 63% in January 2023 (August 2022: 65%) however
many of the scores within the survey held strong and
consistent. Notably, there has been an increase in
Company Confidence, Leadership, Managers and
Collaboration, which all indicate future optimism.
Moving forward, we’ll conduct employee engagement
surveys every six months, with the next survey scheduled
for May 2024, and subsequently November 2024,
continuing the six-month cycle.
Creating environments our people
can thrive in
By rethinking the physical space, embracing the latest
digital innovations, and embedding sustainability into every
aspect of the workplace, we have made steps to deliver
memorable employee experiences in the hybrid world. In
addition, the diversification of our real estate options,
adopting coworking spaces and serviced offices, will
provide our people with more freedom and choice in their
work environments while reducing operating costs.
6060
Future ways of working will be
explored to assess the effectiveness of
hybrid working and how our people will
work together in office environments. The
creation of agile spaces that work when we need
them to, define the purpose of when and why we come
together. Effective implementation and review of workplace
strategies like hot-desking, hoteling, and development of
remote working policies are ongoing.
We will be embracing flexible layouts and modular designs to
accommodate changing needs and evolving workstyles.
Focusing on providing a human-centric workplace that promotes
the physical, mental, and emotional wellbeing of our people.
Health, Safety and Wellbeing
RM is committed to supporting its employees and promoting
positive health and wellbeing, and throughout FY23 we
continued to ensure that the workforce is safe and well. A
particular strength which our employee engagement
survey confirmed, is our people feel safe at work, scoring
the highest positive response across the business.
We delivered a range of programmes in 2023 to help us
understand and manage our workplace safety and
employee wellbeing while driving continuous
improvement, these included:
•• All members of our leadership team have commenced
executive training to better integrate health and safety
practices into our business holistically, while also role
modelling behaviours for a positive safety culture.
•• RM created a new Group Health & Safety Manager role
in September 2023 to develop and standardise global
ways of working ensuring a consistent approach to
organisational health and safety.
•• Our employees have continued to operate in a hybrid
working approach supported by My WorkBlend, enabling
employees to work flexibly where appropriate, supporting
our people to balance their roles and lives. The positive
activity here led to work-life balance being among our
highest scoring employee engagement survey questions.
•• We have a network of mental health first aiders and a
range of resources to support managers and employees
with mental health, that run alongside the resources and
benefits for employees with physical health.
RM plc Annual report and financial statements 2023 Strategic report Our people continued
•• All employees have access
to an employee assistance
programme provided by Aviva which
offers access to a confidential helpline
available 24hrs a day everyday with online
support and guidance, face-to-face counselling and
specialist bereavement counselling if required.
•• Numerous virtual and hybrid initiatives tailored to engage
both in-office and remote colleagues. We organised an
online seminar on Breast Cancer Awareness led by a
radiation oncologist to promote proactive health check-
ups and early detection. Another highlight was a Krav
Maga training session, where experienced coaches
helped the participants learn the basics of self-defence.
Future focused
We have reviewed our areas of focus for the future and we will:
•• Support and strengthen the culture of psychological
•• Integrate an Occupational Health and Safety
safety throughout RM to enable our people to feel safe
and empowered, to take ownership of health and safety,
and to speak out when actions are outside of the policy.
Through this empowerment of all our people, RM will be
able to focus on learning from our mistakes which will
drive continuous improvement in our performance and
create an authentic positive safety culture.
•• Expand our mental health support and awareness, creating
a culture where mental illness is ‘equal’ to physical illness,
through the application of Stress Management Standards
in how we plan and undertake our work. We will support
our people through mental health and workplace stress
awareness training supported by our newly formed
Mental Health & Wellbeing Network and the Employee
Assistance Programme.
Management System that supports ISO 45001 into our
business operations. Through this structured approach,
RM will keep safety simple and proportionate, by
proactively identifying and eliminating hazards and risks
to maintain safe work environments.
•• Re-energise our framework to ensure worker
consultation and participation in health and safety matters
through implementation of our Group Health and Safety
Committee and Safety Champions. We will enable all our
people to input and feedback into our policies, procedures,
processes, and initiatives to increase job satisfaction
through workforce engagement and to capture best
practice and efficiencies in how we work.
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RM plc Annual report and financial statements 2023
Strategic report Our people continued
Equity, diversity and inclusion
Equity, Diversity, and Inclusion (EDI) is an inherent part of
RMs purpose to Enrich the Lives of Learners globally.
RM’s vision is to be a leader and key driver of EDI
throughout the education sector. And by ensuring RM
reflects its customers and communities in which we
operate, we will enable RM to create products and services
aligned to their needs and expectations.
2023 overview
This year has been a year of significant refocus across RM
as a business and has seen EDI brought to the forefront of
the organisation. The recognition of the benefits that a
strong, inclusive and diverse team can bring is firmly
embedded throughout at all levels of RM.
RM appointed the Head of Sustainability to lead the work
and build on last year’s foundations.
RM currently has six EDI networks, these are Women at
Work, Pride, Neurodiversity, People of the Global Majority
and Allies, adding The Disability Network midway through
the year.
Gender identity
Internal sentiment towards EDI is positive. We enhanced the
questions we asked our people in our Engagement Survey to
capture more comprehensive feedback around inclusion
and scores remained strong. The areas that returned low
scores are now focus points for RM plc going forward. We
scored particularly well on two new questions, ‘people from
all backgrounds have equal opportunities’ and ‘RM plc is an
inclusive place to work’ which were rated 73 and 70
respectively. There has also been an increase in two points
when asked ‘when I share my opinion, it is valued’. Feedback
also acknowledges team diversity across the business which is
also represented in our Executive Leadership Team which is now
comprised of 3:5 females to males.
Data on Diversity
Each member of the Board and member of the Executive
Committee self-reported their gender identity and ethnic
background through a fixed choice questionnaire with
possible responses aligned to the specific categories in
Listing Rule 9 Annex 2.
Number of
Percentage of
Board members
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
4
2
-
1
57%
29%
-
14%
2
1
-
1
5
3
-
-
62%
38%
-
-
Men
Women
Other categories
Not specified/prefer not to say
Ethnic Background
Number of
Percentage of
Board members
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/ Caribbean/Black British
Other ethnic group, including Arab
Not specified/ prefer not to say
6
-
-
-
-
1
86%
-
-
-
-
14%
3
-
-
-
-
1
6
1
-
-
1
-
75%
12.5%
-
-
12.5%
-
6262
RM plc Annual report and financial statements 2023
Strategic report Governance continued
Governance
Highlights from our FY23 Journey
•• Regular discussion with Executive and SLT teams, with
the aim to drive the strategy, raise EDI knowledge and
awareness throughout all levels of the business.
•• Clear structure and framework implemented for our
It is important at RM that governance ensures it can deliver
its purpose and strategy in a way that is aligned with its
values, so that it is a trusted partner to its customers and
other stakeholders.
Network Leads, to recognise and compensate them for
EDI-related activities, making it more than a ‘side-of-desk’
expectation.
RM is committed to conducting its business with integrity
and its approach to risk and compliance helps encourage
the right behaviours across the business.
•• Significant increase in EDI-related communications with
dedicated campaigns, for example National Inclusion
Week where we featured external industry experts and
charity partners.
•• Dedicated measures of success using sentiment tracking
as a part of our Engagement Survey activity – which will
continue through the year.
EDI isn’t just something we do to ensure an equal, diverse,
and inclusive working environment, EDI is also part of the
way we do business. This year EDI was at the centre of our
customer bid proposals and solutions, for example;
•• The new robotics range have capabilities that specifically
cater for children with learning disabilities.
•• Our Neurodiversity Network Lead has visited customer
and non-customer SEND schools to talk about his lived
experience. The talk extended to life at RM and the
support available, as well as our approach to EDI and
future ambitions to further enable SEND customers.
Key themes for FY24
To ensure that RM continues its positive trajectory from
FY23 into FY24, we have focused on the strategy and what
is needed to deliver our strategy and vision. Our key themes
for actions in FY24 are:
•• Continue to embed our Inclusive and psychologically
safe working environment.
•• Creation of products and services that are inclusive and
accessible to all.
•• Create links across our wider industry.
The Corporate Governance Report on page 72 sets out the
framework for governance in RM and the role of the Board.
Code of Conduct
An employee Code of Conduct governs the ways of working
across the business and sets out the standards that employees
are expected to follow.
The Code reflects RM’s culture and emphasises that employees
are trusted to behave with integrity and honesty, and in
accordance with applicable laws and regulations. There are
a comprehensive set of policies that set out guidance and
specific processes and procedures that employees are
required to follow.
Employees are required to confirm annually that they have
read, understood, and comply with the Code.
All policies are owned by a specified member of senior
management and policy review dates set to ensure they are
regularly assessed and kept up to date.
Anti-bribery and corruption
As part of the education sector, RM strongly supports the
prohibition against giving, receiving, or offering any bribes
or any other forms of corruption. The Anti-Bribery Policy sets
out the standards and processes all employees and relevant
partners are required to follow. These are designed to minimise
the circumstances under which such behaviours may occur.
The policy also covers the giving and receiving of gifts and
hospitality and expenses and includes practical examples to
make it clearer and easier for employees to understand
its application.
A formal assurance process is carried out once a year that
requires employees to confirm that they understand and
comply with this policy.
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RM plc Annual report and financial statements 2023 Strategic report Governance continued
There is also an Anti-Money Laundering Policy which commits
RM to promoting and maintaining the high levels of ethical
standards in relation to all its business activities and a
zero-tolerance approach to money laundering. It commits
RM to acting fairly and with integrity in all its business dealings
and relationships. It provides for procedures to be followed,
situations that may be considered suspicious, action to be
taken in such circumstances and record keeping requirements.
Only a limited group of employees can release any payments
and those employees are fully appraised of these risks.
Competition Law
A Competition Policy is in place and training is available for
all relevant employees to help them understand the issues
they need to be aware of. A register is maintained by the
Legal Department and is available for employees to complete
in advance of attending trade association meetings. Additional
specific training is provided to those attending trade
association meetings where appropriate.
Data Protection
Given the nature of its operations, RM has always taken
data protection matters seriously. The security and integrity of
customer data is critical to the Group and is noted in the table
of “Principal Risks and Uncertainties” in the Strategic Report.
The Company has a formal Group Security and Business
Continuity Committee (‘GSBCC’), which oversees data
protection matters. That Committee is chaired by the Chief
Digital Officer and attendees include the Group’s Data
Protection Officer (‘DPO’), Chief Financial Officer, senior HR
employees and representatives from each of the Divisions.
As part of its ongoing programme of GDPR compliance, the
Group has formal Data Protection Policies and a Cookies
Policy covering data of employees, customers, candidates,
examiners and visitors to its websites. The policies commit
RM to protecting and respecting the privacy of individuals
and complying with all legal requirements. New starters are
assigned mandatory training on GDPR and ongoing training
is provided to all staff, as well as to contractors and temporary
staff that have access to company systems or data. Security
vetting of relevant suppliers and other third parties is conducted
when considered appropriate. The DPO works independently
of management in fulfilment of the statutory duties required
of that role and can, if necessary, escalate issues directly to
the Board via the Company Secretary.
6464
As well as attending the GSBCC, the DPO provides updates
to the Board or Executive Committee on data protection
matters. Both customers and employees can raise queries
with, and send complaints to, the DPO. All potential personal
data breaches are investigated and recorded. No data breaches
have been reported to the ICO, the UK’s regulator, in the
past year.
Data Security and Resilience
Given RM’s role supporting and advising schools and other
education bodies, data security and resilience are taken
seriously. For details of the actions taken, see the Principal
Risks and uncertainties section on pages 38 to 41.
The GSBCC, referred to in the Data Protection section
above, also oversees data security and resilience matters.
Access to systems is role based and applied with a principle
of least privilege. Access is reviewed regularly through
established internal processes and is subject to external
independent audits as part of maintaining ISO certifications.
The latest audits reported no non-conformances. The
GSBCC also maintains Cyber Essentials Certification.
Business accounts are additionally protected with multi-
factor authentication (MFA) and user behaviour analytics
and are monitored by a Security Information and Event
Management (SIEM) solution.
The Company has a cryptographic policy that governs
encryption controls, with disk encryption applied to all
employee machines.
The RM Acceptable Usage Policy provides guidance for all
RM Group employees regarding how they may and may
not use company systems and data, and their responsibility
for information security. The policy is reviewed annually
prior to formal approval by the GSBCC, which oversees
information security policy and implementation. The
Acceptable Usage Policy is further supported by other
specific policies including Data Classification & Handling
and Incident Management.
Data security policies are controlled, reviewed and subject
to external audit as part of maintaining ISO certifications.
RM also runs a formal Security Awareness programme for
all new staff.
RM plc Annual report and financial statements 2023 Strategic report Governance continued
As part of ‘secure by design and by default’ principles,
business continuity management for the RM Assessment,
RM Technology and RM India Divisions is aligned to ISO
standards and subject to external audit. ISO 22301
certification is in place.
Were a breach to occur, the Company has established
relationships with third party partners to support with cyber
incident response and crisis PR.
Health and Safety
The Health and Safety Policy covers employees on its sites
and at customer sites. It commits RM to a safe working
environment, a culture of open discussion on health and
safety issues, transparent reporting and compliance with all
relevant laws and regulations. Further information on this is
detailed in the Our people section on pages 59 to 63.
Human Rights and Modern Slavery
RM is committed to minimising the opportunity for modern
slavery to take place within RM and its supply chain. It has this
year reviewed its internal processes and programme of review
for suppliers. A Modern Slavery Working Group has been set
up with representatives from across the business with the
objective of ensuring our modern slavery risks, are managed,
monitored and mitigated wherever possible. RM works with
Sedex, a leading ethical trade membership organisation
platform and the Resources division, which manages a
significant proportion of the suppliers of the group, issues a
Supplier Code of Conduct. See page 81 for further details.
The Modern Slavery statement is available on the RM website.
Political Donations
Neither the Company nor any of its subsidiaries made any
UK political donations or incurred any UK political expenditure,
nor made any contribution to any non-UK political party,
during the year or the previous year.
and the supply of products and services that help customers
keep children and young people protected from online harm.
The Policy further states the Company has a responsibility
to keep children and young people safe. This is regardless
of age, gender, race, religion or belief, sex or sexual orientation.
All staff working in environments where children are present
must be familiar with policies at that place. Staff must report
any incident that may give rise to a concern to the nominated
child protection lead at that institution.
Share Dealing Policy
The Share Dealing Policy is applicable to all employees and
Directors. It is designed to ensure that they do not misuse
any inside information about the Group which is not public.
There are clear processes for informing individuals about
their obligations under the Policy and obtaining
authorisation to deal.
Tax
As a UK company, the Group pay taxes to the UK Government
and overseas where applicable. The approach to tax is aligned
with RM’s purpose and values and to ensure that RM pays
the right amount of tax at the right time based on laws,
rules and regulations in the territories in which it operates.
The Tax Strategy is on RM’s website.
Whistleblowing
Employees are encouraged to speak up if they feel that
something is not right. The Policy states that employees
can speak to their manager, HR Business Partner or other
high-level person in the Company in the first instance if
they have any concerns and there is also an independent
third party service they can use to report any concerns in
confidence and anonymously if they wish. Information on
this policy and the contact details of the third party are
readily available on the internal employee portal.
Safeguarding
RM is committed to protecting students of its customers
from harm. The Safeguarding Policy applies to anyone working
on behalf of RM including employees, contractors and
agency staff.
The Policy states the principles that guide the approach to
child protection and online safeguarding covering recruitment
of staff, partnering with customers when any allegation is
made, the incident management and whistleblowing measures
The Policy provides that all allegations raised are forwarded
to the Chief People Officer (unless it relates to them) and
members of the RM People team are trained to handle such
matters. The individual will be informed of the process in
dealing with the matter. The Policy sets out RM’s commitments
in complying with the Public Interest Disclosure Act 1998 to
protect any person who raises a relevant concern. The
Policy states that any case that poses a significant risk to
the business is reported to the Audit and Risk Committee
with ultimate ownership by the Board.
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RM plc Annual report and financial statements 2023 Strategic report
Non-financial and
sustainability information
The Strategic Report (including the Sustainability Report) together with the Directors’ Report, Corporate Governance
Report and Audit and Risk Committee Report provide details of the non-financial matters required by sections 414CA and
414CB of the Companies Act 2006.
Reporting Area
Environmental
Policies and related
Due Diligence and Outcomes
Principal risks
Environmental Policy (pages
42 to 47)
RM risks relating to the environment are detailed in the aforementioned
sections of climate-related risks across the whole business.
Climate-related Financial
Disclosures (pages 42 to 47)
Employees
Equal Opportunities Policy
(pages 59 to 62)
RM reflects diversity and health and safety risks in the People risk section
on page 40
Health and Safety Policy (pages
60 to 61)
Social and
Community
Respect for
Human Rights
Safeguarding Policy (page 65)
RM reflects safeguarding risk in the Operational execution risk on page 39
Annual Modern Slavery
Statement (page 65)
RM considers these risks with its suppliers on page 40 and Data and
Business continuity on page 38
Data Protection Policy (page 64)
Supplier Code of Conduct
(page 65)
Anti-Corruption
and Anti-Bribery
Anti-Bribery Policy (pages 63
to 64)
RM reflects anti-bribery and corruption risks in its Operational execution
risk on page 39
Anti-Money Laundering Policy
(pages 63 to 64)
Share Dealing Code (page 65)
See page 17 for the description of the business model and pages 20 to 25 for KPIs and non-financial targets.
Environmental Policy and Reporting
The Environmental Policy and Reporting section in the Sustainability Report on pages 42 to 47 is incorporated
into this report.
Workforce
The section on workforce in the Social Value Report on page 58 is incorporated into this report.
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RM plc Annual report and financial statements 2023 Strategic report
Section 172 statement
In summary, as required by Section 172 (s.172) of the Companies Act 2006, a director of a company must act in the way
they consider, in good faith, would most likely promote the success of the company for the benefit of its shareholders, as a
whole. In doing this, the director must have regard, among other matters to the items outlined in the table below;
s.172 duties
Section
Pages
Consequences of decision in the long term
Business Model Viability
Viability Statement and Going Concern
Principal Risks and Uncertainties
Interest of employees
Social Value (Workforce)
Stakeholder Engagement (Employees)
Foster relationships with suppliers, customers and others
Stakeholder Engagement (Suppliers and Partners)
CEO Report
Impact on community and environment
Sustainability Report (Environmental Policy and Responsibility) and TCFD
Report
Sustainability Report (Community)
Stakeholder Engagement (Environment/Community)
Maintaining high standards of business conduct
Purpose, Values and Culture
Sustainability Report (Governance)
Acting fairly between members
Stakeholder Engagement (Shareholders)
17
32 to 35
38 to 41
58
79 to 80
81
10 to 16
42 to 57
58
81
4 to 5
63 to 65
80
Consideration of our key stakeholders is embedded into Board decision-making, strategy development and risk assessment
with high importance placed on each of our key stakeholder groups: Customers, Employees, Shareholders, Suppliers and
Partners, and Environment/Community.
An overview of stakeholder engagement and key initiatives undertaken by the Board during the year is detailed on
pages 79 to 81 in the Corporate Governance Report.
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RM plc Annual report and financial statements 2023 Corporate governance
Corporate governance
70 Board of Directors
72 Corporate governance report
84 Nomination committee report
88 Audit and Risk Committee report
96 Remuneration committee report
119 ESG committee report
120 Directors’ report
124 Statement of directors’ responsibilities
125 Directors duties statement
Corporate governance
6868
68
RM plc Annual report and financial statements 2023 Corporate governance
6969
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RM plc Annual report and financial statements 2023 Corporate governance
Board of Directors
Helen Stevenson
APPOINTED TO THE BOARD
16 February 2022 as Non-Executive Chair
ENR
CAREER
Helen Stevenson was appointed as Non-
Executive Chair of RM plc on 16 February
2022. She is also the Chair of the Nomination
Committee.
RELEVANT SKILLS AND EXPERIENCE
30-year executive career spanning senior
supply and demand side roles across large
Consumer Goods, Retail Financial Services
and Digital Media organisations. Considerable
expertise in strategic brand and customer
marketing, and 11 years PLC non-executive
director.
Mark Cook
APPOINTED TO THE BOARD
16 January 2023 as Chief Executive Officer
CAREER
Mark Cook joined the Board as CEO in
January 2023.
RELEVANT SKILLS AND EXPERIENCE
With a background in operations and
technology, Mark brings extensive experience
in business transformation and creating
shareholder value.
Simon Goodwin
APPOINTED TO THE BOARD
29 August 2023 as Group Chief Financial Officer
CAREER
Simon Goodwin joined the Board as Group
CFO on 29 August 2023.
RELEVANT SKILLS AND EXPERIENCE
Simon is a Chartered Management
Accountant with 15 years of experience
in finance leadership roles.
OTHER ROLES
Helen is a Non-Executive Director and Remco
Chair of IG Group Holdings plc, a FTSE 250
fintech company providing derivatives trading.
Until recently, she was also the Senior
Independent Director of Reach plc, a Non-
Executive Director of Skipton Building Society,
and Senior Independent Director of Kin + Carta
plc. Helen was the Chief Marketing Officer UK
at Yell Group plc from 2006 to 2012, including
responsibility for digital product development
and, prior to this, served as Lloyds TSB Group
Marketing Director. She started her career with
Mars Inc where she spent 19 years, working
across senior supply side and demand side
roles, culminating in European Marketing
Director. Helen is a Governor at Wellington
College where she is also Chair of the
Wellington College Educational Enterprises
Board and is a member of the Henley Business
School Strategy Board.
OTHER ROLES
After qualifying as an accountant and working
in several finance roles, Mark moved into
consulting, joining Xansa PLC where he led
transformation and systems implementation
programmes for clients including the BBC and
Boots. In 2010, Mark joined Getronics Group
under Aurelius Investments where he
refocused the portfolio and created a global
technology digital services business. In 2019,
Mark joined Capita plc as CEO for the People
Solutions Division and latterly the Technology
Solutions Division. Mark is currently non-
executive Chair of Searchlight Consulting.
OTHER ROLES
Prior to joining the Board of RM plc, Simon
was the Group CFO of MTI Technology from
December 2017 until July 2023, where he was
responsible for the finance and administrative
functions across their operations in the UK,
France, and Germany. Simon has also held
senior finance roles in Getronics, the Dutch
ICT business, and Sopra Steria, the digital
services and software development
consultancy. After qualifying as an accountant,
Simon worked in a number of finance and
commercial roles for Xansa PLC, Warner Bros
and Marks and Spencer PLC.
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RM plc Annual report and financial statements 2023 Corporate governance Board of Directors continued
Christopher Humphrey
APPOINTED TO THE BOARD
7 July 2023 as Non-Executive Director
ENRA
CAREER
Christopher Humphrey joined the Board on
7 July 2023 as a Non-Executive Director and
was appointed Chair of the Remuneration
Committee on 10 October 2023. On 1
January 2024 Christopher was appointed
Senior Independent Director.
RELEVANT SKILLS AND EXPERIENCE
Christopher Humphrey has extensive
international, financial and general management
experience gained across a range of sectors
and in a variety of international markets (UK,
USA, Europe and Far East) both in growth and
turnaround situations.
OTHER ROLES
He is currently Chair of AIM-listed Eckoh plc,
a customer engagement and contact solutions
provider, a position he has held since 2017, and
Non-Executive Chair of Heywood Pension
Technologies – a pension solutions provider.
He also served as Senior Independent Director
and Audit Chair at AVEVA Group plc, Senior
Independent Director and Audit Chair at
Videndum plc, and Non-Executive Director at
SDL plc, a language translation software
provider. Christopher has had a number of
leadership roles during his career, including the
position of Group Chief Executive Officer of
Anite plc from 2008 to 2015.
Richard Smothers
APPOINTED TO THE BOARD
3 January 2023 as Non-Executive Director
ENRA
CAREER
Richard Smothers joined the Board on
3 January 2023 as a Non-Executive Director
and became Chair of the Audit and Risk
Committee on 31 March 2023.
RELEVANT SKILLS AND EXPERIENCE
Richard is a Chartered Management
Accountant and has recent and relevant
finance experience.
OTHER ROLES
He is currently the Chief Financial Officer at
Greene King Limited, a role he has held since
2017, and has both strategic, financial and
operational responsibilities. Prior to this he was
Chief Financial Officer at Mothercare plc and
held a number of senior roles at Rexam plc,
Tesco plc and Cargill Inc.
Jamie Murray Wells OBE
APPOINTED TO THE BOARD
1 November 2023 as Non-Executive Director
ENRA
CAREER
Jamie Murray Wells joined the Board as a
Non-Executive Director and was appointed
Chair of the ESG committee on 1 November
2023. Jamie brings leading digital product and
strategy expertise to the Board, having worked
since 2013 for Google, where he has held
roles defining new platforms and ecosystems,
including as Head of Digital Platform
Experiences and Head of Extended Reality (XR)
Platform Enablement. Prior to joining Google,
Jamie founded and led Glasses Direct, a
digital-led retail business, before taking it
through a private equity transaction with Cipio
Partners. He recently served as a non-executive
director of DD Group, the wholesale supplier to
the dental sector.
RELEVANT SKILLS AND EXPERIENCE
Jamie brings leading digital product and
strategy expertise to the Board.
OTHER ROLES
Jamie is a director of Trotters (Childrenswear
& Accessories) Ltd, the timeless British
childrenswear, footwear and hairdressing
brand and The Cheese Geek Ltd, a business
modernising cheese wholesale and retail online.
Carolyn Dawson OBE
APPOINTED TO THE BOARD
1 November 2023 as Non-Executive Director
ENRA
CAREER
Carolyn Dawson joined the Board as a
Non-Executive Director on 1 November 2023.
She is currently CEO of the Founders Forum
Group, the business services group for
entrepreneurs, and is leading the relaunch of
Tech Nation. Prior to this role she spent over
20 years at Informa Group plc, working in a
range of leadership roles, including founding
London Tech Week and most recently as
President, Verticals and ESG, Informa Tech.
RELEVANT SKILLS AND EXPERIENCE
Carolyn brings significant and current experience
in the technology and education sectors.
OTHER ROLES
Carolyn is a Trustee for Centre for Entrepreneurs.
She has co-founded Miroma Founders Network,
which provides growing businesses with media
opportunities. Carolyn also serves on the board
of 01 Founders, a free-to-access coding school;
Founders Makers, a creative partner to scaleups
and major brands, and Grip, an AI-powered
networking solution.
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RM plc Annual report and financial statements 2023
Corporate governance
Corporate governance
report
Introduction from the Chair
As Chair, I am responsible for ensuring that the Company
has high standards of corporate governance. In respect of
the year ended 30 November 2023, RM plc was subject to
the UK Corporate Governance Code 2018 (‘Code’), which
was published by the Financial Reporting Council in July
2018 (available at www.frc.org.uk). The Board aims for the
Group to meet and exceed the standards of the Code and
to foster a culture of open and honest communication and
constructive challenge throughout the organisation. There
is a governance structure of checks and balances, a proper
division of responsibilities and active consideration given to
all relevant stakeholders. The Board sees this as a positive
contributor to effective business operations.
This Corporate Governance Report incorporates the
relevant sections of the reports of the Board Committees.
It summarises how the provisions of the Code have been
applied and how the Board and Board Committees have
fulfilled their responsibilities during the year. It sets out how
RM’s approach to corporate governance supports the
Company’s strategy, the Board and its Committees’ key
focus areas during the year.
Governance
On behalf of the Board, I confirm that the Company has
applied the principles and complied with the provisions
of the Code throughout the 12-month period ended
30 November 2023.
The table below sets out where the relevant content on
the application of the Code’s principles can be found in
this Annual Report.
Composition
With effect from 16 January 2023, Mark Cook was appointed
as CEO, replacing Neil Martin who resigned from the Board
on 1 April 2023. In addition, Simon Goodwin was appointed as
CFO on 29 August 2023 replacing interim Chief Financial
Officer, Emmanuel Walter. For details of other appointments
and further information on how the Board managed
succession during the past year, see the Nomination
Committee Report.
Effectiveness
During the year the Board dealt with a number of topics
that required additional time and engagement including
the sale of the RM Integris and RM Finance business and
the decision to cease trading in the Consortium business.
The Board has performed well and this was reflected in
the feedback during the Board evaluation this year.
Further information is contained in this Corporate
Governance Report.
Stakeholders
RM believes strongly that the long-term success of the
Company is linked to ensuring accountability, transparency
and fairness in dealings with stakeholders. The relationships
the business has with these stakeholders has been important,
particularly during a year of transformation. You can read
more about RM’s engagement with stakeholders, including
shareholders, on pages 79 to 81.
Helen Stevenson
Non-Executive Chair
14 March 2024
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
1. Board leadership and company purpose
Section and page
A: Leadership, long-term success, value
generation and societal contribution
B: Purpose, values, strategy and culture
C: Resources and controls
D: Stakeholder engagement
E: Workforce policies and practices
Purpose, Values and Culture - pages 4 to 5
Throughout the Sustainability Report on pages 42 to 47, Corporate Governance
Report on pages 70 to 125 and Remuneration Committee Report on pages 96 to 118,
there are descriptions of how the long-term sustainable success of the Company
and its contribution to wider society is promoted and shareholder value generated.
Purpose, Values and Culture - pages 4 to 5
Major Activities of the Nomination Committee - pages 84 to 87
Resources - page 17
KPIs - pages 20 to 25
Managing our Risks - page 36
Internal Controls - pages 82 to 83
Review of Risk Management - pages 36 to 41
Stakeholder Engagement - pages 79 to 81
Section 172 Statement - page 67 and 79
Remuneration Policy and Stakeholder Engagement - page 79
Whistleblowing - page 65
Employee Stakeholder Engagement - page 79
2. Division of responsibilities
Section and page
F: The Chair
G: Board composition and division
of responsibilities
H: Role and time commitment of
Non-Executive Directors
Board of Directors - pages 70 to 71
Roles - pages 75
Board Evaluation - pages 76 to 77
Board of Directors, Board Committees - pages 70 to 71
Roles - pages 74 to 75
Directors’ Conflicts of Interest and Independence - page 77
Board of Directors - pages 70 to 71
Board Attendance - page 76
Committee Attendance - pages 84, 88, 117
Roles - pages 75
Directors’ Conflicts of Interest and Independence - page 77
I:
Board function and the Company Secretary Board of Directors - pages 74
3. Composition, succession and evaluation
Section and page
J: Board appointments and
succession planning
K: Board and committee skills,
experience and knowledge
L: Board evaluation
Nomination Committee Report - pages 84 to 87
Board Diversity and Inclusion Policy - page 78
Board Tenure - page 76
Board Composition - pages 70 to 71
Board Evaluation - page 76
4. Audit, risk and internal control
Section and page
M: Internal and external audit
independence and effectiveness
N: Fair, balanced and understandable
assessment of position and prospects
O: Risk management, internal control
framework and principal risks
Internal Controls - pages 82 to 83
Audit and Risk Committee Report - pages 88 to 95
Statement of Directors’ Responsibilities - pages 124 to 125
Managing our Risks - page 36
Principal Risks and Uncertainties - pages 38 to 41
Internal Controls - pages 82 to 83
5. Remuneration
Section and Page
P: Remuneration policies and practices
Q: Executive remuneration
R: Independent judgement and discretion in
remuneration outcomes
Remuneration Committee Report - pages 96 to 118
Remuneration Committee Report - pages 96 to 118
Remuneration Policy, Stakeholder Engagement - page 79
Discretion - page 98
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
Board of Directors
The Board consists of the Chief Executive Officer, Chief
Financial Officer and five Non-Executive Directors including
the Chair. The Chair was considered independent on
appointment. The Board considers Richard Smothers,
Christopher Humphrey, Carolyn Dawson and Jamie Murray
Wells, to be independent of the management of the
Company and free from any business or other relationship
which could materially interfere with the exercise of their
independent judgement (see further discussion in the
Directors’ Conflict of Interests and Independence section
below). The Directors bring to the Board a wide range of
financial and business skills and extensive experience and
knowledge suited to the nature of the Company.
The Board of Directors meets regularly on a formal basis
and holds additional ad hoc meetings as necessary to
review strategic, operational and financial matters, including
proposed acquisitions and divestments. It has a formal
schedule of matters reserved to it for decision-making.
Those matters include the approval of interim and annual
Financial Statements, the annual budget, significant Stock
Exchange announcements, significant contracts and capital
investment. It also reviews the effectiveness of the internal
control systems and principal risks of the Group. The Chair
holds meetings with the Non-Executive Directors without
the Executive Directors present in circumstances where
it is considered appropriate to do so.
A forward agenda for the Board is maintained to ensure
that all necessary and appropriate matters are covered
during the year. As part of the Board pack prepared for
each regular meeting, the Board receives monthly
management accounts and operational reports from
the CEO, CFO and reports or presentations from other
members of the Executive and the Group. The Board is
also provided with specific reports on key areas and
projects and informed of any key developments or issues
that require their consideration. These reports and updates
cover a wide range of matters in order to ensure that
policy, practices and behaviour in the Group are aligned
with the Company’s purpose, values and strategy and any
issues that may give rise to concerns are brought to the
attention of the Board. During the year, reports were
presented on various matters including shareholder
feedback and the disposal of the RM Integris and Finance
business and the impact of the decision to cease trading
in the Consortium business. Further information on other
reports it received are in the Stakeholder Engagement
7474
report below. The Board requests further information on
any matter that they consider relevant, which may include
ongoing updates, assurance as to the proposed actions
to resolve such matters and information on corrective
actions taken.
Any concerns about the operation of the Board or the
management of the Company that cannot be resolved
are recorded in the Board minutes.
All Directors have access to the advice and services of the
Company Secretary, and all the Directors are able to take
independent professional advice, if necessary, at the
Company’s expense.
All Directors are appointed for a defined term subject to
annual re-election by shareholders at each Annual
General Meeting.
Board committees
The Board has delegated authority to four Committees:
Audit and Risk, Remuneration, Nomination and
Environment, Social and Governance (ESG) Committee.
The ESG Committee was constituted last year at which
time the Audit Committee was also reconstituted as the
Audit and Risk Committee. The Executive Directors are not
members of these Committees. The Terms of Reference
for each Committee setting out their responsibilities are
available at rmplc.com. For each Committee, information
on their composition and activities is provided in the
respective Committee reports.
The Board
The Board is collectively responsible for the sustainable
long-term success of the Group. The key roles of the
Board are:
•• Setting the strategic direction of the Group to promote
the long-term sustainable success of the Company,
generate value for shareholders and contribute to
wider society
•• Overseeing implementation of the strategy and ensuring
that the Group is suitably resourced to achieve its
objectives and effectively engages with stakeholders
•• Overall responsibility for the management of risk and for
reviewing the effectiveness of the framework for internal
control and risk management
RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
Chair
•• Responsible for overall leadership and governance of
the Board, effective contribution from NEDs and ensures
constructive relations between Executives and NEDs
•• Sets the agenda, ensures adequate time is available for
discussion of agenda items, promotes a culture of
openness and debate at Board meetings and ensures
Directors receive accurate, timely and clear information
Remuneration Committee
•• Reviews and recommends the framework and policy
for the remuneration of the Executive Directors and
senior executives
•• Reviews workforce remuneration and related policies
•• Considers how the remuneration policy supports the
business strategy of the Group
•• Provides support and advice to the CEO
•• Ensures effective communications with shareholders
Nomination Committee
•• Reviews the structure, size and composition of the
Board and its Committees
Senior Independent Director
•• Deputises for the Chair and acts as intermediary for
•• Identifies and nominates suitable executive candidates
to be appointed to the Board
other Directors, if needed
•• Considers wider aspects of succession planning
•• Meets with the NEDs, without the Chair present when
considered appropriate, and leads the appraisal of the
Chair’s performance
ESG Committee
•• Oversight of the ESG strategy and ensures that it is fit
•• Available to respond to shareholder concerns if not
for purpose
resolved through the normal channels
•• Monitors progress against the ESG strategy and
performance against targets
•• Reviews ESG risks that have been identified and
mitigating actions
Group Chief Executive (CEO)
•• Responsible for the executive leadership of the Group
as a whole and delivering the strategic and commercial
objectives agreed by the Board
•• Leads the Executive management team
•• Maintains and protects the Group’s reputation
•• Ensures the affairs of the Group are conducted with
the highest standards of integrity
•• Builds positive relationships with the
Group’s stakeholders
Non-Executive Directors (NEDs)
•• Share full responsibility for the execution the
Board’s duties
•• Scrutinise and constructively challenge strategic
proposals and hold management to account
•• Offer specialist advice and strategic guidance
•• Monitor the performance of management on an
ongoing basis
Audit and Risk Committee
•• Oversees and monitors the Group’s Financial Statements,
accounting processes and audits (internal and external)
•• Ensures that risks are identified and assessed, and that
sound systems of risk management and internal control
are in place
•• Ensures that the internal audit function has the resources
to perform its function and reviews audit plans
•• Reviews matters relating to fraud and whistleblowing and
reports to the Board
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
Board attendance
The Board had 14 scheduled meetings during the year.
A record of attendance for each Director is set out in the table
below. Additionally, ad hoc meetings were held by the Board
during 2023, topics discussed included the sale of the RM
Integris and RM Finance businesses and extension of the bank
financing facility and covenant positions. Board meetings
were mostly held face-to-face. The Board also approved
a number of matters during the year by written resolution.
Board Meetings
Helen Stevenson
Mark Cook (appointed 16 January 2023)
Simon Goodwin (appointed 29 August 2023)
Chris Humphrey (appointed 7 July 2023)
No. of
meetings held
in the period/
Eligible
to attend
14/14
12/12
5/5
6/6
Richard Smothers (appointed 3 January 2023)
13/13
Carolyn Dawson (appointed 1 November 2023)
Jamie Murray Wells (appointed 1 November 2023)
Patrick Martell (resigned 31 December 2023)
Charles Bligh (resigned 31 October 2023)
Paul Dean (resigned 1 April 2023)
Vicky Griffiths (resigned 6 October 2023)
Neil Martin (resigned 31 March 2023)
1/1
1/1
14/14
12/13
4/4
12/12
5/5
All Directors received papers for all meetings in advance.
When a Director was unable to attend a meeting, they
were given the opportunity to provide comments.
The Board ensures that, on appointment and thereafter,
all Directors have sufficient time to carry out their duties.
No Director should undertake additional appointments
without the prior approval of the Board. No significant
appointments have been undertaken by a Director in the
year ended 30 November 2023.
Board tenure
Details of the tenure of the members of the Board as at the
date of this report are set out in the table below.
Tenure
0-2 years
2-5 years
5+ years
Percentage of Board
86%
14%
0%
Induction
All Directors receive an induction on joining the Board.
Mark Cook, Simon Goodwin, Richard Smothers,
Christopher Humphrey, Carolyn Dawson and Jamie Murray
Wells joined the Board this year and met with all Board
Directors, members of the Executive and other relevant
employees. They received comprehensive resources on
Board activities and Company documents such as
Committee Terms of Reference, Delegation of Authority
and Group structure and received training as required.
Board evaluation
The performance of the Board, each Board Committee and
each Director is reviewed on an annual basis. All Directors
were sent a questionnaire to gather their views across a
number of areas including:
•• the role of the Board and oversight;
•• composition, process and structure;
•• meetings and debate; and
•• each of the Committees.
The feedback from this questionnaire was shared and
reviewed at the Board meeting in January 2024. The
principles and provisions of the Code and Guidance on
Board Effectiveness were covered.
The performance of the:
•• Chair was assessed by the Non-Executive Directors,
led by the Senior Independent Director;
•• Chief Executive Officer was assessed by the Chair, in
consultation with the other Non-Executive Directors;
and
•• Chief Financial Officer was assessed by the Chief
Executive Officer, in consultation with the Chair and
other Non-Executive Directors.
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
As a result of these reviews, it is considered that the
performance of each of the Directors continues to be
effective and that each Director demonstrates sufficient
commitment to their role, enhances the collective
effectiveness of the Board, acts with integrity, leads by
example and promotes the desired culture. Communication
during the year was felt to have continued to be good and
debates were constructive, candid, open and supportive
relationships between Directors were considered to be
positive with a collaborative Board culture and members
worked together to meet objectives. The Board reviewed
its composition and diversity.
The Committees were also reviewed and overall were felt
to function well. The Chair is highly regarded by other
Directors and it was felt that engagement with Shareholders
had improved and the right Board structure was actively
being developed.
Suggestions for improvement were made with regard to:
•• A greater focus by the Board on the ongoing
performance of KPIs during the year;
•• Having more relevant performance metrics for the
Board to assess RM’s performance within the markets
it operates in;
•• Providing more context on the external market at
Remuneration Committee meetings;
•• Shifting the balance further at Board meetings from
short-term priorities (which was critical in 2023) to
longer-term sustainable success; and
•• Building on the succession planning work during 2023
to ensure all key positions are addressed following senior
management appointments towards the end of year.
The improvements suggested in the Board and
Committees evaluation last year were felt to have been
implemented, specifically:
•• Further enhancements to the risk management process;
•• There being more regular presentations to the Board by
Executive Team members in order to give the Board
greater visibility of progress in the business;
•• The engagement of an external remuneration advisor to
support the work of the Remuneration Committee; and
•• Work on succession planning for Board and senior
management (see page 86).
An external facilitated Board evaluation was considered but
it was felt it would not be useful given the number of new
appointments to the Board this year. This would be
reviewed again next year.
Executive Committee
The Executive Committee is chaired by the Chief Executive
Officer. The Executive Committee comprises the Chief
Executive Officer, Chief Financial Officer and other senior
managers within the Group. The Executive Committee
normally meets on a monthly basis to discuss policy and
operational issues. Those issues outside the Executive
Committee’s delegated authority levels set by the Board are
referred to the Board for its decision. Non-Executive Directors
can, on request, attend the Executive Committee meetings.
Directors’ conflicts of interests and
independence
There are procedures in place to identify, authorise and
manage any conflict of interest of any Director with those
of the Company. These procedures have operated
effectively during the year.
Charles Bligh, who resigned from the Board on 31 October
2023, was the CEO of Restore plc, which was a supplier to
RM of scanning and associated services, until 6 July 2023.
The Board believes that, since his appointment, Charles had
constructively challenged matters that came before the
Board and the Nomination Committee, and effectively held
management to account during his tenure. Charles was not
a member of the Audit and Risk Committee and or the
Remuneration Committee during the year. Accordingly, the
Board was satisfied that Charles was a valuable member
of the Board but was not considered independent.
Charles was not involved in any discussions relating to
the use of Restore plc or that specifically affected
Restore’s relationship with RM.
There were no other conflicts of interest identified. None
of the independent Non-Executive Directors nor the Chair
have any personal financial interest in the Company other
than through fees received or as a shareholder. They are
not involved in the day-to-day running of the business and
have no personal conflicts of interest which could materially
interfere with the exercise of their independent judgement.
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
ESG
See the various sections covering environmental, social and
governance matters in the Company’s Sustainability Report
on pages 42 to 47.
Board diversity and inclusion policy
The Board is committed to ensuring appointments to the
Board promote diversity and an inclusive culture so that
it has the range of perspectives, experiences and
backgrounds necessary to support good decision making.
It was reported in last year’s Annual Report that the Board
intended to meet the FCA targets on diversity by end of
November 2024 through succession planning. Despite
diversity being a key area of focus in the recruitment of
new board members during the year, the appointments
did not result in two out of three of the Listing Rule targets
being achieved as the Board needed to balance this alongside
the specific experience requirements such as technology
transformative experience and current technology roles
within education. See table below for more details.
Accordingly, while the Company remains committed to
achieving the two remaining FCA targets on diversity, the
Company is now committed to achieving them by the end of
November 2026. Diversity and inclusion are embraced at all
levels in RM and are reflected in the Company’s culture and
values which will help deliver RM’s strategic objectives.
The Board recognises the following objectives:
Objectives
Aim to achieve:
Action taken
i. female members representing
40% of the total Board
membership;
Currently female Board members comprise of 29% of the Board which has decreased
compared to the previous year due to the CFO position now a member of the board
as opposed to an interim role.
ii. at least one senior Board
The position of Chair is held by a woman and therefore this target has been met.
position is held by a woman;
and
iii. at least one member of the
Board is from a non-white
ethnic minority background.
A focus on diversity in
succession planning and when
seeking to make Board level
appointments.
To consider composition and
diversity as part of its review
of effectiveness in the Board
evaluation.
To make key diversity and
inclusion information about the
Board and senior management
available in the Annual Report.
Currently, there is no Board member from a non-white ethnic minority background.
Diversity has been and will continue to be an area of focus in future Director searches.
Diversity was a key consideration in each of the appointments made this year and will
continue to be for future appointments.
These matters were considered in the 2023 Board evaluation.
Data on diversity within RM under listing Rule 9 Annex 2 is shown on page 62.
The gender diversity at Executive Committee within senior management has improved
from 33% last year to 38%.
Further information including diversity statistics is in the Sustainability Report on page 62.
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
Purpose and culture
The Board is responsible for the Company’s purpose, values
and strategy and for satisfying itself that these and its culture
are aligned. The Board monitors this in various ways:
•• The reviews presented at each Board meeting highlight
matters that show how the Company is pursuing its purpose
and are indicators of the health of the Company’s culture.
This includes metrics and updates on workforce matters
including figures on workforce changes and feedback
from workforce engagement, details of whistleblowing
reports, health and safety statistics on incidents and
performance updates, legal compliance activities, and
reports on any regulatory matters and disputes that
have arisen.
•• During the year, Patrick Martell met with representatives
of the employee group RM Advocates to discuss
employee views on Executive remuneration.
•• The Audit and Risk Committee receives reports from
internal audits of procedure and practices across the
Company providing alerts to issues that could threaten
the Company’s culture.
•• The Remuneration Committee reviews workforce
remuneration policies and practices and assesses their
alignment with the culture and strategy of the Company.
Gender pay reports are reviewed annually to ensure
these are consistent with the Company’s values.
•• The Nomination Committee considers the Group’s diversity
and inclusion strategy, practices and progress to ensure
it reflects the Company’s values.
Stakeholder engagement - Section 172
statement
Engagement with the Company’s key stakeholders is vital
to building a business that provides valued products and
services to its customers, that employees are proud to be
part of and that rewards shareholders.
The Board takes steps to understand the priorities and needs
of stakeholders when setting the Company’s strategy and
when making decisions that are most likely to promote the
long-term sustainable success of the Company for the benefit
of its members as a whole. In doing so, the Board has had
regard to the matters set out in section 172 of the
Companies Act 2006.
Examples of engagement and key initiatives undertaken by
the Board during the year are set out below:
Customers
Customers are central in setting the strategy and direction for
the Company, and this is reflected in the strategic objectives
to ‘Reach more customers’ and ‘Improve share of customer
spend’. The Company is in regular contact with its customers
and strives to better understand their expectations about
the products and services that will help customers deliver
their educational objectives. This includes the range of
products and services RM provides to support teachers in
the classroom and the development of examination and
assessment software that improves the efficiency and
effectiveness of learner assessment. The Board regularly
discusses any issues arising in relation to the Company’s
key customers, the services it provides to them and future
changes to those relationships. The Board further receives
regular updates on new customer wins, significant tender
process updates, customer complaints, presentations from
the divisional MDs about customer experiences, and approves
all major new contracts. This year members of the Board
met with major customers to discuss the formation of new
partnerships and ways of working to meet the customers’
needs. The Board also received a presentation on new
customer propositions and the strategy of the
Assessment business.
To ensure that the business continues to understand the
changing needs of its customers, the Company undertakes
regular UK and global independent market research studies
with its customers and others. This helps the business
understand customer needs, informs RM’s product
development teams of market demands and requirements
and improves the Company’s ability to communicate the
benefits of RM’s products and services to its customers.
Employees
The Board considers workforce treatment and engagement
as a matter of core importance and as key to achieving its
strategic objective to ‘Attract and retain talent’. A number of
processes have been put in place to assist the Board in
monitoring such matters outlined below and in the
Workforce section on pages 59 to 63
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
Shortly after joining, Mark Cook, CEO, continued the process
to engage the workforce through All Company presentations,
held quarterly, sharing strategic focuses by the Board and
financial performance. During these live sessions, employees
are given the opportunity to ask questions and share their
views on the business with an Executive audience present.
Feedback is provided to the Board to provide greater
awareness of workforce sentiment.
During 2023, the Board supported a rework of the annual
employee engagement survey, which now sees a fuller, more
comprehensive set of questions to attain detailed feedback
on life at RM. The results are presented to the Board to home
in on key areas of improvement with greater clarity and agree
actions with management. An example of this was increasing
the time spent discussing the Company’s strategic initiatives
at quarterly All Company presentations (described above) to
provide greater transparency. The frequency of these surveys
has also changed to become twice-yearly, taking place in
November and May.
Patrick Martell was the designated Non-Executive Director
for workplace engagement during 2023 and was replaced
by Jamie Murray Wells with effect from 1 January 2024. In
this role, Patrick met with groups of employees including
the Senior Leadership Team to hear about and discuss their
experiences of working at RM. He also held meetings with
the Chief People Officer to discuss Executive remuneration
and wider workforce matters, reporting back to the Board on
the outcome of these discussions to help provide an insight
into employee challenges, views and priorities. This feedback
has been helpful in Board discussions and decision-making
in connection with the workforce as well as strategic
business planning.
To continue to support the mental wellbeing of the workforce,
the Mental Health First Aiders continue to operate across RM.
Throughout FY24 the group will receive additional support
from RM as they become an official EDI network, supported
by both RM’s Head of Sustainability and EDI and Head of
Internal Communications. This, paired with our continuing
Employee Assistance Programme provides the workforce
with multiple avenues for support for a range of matters,
personal and professional.
8080
Other actions, which have a direct impact on employees,
taken by the Board during the year include:
•• Approving the Whistle Blowing policy to provide
a mechanism for our people to speak up.
•• Approving the Modern Slavery Statement, supporting
our zero-tolerance policy towards any form of modern
slavery or child labour.
•• Approving the Health, Safety and Environment Policy
Statement, which was published.
Shareholders
The Annual General Meeting is attended by all Board members
and provides an opportunity for shareholders to ask them
questions directly. Each of the Directors are available to
speak with institutional shareholders on request.
During the year, virtual results presentations were held by
the Chief Executive Officer and Chief Financial Officer to
update the market and shareholders on RM’s strategy and
performance. In order to maintain dialogue with institutional
shareholders, the Chief Executive Officer and Chief
Financial Officer are available to speak with shareholders
following interim and final announcements
of results, and otherwise, as appropriate.
The Chair has reached out to shareholders and held a
number of introductory meetings. She has also engaged
with shareholders following announcements regarding the
appointments of the new Chief Executive and Non-
Executive Directors.
Key shareholder publications include the full and half year
results announcements, trading updates, Board changes
and succession and press releases as well as information
on the RM website.
The Board is kept appraised of the views of major shareholders
and market perceptions by the Chief Executive Officer and
Chair respectively. Following meetings held with shareholders,
its brokers and advisors produce feedback reports which
are shared with the Board. Shareholder feedback this year
has covered performance, strategy, Board constitution and
succession and this forms a part of the discussions at Board
meetings. The Company also receives enquiries from
shareholders during the year on a wide range of subjects
which are addressed by the relevant business executive.
The Board also receives regular updates on shareholder
register changes and analyst communications.
RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
Environment/community
The Company continues to be a trusted and reliable partner
to schools, nurseries and other educational organisations
across the country and increasingly around the world.
Customer expectations regarding environmental considerations
in connection with the goods and services RM provides is
taken into account and has led to or influenced some of the
initiatives discussed on page 46 and is therefore important
to the Company’s strategic objectives to ‘Reach more
customers’ and ‘Improve share of customer spend’.
RM creates substantial social value through the core purpose
to enrich the lives of learners, through the increased focus
on environmental sustainability and the contribution to the
communities in which we operate. These communities’
contributions align to supporting active lives, supporting
education and supporting the environment. The Board
established the ESG Committee last year which reports
directly to the Board on environmental and social initiatives
in accordance with its terms of reference. This includes a
reduction of our carbon emissions by 25% during 2023.
See page 56 for details.
Further information on the activities that RM and its
employees have engaged in over the year to support
communities and in furtherance of its environmental
objectives is set out in the Sustainability Report.
Suppliers
RM recognises the importance of its suppliers within its
supply chain and collaborates closely with our key vendors.
From a governance perspective, review meetings are held
with strategic suppliers across the Group with the aim of
managing performance, identifying improvement
opportunities and minimising risk.
Internally, Procurement resources are organised by division,
with separate Procurement and Supplier Management Teams
aligned with divisional supply chains. In addition, Group
Procurement support the Corporate Services supply chain
plus cross-divisional Procurement activity. All Procurement
is governed and authorised via RM’s Delegation of Authority
Schedule meaning that significant supplier contracts require
Board approval.
RM continued to work with Sedex, a leading ethical trade
membership organisation platform, during the year. Suppliers
pay a small annual fee and are required to complete a
self-assessment annually covering labour, health and safety,
and ethics and environment. Responses are reviewed and a
risk rating is given across each of the four areas. In addition,
supplier audits were undertaken on higher risk suppliers,
e.g. in the Far East, with only a couple of minor issues being
identified, which were immediately resolved. A Modern Slavery
Working Group has been set up to include representatives
from across the business with the objective of ensuring that
modern slavery risks, are managed, monitored and mitigated
wherever possible. The Board received a report on this and
approved the Modern Slavery Statement 2023, which is
available on the Company’s website:
www.rm.com/anti-slavery
In some jurisdictions, RM partners with local businesses to
support local customers and provide a more locally orientated
service. The Company works closely with such partners to
understand the local market and considers how RM’s products
could benefit potential customers in that market by
working collaboratively.
The Board reviews and discusses the six-monthly payment
practices reports for all subsidiaries; the figures are available
to view at Companies House.
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
Internal control
The Company maintains a system of internal control which
provides reasonable, not absolute assurance against material
misstatements or loss, as it is designed to manage rather than
eliminate the risk of failure to achieve business objectives.
We recognise RM operates in a competitive market that can
be affected by factors and events outside
its control. Details of the main risks faced by the Group are
set out in the 'Principal Risks and Uncertainties' table in the
Strategic Report. (Refer to page 38 to 41)
The Group established an ongoing process for identifying,
evaluating, and managing risks.
The key features of our system of internal control include:
Corporate
governance
Our governance framework sets a clear division of responsibilities of the Board members. A table
confirming the extent to which authority is delegated from the Board to its Executive Directors
and operating Divisions is published on the Company’s intranet.
Financial reviews
and planning
A regular review of actual results and variances analysis against prior periods and forecasts,
carried out at the Divisional and Group level. The financial planning process with an annual
budget approved by the Board. The rolling forecasts are prepared monthly and presented to
the Board at monthly Board meetings.
Organisational
structure
IT controls
Employee
engagement
The clear and transparent organisational structure with reporting lines defined within our HR system.
Most financial transactions are recorded and, where required, approved utilising a system automated
workflow. Data transfers between our systems are either automated or imported with minimal
manual intervention to maintain the integrity of the data.
The inherent internal control weakness is reliance on off-system calculation for revenue recognition
for the Assessment Division. We closely monitor these calculations, including input and output.
The calculations of provisions and adjusting items requiring management judgements and estimates
are closely monitored by Chief Financial Officer and the Audit and Risk Committee. The off-system
model and associated governance process was improved during the year.
The Group has established controls and procedures over the security of data held on the
systems, including business continuity arrangements.
Staff are aware of the delegated authority limits set by the Board and confirm their understanding
of our internal policies which are contained on our Group intranet and in our Code of Conduct.
Staff have annual performance reviews with any training requirements identified and agreed
within six months. The Group operates a whistleblowing policy which includes access to an
independent helpline for anonymous reporting of concerns (see page 65).
Treasury and tax
procedures
Treasury is controlled by the Chief Financial Officer and Treasurer. All transactions are checked
and monitored. All complex or large transactions are discussed in advance with the Board and
Executive Directors.
The tax manager maintains the UK and foreign jurisdiction tax compliance (except Indian shared
services operations) and the tax risk register.
The outsourced internal auditor, Grant Thornton, perform various assurance reviews as part of
the annual Internal Audit Plan which is prepared by the Head of Internal Controls & Internal Audit
and reviewed by the Group Financial Controller and Chief Financial Officer before submission to
the Audit and Risk Committee for approval.
The implementation of recommendations arising from the internal audit reviews are monitored
by the Audit and Risk Committee.
Internal audit
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RM plc Annual report and financial statements 2023 Corporate governance Corporate governance report continued
The Audit and Risk Committee is regularly updated on the
internal control effectiveness, remediation plans and progress
made against these plans. Both the Board and the Audit and
Risk Committee have reviewed the operation and effectiveness
of this framework of risk management and internal control
for the period and up to the date of approval of the Annual
Report. In addition to the Risk Management and Internal
Audit quarterly Board status reports and presentations, the
Audit and Risk Committee Chair conducted working
meetings with management to review internal control
activities undertaken by management.
Management acknowledges that there remains a
requirement to improve internal financial controls. Reviews
were commissioned to be performed by Grant Thornton
covering internal controls and processes such as balance
sheet reconciliations, supplier statement reconciliations and
Assessment revenue. Several recommendations have been
implemented by management during the second half of the
year to strengthen the internal controls. Additionally, a new
Head of Internal Controls & Internal Audit was appointed
during the year to work with the outsourced internal audit
firm in identifying areas of risk, recommending an audit plan
to the Audit and Risk Committee, and executing the plan.
Following these changes, the Board and Audit and Risk
Committee are satisfied with internal control progression.
Further details are provided in the Audit and Risk
Committee Report on pages 88 to 95.
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RM plc Annual report and financial statements 2023 Corporate governance
Nomination committee report
On behalf of the Board, I am pleased to present the
Nomination Committee Report for the year ended
30 November 2023.
The Nomination Committee
The Nomination Committee (Committee) operates under
terms of reference approved by the Board. These can be
found on the Group’s website at www.rmplc.com.
Roles and responsibilities
The Nomination Committee is responsible for leading the
process for Board appointments, ensuring that plans are in
place for orderly succession to both the Board and the
Executive and overseeing the development of a diverse
pipeline for succession.
The Committee’s responsibilities include:
Committee membership and attendance
The Nomination Committee during the year ended 30
November 2023 was comprised of Non-Executive Directors
and the Chair of the Board as detailed below:
Board composition
Evaluating the size, structure and composition (including
the balance of skills, experience, knowledge, independence
and diversity) of the Board and making recommendations
to the Board with regard to any changes.
Helen Stevenson (Chair)
Richard Smothers – appointed 3 January 2023
Christopher Humphrey – appointed 7 July 2023
Jamie Murray Wells – appointed 1 November 2023
Carolyn Dawson – appointed 1 November 2023
Patrick Martell – resigned 31 December 2023
Vicky Griffiths – resigned 6 October 2023
Paul Dean – resigned 1 April 2023
Charles Bligh – resigned 31 October 2023
The other Directors attend meetings as and when required
and by invitation.
Succession planning
Ongoing succession planning and appointment procedures
for Board and Executive level appointments.
Appointment process
Leading the process for Board appointments and making
recommendations to the Board.
Sufficient time
Assessing whether Directors can commit sufficient time
to fulfil their responsibilities.
The Nomination Committee held four scheduled meetings
during the period and other ad hoc meetings. Attendance is
set out below.
Diverse pipeline
Overseeing the development of a diverse pipeline for
succession for the Board and Executive and monitoring the
impact of diversity initiatives across the Company.
Helen Stevenson
Christopher Humphrey
Richard Smothers
Vicky Griffiths
Patrick Martell
Jamie Murray Wells
Carolyn Dawson
Paul Dean
Charles Bligh
8484
No. of meetings held in the
period/Eligible to attend
4/4
1/1
4/4
4/4
4/4
0/0
0/0
2/2
4/4
Effectiveness
To report to the Board on how it has discharged its
responsibilities.
Major activities of the Nomination Committee
During the year, the following key activities were
undertaken by the Committee:
•• The recommendation for reappointment at the Annual
General Meeting of all Directors standing for re-election
based on the evaluation of the Board and its Committees.
•• Initiating succession planning for Executive Director and
other senior management roles.
•• The search for:
– a new CEO, which was led by the Chair;
– a new CFO, which was led by the Chair; and
– four independent Non-Executive Directors, which
was led by the Chair.
RM plc Annual report and financial statements 2023 Corporate governance Nomination committee report continued
All members of the Committee were involved in each
recruitment process, including the determination of the
required skills, knowledge and experience for each role
and offer made to the preferred candidate.
All preferred candidates were interviewed initially by the
Director leading the process, and then met with all members
of the Committee and the other Board members. A thorough
due diligence and referencing process was conducted for
the preferred candidate for each role.
Candidates were assessed against the required skills,
knowledge and experience determined for each role. The
benefits of diversity, independence and ability to devote
sufficient time to carry out the role were also considered in
each process. Executive recruitment search firms engaged
were briefed to provide a diverse range of candidates.
The Committee made recommendations to the Board
in respect of each appointment for the Board’s approval.
Notwithstanding the above, Neil Martin was not involved
in the Committee meetings involving the appointment of
a new CEO.
The following executive recruitment search firms were
engaged as part of the recruitment process:
•• H.I.E.C. was engaged for the search for the new CEO;
and
•• Teneo People Advisory were engaged for the search
of four Non-Executive Directors during the year.
H.I.E.C and Teneo People Advisory do not have any connection
with the Company or individual Directors (other than in
relation to similar previous appointments).
Appointment of CEO
The search for a new CEO was supported by and external
search agency, H.I.E.C., who were selected after a thorough
selection process. A comprehensive international search
process was undertaken to identify and onboard a significant,
transformational and proven CEO who was readily available
and who could deliver value to the business, its employees,
customers and shareholders. Having extensive experience
in leading organisations through transformation to growth
was a key requirement ascertained by the Committee.
In total, 166 potential candidates were identified, 44 candidates
were contacted, with 14 undergoing rigorous multi-stage
interviews with HIEC. This included a mix of female and
male candidates.
Eight candidates underwent a first interview with RM, with
further stages included until one preferred candidate (Mark
Cook) was unanimously recommended by the Committee
to the Board for appointment, with effect from 16 January
2023. Mark has a strong background in business process
and technology and brings extensive experience in business
transformation and creating shareholder value.
Appointment of CFO
The CFO recruitment was managed through a direct process,
with eight candidates sourced through RM networks (five
external and three internal candidates) to identify and onboard
an experienced and proven CFO with transformational
experience and who could deliver immediate and
long-term value.
Four of the candidates were formally interviewed through
a number of stages, and two candidates met the Chair and
Chair of the Audit Committee.
A preferred candidate, Simon Goodwin, was identified and
met the remaining Non-Executive Directors. The Committee
recommended Simon’s appointment noting that he had
played a key role in strategic turnaround in a previous
position, along with having a strong financial background.
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RM plc Annual report and financial statements 2023 Corporate governance Nomination committee report continued
Further details on the skills, knowledge and experience of
each of the new appointments are set out below and in
their biographies on pages 70 to 71.
Succession planning
A review of the Board’s composition and skillset was conducted
during the year, as changes to the Board were planned for
and decisions made. In doing so the Committee assessed
the skills, knowledge and experience that new Board members
would be required to have, as detailed above, to strengthen
the capabilities of the Board in line with the needs of the Group.
In addition to the appointment of a new CEO and CFO, the
Executive Committee has been strengthened through the
external hire of a new Chief Technology Officer, a new
Chief People Officer and a new Company Secretary.
Following these appointments, succession planning was
undertaken and involved the creation of a senior leadership
team, made up of existing management roles in the Group,
that sits below the Executive Committee. High performers
and those with great potential were then identified as future
leaders. As at 30 November 2023, a potential successor
had been identified for all but two members of the
Executive Committee and a plan was in place for this
exercise to be completed during 2024.
Diversity
The Board policy for Diversity was reviewed last year and
amended to reflect the new Listing Rule targets which, as
stated in last year’s Annual Report, it intended to achieve by
November 2024. These targets were a key area of focus in
the recruitment of new board members during the year and,
accordingly, search agencies were requested to provide a
diverse pool of candidates in terms of both gender and
ethnicity. However, these appointments did not result in
two out of three of the Listing Rule targets being achieved
(see Corporate Governance Report, page 78) as the Board
needed to balance this alongside the specific experience
requirements such as technology transformative
experience and current technology roles within education.
The Board remains committed to promoting broader
diversity and to achieve each of the Listing rule targets in
the medium term.
Non-Executive Director appointments
The appointments of Richard Smothers (3 January 2023),
Christopher Humphreys (7 July 2023), Carolyn Dawson
(1 November 2023) and Jamie Murray Wells (1 November
2023) were made after a thorough selection process
supported by an external search agency, Teneo People
Advisory, who had demonstrated to the Committee a solid
understanding of the briefs and skills requirements. For
each appointment, interviews were conducted by Teneo
People Advisory followed by RM before the Committee
recommended a preferred candidate to the Board.
In respect of Richard Smothers’ appointment, having relevant
and recent financial experience was fundamental in order
to take up the role of Chair of the Audit Committee upon
Paul Dean’s retirement. Richard is currently CFO at Greene
King Limited having previously held a number of other
senior financial positions.
In respect of Chris Humphrey’s appointment, listed company
experience including other non-executive director roles along
with prior senior leadership positions at plc’s were identified
as key requirements in order to enhance the Board's skillset
in these areas. Chris is currently Chair of AIM-listed Eckoh
plc and has also served as Senior Independent Director and
Audit Chair at AVEVA Group plc, Senior Independent Director
at Videndum plc, and Non-Executive Director at SDL plc.
Prior to the appointments of Carolyn Dawson and Jamie
Murray Wells, the Committee identified, following a review
of the Board’s skillset, a need for the following skills and
experience:
•• Current or very recent executive experience of
technology changing consumer experiences; and
•• Credible experience of building consumer-facing
digital products.
Carolyn Dawson brings significant experience in the
technology and education sectors. She is currently CEO of
the Founders Forum Group, the business services group for
entrepreneurs, supporting businesses at the forefront of the
tech ecosystem. Jamie Murray Wells brings leading digital
product expertise to the Board, having worked since 2013 for
Google, where he has held roles defining new platforms and
ecosystems, including as Head of Digital Platform Experiences
and Head of Extended Reality (XR) Platform Enablement.
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RM plc Annual report and financial statements 2023 Corporate governance Nomination committee report continued
As mentioned above, there were three new appointments
to the Executive Committee excluding the CEO and CFO;
two out of three of these appointments were female and,
accordingly, female representation of the Executive Committee
increased to 38% as at 30 November 2023 (2022: 33%).
The Group’s management has also been strengthened
through a number of external appointments and internal
promotions this year that have maintained diversity. When
search firms are used for such appointments, they are also
briefed to provide a diverse range of candidates. There is a
good gender balance across these roles (see the Our People
section in the Sustainability Report on page 59 for more
information on diversity).
Diversity and inclusion in the workforce potentially create
a better environment for innovation and service excellence
and achieve the strategic goals.
See page 62 of the 'Our People section' of the Strategic
Report for further information and details of RM’s policy
on equal opportunities and how it supports strategy.
Board and committees evaluation
An evaluation of the effectiveness of the Board and its
Committees was carried out in the year. For details including
the outcomes and actions taken, see page 76.
Board composition
The Board reviews the composition of the Board and the
skills, knowledge and experience of its members, taking
into account tenure and diversity. Information on the skills,
experience and knowledge of each Director is set out below
and on page 70 to 71 (Board of Directors). The Committee
considers the current Board membership provides the right
mix of skills, knowledge and experience.
Board Skills, Knowledge
and Experience
Helen
Stevenson
Mark
Cook
Simon
Goodwin
Chris
Humphrey
Richard
Smothers
Carolyn
Dawson
Jamie
Murray Wells
Independence
Governance, Risk &
Regulatory
Technology
Digital product
management
Finance
CEO & Leadership
Experience
Education sector
M&A/Restructuring
International
Stakeholder/IR/IP
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
The Board had one Non-Executive Director, Patrick Martell,
who was nearing the tenth anniversary of his appointment
prior to his resignation effective 31 December 2023. In light
of the significant number of board changes in the last two
years, the Committee considered balancing new skills with
Board stability and agreed to extend the term of Patrick’s
appointment as a Non-Executive Director by one year to
31 December 2023. The Board has noted that, in discharging
his duties over the past ten years, Patrick has demonstrated
role model independence in his approach and in his
thinking. Accordingly, the Board was satisfied that Patrick
remained independent until his retirement, notwithstanding
his tenure.
Helen Stevenson
Chair of the Nomination Committee
14 March 2024
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RM plc Annual report and financial statements 2023 Corporate governance
Audit and Risk Committee report
On behalf of the Board, I am pleased to present the Audit
and Risk Committee Report for the year ended 30
November 2023.
The Audit and Risk Committee
The Audit and Risk Committee (Committee) operates under
terms of reference approved by the Board. These can be
found on the Group’s website at www.rmplc.com.
Committee membership and attendance
The Committee during the year ended 30 November 2023
comprised:
•• Paul Dean – Chair to 29 March 2023, until his resignation
from the Board on 1 April 2023
•• Richard Smothers – appointed 3 January 2023,
Chair from 29 March 2023
•• Vicky Griffiths – resigned 30 September 2023
•• Patrick Martell – resigned 31 December 2023
•• Christopher Humphrey – appointed 7 July 2023
•• Jamie Murray Wells – appointed 1 November 2023
•• Carolyn Dawson – appointed 1 November 2023
All of the above were independent Non-Executive
Directors. The Group considers that Richard Smothers has
significant recent and relevant financial experience, as
further described in the Directors’ Biographies section of
this Annual Report.
To encourage effective communication, in addition to the
above members, the Board Chairperson (Helen Stevenson),
the Chief Executive Officer (Mark Cook), the Chief Financial
Officer (Emmanuel Walter to 29 August 2023 and Simon
Goodwin thereafter), Charles Bligh (Non-Executive Director
until 31 October 2023), Group Financial Controller (Jo
Bridgman to 29 March 2023, Richard Welfare from 3 July
2023) and other management are invited to attend the
Committee meetings as appropriate.
The Committee met four times during the period.
Attendance is set out below. All of these meetings were
part of the regular schedule of meetings set out in the
Committee’s Terms of Reference. These meetings are
planning around the Company’s financial calendar.
Paul Dean
Richard Smothers
Vicky Griffiths
Patrick Martell
Christopher Humphrey
Jamie Murray Wells
Carolyn Dawson
No. of
meetings held
in the period/
eligible to
attend
2/2
4/4
4/4
4/4
2/2
0/0
0/0
Roles and responsibilities
The Committee is responsible for carrying out the audit
functions as required by DTR 7.1.3R and assists the Board in
fulfilling its oversight responsibilities in respect of the
Company and the Group. The Committee’s responsibilities
include:
Financial reporting
To review the reporting of financial and other information
to the shareholders of the Company and to monitor the
integrity of the Financial Statements, including the
application of key judgements and estimates and to ensure
their application is presented in a fair, balanced and
understandable manner.
Risk management, internal control and compliance
To review and assess the adequacy of the systems of
internal control and risk management, and monitor the risk
profile of the business.
Internal audit
To approve the internal audit plan, review the effectiveness
of the internal audit function, review all significant
recommendations, and ensure they are addressed
appropriately and in a timely manner.
External audit
To review the effectiveness and objectivity of the external
audit process, assess the independence of the external
auditor and ensure appropriate policies and procedures are
in place to protect such independence, to be responsible
for the procedure for the selection of the external auditor
and recommend their appointment.
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RM plc Annual report and financial statements 2023 Corporate governance Audit and Risk Committee report continued
Effectiveness
To report to the Board on how it has discharged its
responsibilities. Committee meetings have formal agendas,
which cover all of the areas of responsibility set out in the
Committee’s Terms of Reference and also include an
evaluation of the Committee. These agendas include
meetings with the external auditor without Executive
Directors or managers of the Company present.
Financial reporting
Financial statements
The Committee reviewed the form and content of the
Annual Report and the interim results prior to their
publication to provide assurance that the disclosure made
in the Financial Statements was properly set in context.
The Committee reviewed and considered the following areas:
•• The methods used to account for significant or unusual
transactions where different approaches are possible.
•• Whether the Group has followed appropriate accounting
standards and made appropriate estimates and
judgements, taking into account the views of the
Company’s auditor.
•• The consistency of, and any changes to, accounting
policies both on a year-on-year basis and across the
Group.
•• The consideration of errors and the restatement of
financial information related to prior years.
•• The clarity of disclosure in the Company’s financial
reports.
•• The supporting assumptions and considerations behind
the adoption of the statements relating to going concern
and financial viability.
•• Management’s progress in remediating control
deficiencies.
•• Whether the Company’s financial report is fair, balanced
and understandable.
As part of this process the Committee received reports
from the Company’s management and the external auditor.
The external auditor provided her audit opinion along with
audit findings that were of significance in relation to the
audit of the annual Financial Statements. The Committee
reviewed these reports with the external auditor.
The significant areas of judgements and estimates identified
by the Committee, in conjunction with management and
the external auditor, together with a number of areas that
the Committee deemed significant are set out below:
Matter considered: financial reporting impact
of decision to cease trading in Consortium
(new risk)
On 24 November 2023 the Company announced its
decision to cease trading of the Consortium business,
which is part of the RM Resources division. As the business
was still trading on 30 November 2023, it did not meet the
criteria to be classified as a discontinued operation under
IFRS5, but nonetheless the announcement has several
implications on the FY23 financial statements which involve
a high degree of judgement or estimation, and include:
•• Individual testing of fixed assets (including right of use
lease assets, fixtures and fittings and intangibles) for
impairment – assets that will continue to be used by the
remaining TTS business need to have their carrying value
supported by the future cash flows of that business unit,
and residual values to be estimated for those assets that
will be abandoned or sold;
•• Carrying value of inventory and receivables – inventory
should be carried at the lower of cost and net realisable
value, with an estimation of realisable value of items to
be sold through flash sales to wholesalers, and an
assessment of expected credit loss assumptions in light
of the closure announcement will be required;
•• Goodwill allocation - as noted in the 'carrying value of
goodwill and intangibles' matter below, the decision by
management to separately monitor the results of the
Consortium and TTS brands in June 2023 triggered an
allocation of goodwill, previously monitored at the RM
Resources level, between the TTS and Consortium cash
generating units. Goodwill allocated to TTS will require
supporting via the value in use of the business, whereas
goodwill allocated to Consortium has been written off
following the announcement of the closure of that
business;
•• Segmental reporting – as noted above, the decision by
management to separately monitor the results of
Consortium and TTS in June 2023 provided the trigger
to split the segmental reporting; and
•• Adjusting items – following the annoucement of the
closure of the Consortium business, restructuring costs
associated with the closure were recognised as adjusting
items in the income statement.
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RM plc Annual report and financial statements 2023 Corporate governance Audit and Risk Committee report continued
Committee action:
The Committee has reviewed and challenged papers which
set out the approach to the above items and supporting
detail, discussed judgements with management, and
considered the conclusions of the external auditor.
Outcome:
The Committee is satisfied that the financial reporting
impact of the decision to cease trading of the Consortium
business has been appropriately reflected and disclosed in
the Annual Report and Accounts.
Matter considered: long-term revenue
recognition
In long-term customer contracts the arrangements are
often complex, particularly with respect to variable
consideration and service performance measures.
These contracts can involve significant judgements that
may impact the recognition of revenue including:
•• The identification of performance obligations included
within the contract.
•• The allocation of revenue to performance obligations
including the impact of variable consideration.
•• The combination of goods and services into a single
performance obligation.
•• The measurement of progress for performance
obligations satisfied over time.
•• The consideration of onerous contract conditions and
associated loss provisions.
For RM there is significant estimation with respect to the
variable revenues based on the number of exam scripts in a
number of key contracts that determine the transaction
price over the life of the contract.
Committee action:
The Committee received papers which included bi-annual
updates on the key judgements and estimates arising from
the more complex and significant contracts in respect of
IFRS15, which in the period have related to Assessment
contracts. The Committee is also provided with a bi-annual
update on any significant new contracts throughout the
business and the types of performance obligations and
judgements identified in these contracts.
During the year, as part of the ongoing controls
improvement project, management developed and
implemented a new revenue recognition model which,
together with an overarching governance framework, was
applied to the nine largest contracts in Assessment. During
FY24 this model will be rolled out further to cover all
significant contracts by total value.
Outcome:
The revenue recognition policy includes the disclosure of
the significant judgements and estimates in relation to its
application and the Committee is satisfied that these have
been properly disclosed. The Committee is satisfied that
the disclosures given within the accounts are sufficient to
gain a proper understanding of the methodology of
accounting for revenue across the Group, including the
recognition of deferred income at the balance sheet date.
Matter considered: going concern review
process
The Committee review and consider the appropriateness of
the preparation of the accounts on a going concern basis.
There was a focused prominence on this year’s review as a
result of the forecast breach of EBITDA covenant
announced in the half-year reporting, which resulted in
waivers being granted by lenders for the quarters ended 31
August 2023 and 30 November 2023, and the
commencement of an amend and extend exercise on the
facilities which has now concluded.
Committee action:
The Committee reviewed papers that outlined a base case
forecast with associated cash flows which was aligned to
the previously approved three-year budget noting latest
forecasts. A set of scenarios were then assessed and
applied to this forecast to establish a reasonable worst-case
scenario with associated sensitivities to assess the impact of
these scenarios occurring concurrently. The resulting cash
flows were considered against the new covenant positions
agreed with the facility lenders for the 12-month outlook
period required.
Outcome:
The Committee assessed that a thorough process had
been adopted and were satisfied no material uncertainties
existed, and therefore concluded that it could recommend
that the Company can continue to adopt a going concern
basis of accounting in preparing the Financial Statements.
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RM plc Annual report and financial statements 2023 Corporate governance Audit and Risk Committee report continued
Matter considered: carrying value of goodwill
and intangibles
The Group carries significant asset balances in respect of
goodwill and intangible assets related to acquisition activity.
The Group has also recognised intangible assets primarily
associated with its own IT systems platform programme
and selected customer funded intangible software development.
In addition, the parent Company carries a material balance
of investment in subsidiaries within its Financial Statements.
The impairment assessment requires the application of
judgement concerning future prospects and forecasts.
This judgement requires an assessment of Group Weighted
Average Cost of Capital and the expected cash flows of the
Group at a cash-generating unit (CGU) level. The cash flows
used in this assessment are aligned to those presented and
approved in the Group budget process and included in the
going concern assessment.
Management’s decision to review the results of the
Consortium and TTS brands separately, taken in June 2023,
represented a trigger to assess goodwill. Specifically,
goodwill that was previously monitored as a group of CGUs
representing RM Educational Resources Limited was
required to be split. Following the announcement of the
closure of the Consortium business in November 2023, the
goodwill component relating to Consortium was impaired,
and the intangible assets representing the IT systems
platform associated with that business were also impaired.
Committee action:
The Committee has reviewed the robustness of the
impairment model and challenged the appropriateness of
assumptions used to calculate and determine the existence
of impairment.
Outcome:
The Committee is satisfied the impairment of goodwill and
intangibles that is recognised in these statements has been
appropriately calculated and disclosed.
For goodwill and intangibles not impaired, the Committee
is satisfied this is in line with expectations given the
assessment was based on Board-approved future
projections.
Matter considered: adjusting items
The Group reports adjusting items which are used by the
Board to monitor and manage the performance of the Group,
in order to ensure that decisions taken align with the
Group's long-term interests. Adjusting items are identified
by virtue to the size, nature or incidence at a segment level.
Committee action:
The Committee reviews and challenges papers that set out
adjusting items and supporting detail associated with those
adjustments. Items that are new in year were discussed
including impairments resulting from the announced
decision to cease trading of the Consortium business, and
associated restructuring costs.
Outcome:
The Committee is satisfied that the presentation of adjusting
items have been made appropriately in respect of size,
nature and incidence, and believes the disclosures in the
Annual Report and Accounts allow the reader to obtain a
good understanding of the nature of the adjustments
made.
Conclusion of financial reporting considerations
Management reported to the Committee that they were not
aware of any material misstatements in the Annual Report and
Accounts. The auditor reported to the Committee that they had
found misstatements that required correction and that all material
items were adjusted in the course of finalising the accounts
(including prior year restatements as outlined in Note 33). The
Committee was also satisfied that the significant assumptions
used for determining the value of assets and liabilities had been
appropriately scrutinised, challenged and were sufficiently robust.
The Committee, at the Board’s request, also considered whether
the half-year results and the Annual Report were fair, balanced
and understandable and whether the information provided was
sufficient for the reader of the statements to understand the
Group’s position and performance, business model and strategy.
The Committee reviewed both the narrative and financial
sections of the reports to ensure they were consistent and
gave a balanced view of the performance of the business in
the year and that appropriate weight was given to both
positive and negative considerations. The Committee also
considered whether the half year and full year results
announcements were presented clearly.
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RM plc Annual report and financial statements 2023 Corporate governance Audit and Risk Committee report continued
The Committee considered whether the Annual Report and
Accounts enables readers to understand the Company’s
financial position and prospects, as well as assess its going
concern status and longer-term viability.
External audit
Appointment of external auditor
The Committee recommended, and shareholders approved
at the Company’s Annual General Meeting on 25 May 2023,
the reappointment of Deloitte LLP as Group external auditor.
The Committee are comfortable that the current audit
partner from Deloitte is independent from the Group. This
assessment is based on internal review of relations and
confirmation by the audit firm itself. The Audit and Risk
Committee recommended to the Board (which was
subsequently approved) the reappointment of Deloitte be
put to shareholders for approval at the 2024 AGM.
The Committee will continue to review the auditor
appointment and anticipates that the audit will be put out
to tender at least every 10 years. The Company has
complied with the Statutory Audit Services Order 2014 for
the financial year under review. The last external audit
tender took place in 2020, which resulted in the
appointment of Deloitte. This is Deloitte’s third year as the
Group’s auditors.
Oversight of external audit
The Committee has reviewed the scope and results of the
audit services, the cost, effectiveness and independence,
and objectivity of the external auditor. This includes
discussions with the external auditor in relation to areas of
key focus and ensuring that the external auditor challenges
management appropriately, in particular in relation to
matters that require judgement to be exercised.
The Independent Auditor’s Report sets out the key matters
considered and how these have been addressed by the
external auditor which were discussed with the Committee.
The external auditor also reports on other matters such as
upcoming regulatory changes, control observations and
peer practices.
The Committee did not request additional areas to be
reviewed by the external auditor, other than set out above.
Separately, the external auditor briefs the Committee on
new developments that may affect the Company to help
ensure that the Company is suitably prepared and up-to-
date with all new and forthcoming accounting
developments and disclosures.
Effectiveness of the external audit is conducted by way of
an internal survey of members of the Committee, the CFO
and the internal finance team.
Policy on non-audit work
The Audit and Risk Committee has considered the issue of
the provision of non-audit work by the external auditor and
has agreed a policy intended to ensure that the objectivity
and independence of the external auditor is not
compromised. The policy sets a limit for fees for non-audit
work and states that non-audit work should only be
undertaken by the external auditor where there is a clear
benefit to the Company in doing so. Any significant activity
must be approved, in advance, by at least two Audit and
Risk Committee members.
The Audit and Risk Committee’s policy is to include a cap
on fees for non-audit work of 15% of the annual audit fee
(excluding the interim review). In exceptional circumstances
it may be appropriate for the auditor to carry out non-audit
work in excess of this cap. If this is the case the type of
work and the fee is considered very carefully by the Audit
and Risk Committee in advance of appointing the auditor
to the work and with reference to the FRC’s 2019 Ethical
Standard.
Fees for non-audit work in the period were 75% (£1,030k) of
the annual audit fee, which related to the appointment of
Deloitte as reporting accountant for the Group’s sale of the
RM Integris and RM Finance businesses. This decision was
reviewed and approved by the Audit and Risk Committee in
advance of appointment, with threats of self-review and
self-interest considered mitigated through the use of a
separate team, engagement partner, independent reviewer
and engagement letter. No interim review was performed
during the financial year.
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RM plc Annual report and financial statements 2023 Corporate governance Audit and Risk Committee report continued
Financial Reporting Council (FRC) review of
2022 financial statements and regulatory
audit quality
In October 2023, the FRC carried out a review of the
Group’s Annual Report and Accounts in line with usual
cyclical practice and raised a number of queries.
Management responded to the review, which is now
closed, and have made a number of disclosure
improvements to the financial statement disclosures in
these (and future) accounts.
Assessment of control environment
During the year, the Group continued to evolve its control
framework following the findings of previous years. Whilst
not all of the recommendations made in the Financial
Position and Prospects Procedures report have yet to be
fully addressed, the Group has specifically focused on
controls considered most important to reduce the risk of
material misstatements in these accounts. These included
supplier statement reconciliations, controls over revenue
recognition and balance sheet reconciliations.
The Committee is being updated regularly with respect to
progress related to remediation activities as well as reviewing
ongoing control improvements identified. Because a
number of controls are only in place from the balance
sheet date a fully substantive audit approach continued to
be undertaken for the 2023 year end.
The Committee has assessed that the Group still relies on
controls that require enhanced documentation and
formalisation, and in specific areas, redesign. The control
improvement plan is ongoing, and the Committee is
engaged in ensuring that management have the
appropriate resource and an appropriate remediation
timeline.
Management have provided the Committee with assurance
that where controls were not designed, implemented or
operating effectively there were appropriate mitigating
actions in place to conclude that the Financial Statements
do not contain material errors.
The most significant risks the Group is exposed to are set
out in the Strategic Report.
The FRC’s review was based on the Group’s annual report
and accounts and did not benefit from detailed knowledge
of the business or an understanding of the underlying
transactions entered into. The FRC review provides no
assurance that the Group’s report and accounts are correct
in all material respects, as the FRC’s role is not to verify the
information provided but to consider compliance with
reporting requirements.
Deloitte's audit of the Group's 30 November 2022 year end
was selected for review by the FRC's Audit Quality Review
(AQR) team. The Audit & Risk Committee Chair met with
the AQR as part of the process and was kept up to date by
Deloitte as the review progressed. The review has now
completed, identifying limited improvements required, with
the Chair of the Audit Committee receiving a copy of the
findings.
Review of risk management and internal
control
As with any business, RM is exposed to risks as an inherent
part of creating value for shareholders. As described below,
the Group has put in place processes designed to identify
these principal risks and to manage and mitigate the effect
of them. The Committee is responsible for ensuring that
risks are properly considered, and the Board is responsible
for deciding what risks should be taken and how best to
manage and mitigate the risks.
The Committee is responsible for monitoring the
effectiveness of the Company’s internal system of control.
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RM plc Annual report and financial statements 2023 Corporate governance Audit and Risk Committee report continued
Control environment – Acknowledging the internal control
improvement project highlighted above, the Board has put
in place an organisational structure with clearly defined lines
of responsibility and delegation of authority to Executive
management. A Group-wide approval matrix is in place,
which was reviewed and enhanced during the year. Individuals
are made aware of their level of authority and their budgetary
responsibility which enables them to identify and monitor
financial performance. There are established policies and
procedures, which have been further refined and documented
during the year. The Boards of the operating companies work
within terms of reference and any matters outside those
terms or the agreed business plan are referred to the
Group Board for approval.
Identification and evaluation of business risks and control
objectives – The Board has the primary responsibility for
identifying the principal business risks facing the Group and
developing appropriate policies to manage those risks. It
delegates responsibility for operational risks to the
Executive Committee which meets monthly.
During the year the Group developed and implemented an
enterprise risk framework model, which is overseen by the
Board and will be reviewed by the Committee at least once
a year or when there are significant changes affecting the
Group’s risk profile.
Further details in relation to the processes for identifying
and managing Group risks are set out in the Strategic
Report and Corporate Governance Report.
Public reporting – The Committee reviews and comments
upon both the Group’s annual and interim results prepared
by management, together with any other trading
statements that are issued.
Management information – Executive managers are
required to produce a budget for approval at the beginning
of each financial year and detailed financial reporting is
formally compiled monthly and reviewed by the Board.
Consolidated management accounts are produced each
month and results measured against budget and against
the previous year to identify any significant variances.
Forecasts are produced each month during the year, with
variances to budget being measured.
Monitoring – The Committee meets periodically to review
reports from management and the external auditor so as to
derive reasonable assurance on behalf of the Board that
financial control procedures are in place and operate
effectively. An internal audit plan is set with the Committee
on an annual basis, and updates on progress are provided
periodically. The internal audit work is performed on a
peer-to-peer review basis or by engaging a third-party firm
of accountants and is directed by a qualified accountant
who is independent of the business divisions.
Internal audit
During the year, a Head of Internal Audit & Internal Controls
was appointed to the Group. The Committee, with the
advice and support of the Head of Internal Audit & Internal
Controls, sets an internal audit plan, focused on operational
and financial controls and risk areas. The financial controls
include controls to address fraud risks. There have been no
fraud instances during the year. The Head of Internal Audit
& Internal Controls reports on progress against this plan at
Committee meetings, and has a direct route to the
Committee Chair.
Internal audit activities are undertaken through the
engagement of Grant Thornton, our third-party internal
audit partner firm. The external auditor does not rely on
internal audit to substitute any audit work required to form
their opinion on the Financial Statements.
The Group has continued routine audits that review
adherence to the agreed controls and processes in its India
subsidiary and has completed audits of:
•• Compliance with Governance and Listing Rules by RM plc
•• Contractual commitments in the Assessment division
•• Data security & privacy for the Group
The Internal Audit plan continues to be reviewed and
approved on an annual basis. For FY24 an initial plan has
been approved using inputs from Grant Thornton,
executive management of the Group, and findings from the
external audit process. Once the enterprise risk framework
is finalised it is expected that the most significant risk
outputs from this process will inform future Internal Audit
programmes.
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RM plc Annual report and financial statements 2023 Corporate governance Audit and Risk Committee report continued
‘Whistleblowing’ Policy
The Group has adopted a formal Whistleblowing Policy and
more details may be found in the Sustainability Report at
page 42 to 47.
Anti-bribery
RM conducts all its business in an honest and ethical
manner and seeks to ensure that all associates and business
partners do the same. The Group has implemented policies
and procedures to ensure that it is transparent and ethical
in all business dealings as referenced in the Sustainability
Report at page 42 to 47.
Richard Smothers
Chair, Audit and Risk Committee
14 March 2024
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RM plc Annual report and financial statements 2023 Corporate governance
Corporate governance
Remuneration committee report
Part A – Remuneration Committee Chair’s Statement
On behalf of the Board, I am pleased to present the
Remuneration Committee Report for the year ended
30 November 2023.
This report is divided into the following three sections:
Roles & responsibilities
The Remuneration Committee is responsible for setting a
formal and transparent procedure for developing the Policy
on Director remuneration in accordance with the Code.
Part A Remuneration Committee Chair’s statement:
which provides an overview of the Report, the
functioning and membership of the Remuneration
Committee, and the major activities and outcomes
for the year ended 30 November 2023;
Part B Directors’ Remuneration Policy (the "Policy"): which
sets out the Policy which we are seeking to amend
and update at our 2024 AGM on 9 May 2024; and
Part C Implementation Report: which sets out the payments
and awards made to Directors for the year ending
30 November 2023 and how the Directors’
Remuneration Policy will operate for the year
ending 30 November 2024.
Remuneration arrangements for our new
leadership
Mark was appointed as our Chief Executive in January 2023
and Simon was appointed as our Chief Financial Officer in
August 2023. As the new leaders of our leadership group
(which also includes some newly appointed executives),
Mark and Simon have a clear objective which is to improve
RM’s recent performance and thereby (it is anticipated) to
drive a recovery in shareholder value.
In terms of the packages for Mark’s and Simon’s
recruitments, these were appropriately positioned:
•• Base salaries are not ahead of the base salaries of the
prior holders of the roles; and
•• Both Mark and Simon have joined our annual bonus and
Performance Share plans (PSP) on their continuing terms
(with Simon’s 2023 annual bonus and PSP participation
pro-rated to reflect his joining date).
The Committee’s responsibilities include:
Reviewing the appropriateness of the Directors’
Remuneration Policy
Determining with the Board the policy for remuneration
of the Executive Directors, Chair of the Company, and
Executive, ensuring the alignment of the Company’s
purpose, values and strategy and promoting the long-
term success of the Company. Reviewing this
policy annually.
Setting remuneration
Setting and authorising annually the remuneration of the
Chair, Executive Directors, and Executive in accordance
with the policy and with due account taken of all relevant
factors, such as individual and Group performance and
remuneration payable by companies of a comparable
size and complexity.
Workforce remuneration
Reviewing workforce remuneration and related policies
across the Group and taking account of this in setting
Executive Director remuneration.
Incentive plans
Approving all performance related pay schemes, targets
set, and total annual payments made under these schemes.
Reviewing such schemes to ensure these plans are
structured appropriately and are consistent.
Discretion
Determining whether discretion should be exercised
to ensure payments are fair.
Effectiveness
To report to the Board on how it has discharged
its responsibilities and making appropriate
recommendations.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
Our renewed Directors’ Remuneration Policy
We will be renewing our three-yearly Directors’
Remuneration Policy at our 2024 AGM.
Advocates asked questions to gain a better understanding of the
Executive Director remuneration structures as well as broader
topics such as the Board’s view on the share price and business
strategy, but no specific concerns were raised in the meeting.
Looking ahead to the next three-year ‘policy period’ (AGM
2024 to AGM 2027), it is very important for RM and its
shareholders that appropriate pay arrangements are in
place to retain and incentivise our new leadership group
while they are seeking to deliver the turnaround in RM’s
performance which we, as a Board, are all working towards.
Part of this requires that we have in place meaningful (but
not excessive) share incentives to align the pay of our
executives directly to shareholders’ experience. It is
because of this that we need to look at the dilution limits
for our share plans that will apply for the next policy period.
Accordingly, we are proposing to make only one material
change to the Policy, and that is to ask our shareholders for
authority to amend our current 2019 Performance Share
Plan (PSP) so that the PSP operates within a new 12.5% in
10 years share plans dilution limit. This new limit will replace
the current dilution limits in RM’s share plans (a 10% in 10
years dilution limit that applies to all RM share plans and
within that an internal 5% in 10 years dilution limit for
selective share plans). This change will enable the Company
to make meaningful awards that will be retentative and
incentivising. If the amendment to the PSP is approved by
shareholders, the company the Company will review the
extended 12.5% dilution limits ahead of the AGM 2027 to see
if we can revert to a more standard 10% dilution limit.
No other material changes are proposed on the quantum
of pay available to our Executive Directors or in the overall
architecture of the incentive plans which we operate (annual
bonus and three-year shares-based PSP) and which we
believe continue to be appropriate for RM.
Stakeholder engagement
The Committee has engaged appropriately with major
shareholders on proposed changes to the Policy. The Chair
of the Remuneration Committee is available to discuss
remuneration with shareholders at any time and will be
available to answer questions at the forthcoming AGM.
Consideration of workforce remuneration,
policies, and other measures
The Committee considered workforce remuneration and
policies and their alignment with rewards and incentives
offered in Executive Director remuneration and was regularly
updated on employee pay and benefits throughout the Group.
During the year, the Committee reviewed various internal
measures including pay ratios and pay gaps in reviewing
salaries and variable pay. Feedback based on interactions
with the Advocates on Executive Remuneration and Policy
was considered in reviewing the remuneration for the
Executive Directors and workforce at the
Remuneration Committee.
Performance during year ended
30 November 2023
The financial performance for the year was largely
impacted by a series of operational challenges inherited by
the newly appointed Executive Directors. The decisive
action taken to address these issues coupled with achieving
some key strategic initiatives have laid the foundation for
the year ahead.
Remuneration during 2023
Base Salary
The salaries of the Executive Directors on appointment
were Chief Executive £365,000 (the same as the prior Chief
Executive) and Chief Financial Officer £275,000 (prior Chief
Financial Officer £300,000).
Bonus award for 2023
Following the year end, the Committee considered the
progress made by the Executive Directors on matters of
strategic importance for the business in 2023 and determined
that it would be appropriate to award annual bonuses of
£120,000 for the Chief Executive (equivalent to 33% of base
salary) and £27,717 for the Chief Financial Officer (equivalent
to 10% of base salary (38% on a pro-rata basis)).
The Chair of the Remuneration Committee, who is also the
designated Non-Executive for workforce engagement held a
meeting with a designated employee group called the RM
Advocates to discuss Executive Director remuneration. This was
an open and constructive dialogue which shared the details
and rationale for Executive Director remuneration. The
In a year of transition, the Remuneration Committee had
identified three strategic priorities for RM’s 2023 annual
bonus plan – weighted two-thirds towards financial
performance (split equally between Group Adjusted
Operating Profit and Cash Flow) and one-third on
Transformation strategic objectives.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
Although it was not considered appropriate to make any
payment in respect of FY23 financial performance, the
Committee determined that it was appropriate to make a
payment in respect of the attainment of Transformation
strategic objectives which in FY23 included steps to secure
the long-term financial stability of the business (including
pensions funding settlement), implementation of costs
saving across several areas including external professional
resources, sale of Integris, building a new leadership group
and successful execution of corporate actions that will
reshape the business for future growth.
The Transformation strategic objectives for FY23’s annual
bonus were all matters which are important to RM’s long-
term development. Accordingly, paying some element of
annual bonus for attainment of these is, in the Remuneration
Committee’s view, important to reinforce the integrity of
having such measures within our annual bonus plan which,
we believe, is strongly in shareholders’ best interests. It also
acknowledges our new executive team’s strong and robust
leadership in a year with many challenges and in which the
team have taken good steps to re-establish the business on a
path towards stronger future performance.
When bonus measures for FY23 were originally set for the
period, the Remuneration Committee had included a term
that Group Adjusted Operating Profit (AOP) should be attained
at a level then regarded as on-target to allow payment of any
bonus for Transformation strategic objectives. The commercial
circumstances of the Group in FY23, however, meant that it
was inappropriate to continue to apply this. The Remuneration
Committee is satisfied that the proposed bonus payments to
the Chief Executive and Chief Financial Officer are in
shareholders’ long-term best interests.
Long Term Incentive Plan (LTIP) in 2023
As part of their joining arrangements, the Committee
approved the grant of LTIP awards to our Chief Executive
Mark Cook on 16 January 2023 in respect of 873,763 shares
and to our Chief Financial Officer Simon Goodwin on 29
August 2023 in respect of 300,000 shares. Details of
performance conditions are set out later in the Directors
Remuneration Report but are broadly: (i) 40% based on
relative Total Shareholder Return (TSR); and (ii) 60% based
on demanding absolute TSR growth.
Discretion
The Board did not exercise discretion (positive or negative)
regarding Directors’ remuneration outcomes during the
year, other than when commercially appropriate to do so
and in the best long-term interests of shareholders. As
described above for FY23 annual bonus, the original
requirement regarding attainment of Group Adjusted
Operating Profit in FY23 at levels set early in the period was
adjusted to reflect the commercial circumstances of the
business during FY23.
The Committee considers that the overall pay outcome for
the year ended 30 November 2023 is justified given the
overall performance of the business and the performance
of the Executive Directors.
Looking forward
At our 2024 AGM, shareholders will be asked to approve
three resolutions related to Directors’ remuneration
matters. These resolutions are:
•• To approve the Directors’ Remuneration Report;
•• To approve the updated Directors’ Remuneration Policy; and
•• To approve an amendment to our current 2019
Performance Share Plan (LTIP).
The vote to approve the Directors’ Remuneration Report is
the normal annual advisory vote on such matters. If approved
by our shareholders, the Directors’ Remuneration Policy will
apply for a maximum of three years from the 2024 AGM
and will replace the Directors’ Remuneration Policy previously
approved at the 2021 AGM. The last resolution will approve
an amendment to the LTIP to introduce a new 12.5% in 10
years share plans dilution limit to replace the current share
plans dilution limits in RM’s share plans (as explained above).
I hope that our shareholders will remain supportive of our
approach to executive pay at RM and vote in favour of
these resolutions at our 2024 AGM. I will be available to
answer questions on the Directors’ remuneration report at
the AGM, and if any shareholder wishes to contact me in
advance of that meeting to discuss any matters disclosed in
the report, I can be reached via the Company Secretary.
Advisors
During the year, FIT Remuneration Consultants LLP were
appointed as advisor to the Committee. Further details of
FIT and the advice they have provided are included in the
Implementation Report.
Christopher Humphrey
Chair, Remuneration Committee
14 March 2024
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
Part B – Directors’ Remuneration Policy
This report contains the proposed Policy which will take effect,
subject to the approval of the shareholders, immediately
after the 2024 AGM. Changes from the prior policy are
highlighted within the main Policy table. The main change
to the Policy is to amend our current 2019 Performance
Share Plan (LTIP) so that it operates within a new 12.5% in
10 years share plans dilution limit only, as described in the
Remuneration Committee Chair’s statement.
No Director should be involved in deciding their own
remuneration. The members of the Remuneration Committee
shall not have any personal financial interest in the Company
other than through fees received or as a shareholder.
Furthermore, they shall not be involved in the day-to-day
running of the business and shall have no personal conflict
of interest which could materially interfere with the exercise
of their independent judgement or discretion.
The engagement of any third-party remuneration consultant
is the responsibility of the Remuneration Committee, and
their appointment must be objective and independent.
This new Directors’ Remuneration Policy ('Policy') shall
become effective immediately following the 2024 Annual
General Meeting, subject to its approval at that meeting.
1. General objectives
RM’s Policy is designed to support the strategy and promote
the long-term success of the Company. The Policy is designed
to attract, retain, and motivate Directors and senior employees,
both to achieve the Group’s business objectives and to deliver
sustained shareholder returns, while also being conscious
of the wider climate in relation to executive pay. The Chair
of the Remuneration Committee is available to discuss
remuneration with shareholders as required. The Policy
should ensure that the payments made to Executive
Directors reflect their performance, are not excessive and
are aligned with the purpose and values of the Company.
Under these arrangements, the variable component of
the remuneration package is designed to be predictable,
proportionate, and focused on performance. These incentive
arrangements enable Executive Directors and senior
employees to have the opportunity to earn higher levels of
reward if they enhance shareholder returns by meeting the
Group’s short-term and long-term targets. The Committee
is satisfied that this model provides appropriate alignment
with shareholder interests and therefore acts as an
appropriate motivator.
The Committee has reviewed the level of risk inherent in the
Policy and is satisfied that there is an appropriate balance
between encouraging entrepreneurial behaviour from
Executive Directors and senior employees and ensuring
that there are no areas of the Policy which encourage undue
risk-taking. In relation to the target setting process and other
matters arising in relation to the operation of the annual
bonus and long-term incentive plans, the Committee
considers that the structure is clear, straightforward and
does not encourage excessive risk-taking.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
2. Components of Remuneration for Executive Directors
The following table sets out a summary of the various components of remuneration for Executive Directors, their purpose
and link to strategy, their operation, the maximum opportunity available, the nature of any applicable performance metrics
and changes (if any) made during the year.
Maximum
opportunity
Base salaries will be
determined as outlined
in the ‘Operation’
column opposite.1
Performance
metrics
None.
Changes
from previous
policy
No material
changes.
4.5% of base salary
(being the contribution
level of the majority of
UK employees).
None.
No material
changes.
Clarified
that current
contribution
level is 4.5%.
The cost of such
benefits varies in
accordance with market
conditions.1
None.
No material
changes.
Element
Fixed pay:
Base
Salary
Purpose and
link to strategy
To attract and
retain talent by
ensuring that
salaries are
competitive in
the market.
Fixed pay:
Pension
To attract and
retain talent by
ensuring that
remuneration is
competitive in
the market.
Fixed pay:
Benefits
To attract and
retain talent by
ensuring that
remuneration is
competitive in
the market.
Operation
Base salaries will be set on
appointment at the appropriate level
for the role.
Following an appointment, an
Executive Director’s base salary may
also be increased over a period to
attain a market level as described in
the Policy on Recruitment.
Thereafter, base salaries will
generally only be increased in line
with the increases in pay for the
wider workforce (either across single
or multiple years), except as justified
by other circumstances.
Entitlement is the same as for
the majority of the UK workforce
within the Group. Cash allowance
alternative is offered where
individuals are subject to HMRC
pension limits (subject to there being
the same overall cost to the Group).
Pension benefits will not be
augmented on exit.
The benefits are the same as for the
majority of employees within the
Group and are reviewed periodically
to ensure that offerings are in line
with market practice.
The main benefits are:
• Private healthcare;
• Group income protection;
• Life assurance;
• Car allowance.
Mobile phone allowance. Enhanced
family leave and sick pay.
Other benefits may be added
or removed in line with benefits
awarded to the majority of
employees.
1. There is no maximum base salary or maximum for any of the benefits.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
Element
Variable
pay:
Annual
Bonus
Purpose and
link to strategy
Provides an
element of at
risk pay, which
incentivises
good annual
performance.
Changes
from previous
policy
No material
changes.
Operation
Awards are based on
performance typically
measured over one year.
Any payment is
discretionary and pay-
out levels are determined
by the Committee after
the year end based on
performance against pre-
set targets.
The Remuneration
Committee has discretion,
where it believes it to be
appropriate, to amend the
vesting level should any
formulaic outcome not
reflect the Committee’s
assessment of overall
business performance,
including consideration of
shareholder experience.
Annual bonuses are
subject to malus and
clawback provisions (see
further below).
Annual bonuses are not
pensionable.
Maximum
opportunity
Performance metrics
55% of base salary
for on-target
performance,
with a maximum
figure for over-
performance
of 110% of base
salary.
Performance measures,
weightings and targets are
set by the Committee at
the beginning of each year.
Measures are linked to the
Group’s strategy and aligned
with key financial, strategic
and/or individual targets.
At threshold
performance,
bonuses will be
paid at no more
than 20% of
the maximum
opportunity.
Any bonuses more
than 100% of base
salary will be paid
in the form of
shares that must
normally be held
for a minimum
of two years (the
same holding
period as LTIP
vested shares).
The performance measures
applied may be financial or
non-financial, corporate,
divisional, or individual, and
in such proportions as the
Remuneration Committee
considers appropriate.
Typically, they include profit
but may also be other
financial and strategic
measures.
Details of the specific
performance targets will
normally be disclosed
retrospectively in the
following year’s Directors'
Remuneration Report.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
Maximum
opportunity
200% of base
salary per annum.
At threshold
performance, no
more than 25% of
the award will vest.
Changes
from previous
policy
No material
changes.
Performance metrics
Performance measures1
and weightings are set
by the Committee at the
date of grant to align with
shareholders’ interests.
These will normally be
measured over a three-
year period and may
include EPS, TSR and
other financial, strategic
or shareholder return
measures.
The vesting period for
LTIPs will be a minimum of
three years.
All targets will be subject to
an underpin based on the
underlying performance of
the Company.
Element
Variable
pay:
LTIPs
Purpose and
link to strategy
Incentivises
Executive
Directors
to achieve
returns for
shareholders
over a longer
period.
Operation
Awards (nil cost options
or share awards) are
granted to Executive
Directors typically each
year, with the vesting of
awards being based on
criteria designed to align
with shareholder interests
and encourage long-term
performance.
Where LTIP awards vest,
a post-vesting holding
period of two years will
apply (save that Directors
may sell sufficient shares
on vesting/exercise to
satisfy the income tax/
National Insurance liability
that arises).
To the extent awards
vest, they may accrue the
benefit of dividends or
dividend equivalents during
the vesting period.
LTIP awards are subject
to the Remuneration
Committee’s discretion,
where it believes it to be
appropriate, to amend the
vesting level should any
formulaic outcome not
reflect the Committee’s
assessment of overall
business performance,
including consideration of
shareholder experience.
LTIP awards are subject
to malus and clawback
provisions (see further
below).
LTIP awards are not
pensionable.
1. Details of the expected measures for 2024 are set out in paragraph 8 of Part C.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
The following table sets out a summary of the various components of remuneration for Non-Executive Directors, their
purpose and link to strategy, its operation, the maximum opportunity available, the nature of any applicable performance
metrics and changes (if any) made during the year.
Performance
metrics
Changes from
previous policy
None.
No material
changes.
Maximum opportunity
The aggregate fees
of the Chair and of
the Non-Executive
Directors will not
exceed the limit from
time to time prescribed
within the Company’s
Articles of Association
for such fees (currently
£500,000 p.a. in
aggregate).3 4 5
Element
Fixed pay:
Fee
Purpose and
link to strategy Operation
To reward
individuals
for fulfilling
their roles
and attract
good
candidates
The Committee makes
recommendations to the Board on
the Chair’s remuneration.
The Chair and the Executive
Directors determine the
remuneration of Non-Executive
Directors. Directors do not
participate in decisions regarding
their own fees.
The Chair receives a single annual
fee. Other Non-Executive Directors
are paid an annual fee covering
Board and Committee membership,
with Committee chairs, the Senior
Independent Director and the
designated HR representative
receiving an additional fee.1
Remuneration data is considered
during the process, including
fees paid for comparable roles in
companies of an equivalent size and
complexity, as the Company.2
In exceptional circumstances, if
there is a temporary yet material
increase in the time commitments
for Non-Executive Directors, the
Board may pay extra fees on a pro
rata basis to recognise the additional
workload.
1. The annual and additional fees for additional responsibilities are paid monthly in cash.
2. Fees for the Non-Executive Directors and the Chair were last reviewed in August 2023 and increased to be more in line with market rates at
that time.
3. Fees are not performance-related but reflect the time commitment and responsibilities of the role.
4. Out-of-pocket expenses (such as travel, hospitality, and other modest benefits, including related tax liabilities) incurred in performing those
duties are reimbursed by the Company.
5. Remuneration for Non-Executive Directors does not include share options or other performance-related elements.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
3. Shareholding policy
The Committee has implemented the following shareholding
policy for all Executive Directors to further align their interests
with those of the Company’s shareholders:
1. Within five years of the first opportunity for an LTIP to
vest following appointment to the Board, Executive
Directors are required to build up, and retain, ordinary
shares in the Company equivalent in value to at least
200% of their base annual salary.
2. If Executive Directors do not hold the appropriate level
of shares, they may not sell shares other than to satisfy
income tax/National Insurance liabilities that arise in relation
to the vesting/exercise of LTIP awards. In all cases, any
such sale will be subject to the normal Listing Rules and
Disclosure and Transparency Rules’ requirements for
Directors’ dealings.
3. For a one-year period after stepping down from the
Board, Executive Directors are required to retain ordinary
shares in the Company equivalent in value to the lower
of 100% of their base annual salary and the Executive
Director’s actual shareholding at that time. This only
applies in respect of shares owned as a result of LTIP
awards granted after 8 April 2021 (being the date of the
2021 Annual General Meeting).
4. The Committee has the discretion to waive the above
requirements when the Committee considers appropriate.
4. Policy on recruitment
The ongoing remuneration arrangements for a newly
recruited or promoted Director will be in accordance with
the Policy in place at the time of the appointment.
In respect of Executive Directors, the initial base salary will
be set to reflect the individual’s experience, salary levels
within the Company and market levels. Where an individual
is appointed on an initial base salary that is below market,
base salary levels may later be increased to attain a market
level. These increases may be managed with phased increases
over a period, subject to the individual’s development in the
role. This may result in above-average base salary increases
during this period.
For external appointments, the Committee may also offer
additional cash and/or share-based elements to replace
remuneration forfeited, when it considers this to be in the
best interests of the Company and its shareholders (as
buy-outs). This includes the use of buy-out awards made
under rule 9.4.2 of the Listing Rules and/or buy-out awards
made under existing incentive arrangements available to the
Company. The terms of any such payments offered will
reflect the nature, time horizons and likelihood of performance
requirements being met in respect of remuneration forfeited,
as determined by the Committee. Shareholders will be
informed of any such payments at the time of appointment
and/or in the next published annual report. However, for the
avoidance of doubt, the value of buy-out awards is not capped.
For internal appointments, any commitments made before
appointment and not relating to appointment will be allowed
to pay out according to their terms.
For external and internal appointments, the Committee may
agree that the Company will meet certain reasonable relocation
expenses as appropriate, if these are incurred and claimed
within 12 months of appointment.
While the Nomination Committee may hold initial discussions
with prospective candidates on remuneration, the
Remuneration Committee will formally decide on the
remuneration arrangements.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
5. Malus and clawback
Malus and clawback provisions are in place, and will
continue to be maintained, in relation to the variable,
performance-related remuneration of the Executive
Directors (annual bonus and LTIPs).
As the payment of annual bonuses are at the discretion
of the Committee:
•• the malus provisions in force are such that the Committee
can reduce the payment of any bonus payment if they
consider that there is any reason that makes it appropriate
to do so. This includes (without limitation) the circumstances
applicable to clawback as outlined below but could also
include any other matters that the Committee considers
appropriate; and
•• clawback may apply where the bonus payment was based
on erroneous or misleading data or any misstatement of
accounts, misconduct by an Executive Director, or the
Group suffers serious reputational damage or corporate
failure (‘Serious Grounds’). The clawback operates for a
period of up to 18 months after the end of the relevant
financial year to which the bonus relates, or if longer any
holding period.
In respect of each award under the LTIP:
•• the malus provision may apply when there are any Serious
Grounds or any other circumstances where, in the
reasonable opinion of the Committee, the malus
provisions should be operated in relation to an Executive
Director; and
•• the clawback provision may apply where there are any
Serious Grounds where in the reasonable opinion of the
Committee, the clawback should be operated in relation
to an Executive Director. The clawback under the LTIP
operates to the later of (a) one year from the relevant
LTIP award vesting and (b) the completion of the next
audit of the Group’s accounts after the award vests.
6. Payment under previous policies
The Committee reserves the right to make any remuneration
payments and payments for loss of office, notwithstanding
that they are not in line with the Policy set out above, where
the terms of the payment were agreed: (i) under a previous
Policy, in which case the provisions of that policy shall continue
to apply until such payments have been made; or (ii) at a
time when the relevant individual was not a Director of the
Company and, in the opinion of the Committee, the
payment was not in consideration for the individual
becoming a Director of the Company. For these purposes,
‘payments’ includes the satisfaction of awards of variable
remuneration and, in relation to share-based awards, the
terms of the payment which are agreed at the time the
award is granted.
7. Discretions
The Remuneration Committee retains discretion with
regards to the variable elements of pay (annual bonuses
and LTIP awards), in relation to:
•• The individuals that may participate in a scheme, timing,
size, and type of awards and holding periods (subject
always to the limits set out in the applicable Policy);
•• The weighting, measures and targets should be for the
relevant bonus or awards from year to year;
•• The extent of vesting of awards generally and treatment
of awards and/or payments on a change of control or
restructuring of the Group;
•• Whether an Executive Director or a senior manager
is a good/bad leaver for incentive plan purposes and
whether the proportion of awards that vest do so at the
time of leaving or at the normal vesting date(s);
•• Adjustments required in certain circumstances (e.g. rights
issues, corporate restructuring events and special
dividends);
•• Adjustment of targets and/or set different measures
or weightings if events occur (such as corporate acquisitions
or other major transactions) that cause it to determine
that the conditions set in relation to an annual bonus
plan or a granted LTIP award are no longer appropriate
or unable to fulfil their original intended purpose. Any
such changes would be explained in the subsequent
Directors’ remuneration report and, if appropriate, be
the subject of consultation with the Company’s major
shareholders; and
•• Amendments to plan rules in accordance with their
terms or as required by law or regulation.
However, the Committee acknowledges the concerns
of interested stakeholders that the discretion afforded to
remuneration committees in quoted companies should not
be too broad or enable the payment of inappropriate or
excessive amounts, especially where payments to Executive
Directors are not aligned with the expectations
of shareholders.
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RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
8. Illustration of Remuneration Policy
The graphs below provide estimates of the potential future
reward for each of the Executive Directors based on their
current roles, the Policy outlined above and base salaries
after applying a 3% increase which takes effect from 1 April
2024. The maximum LTIP awards at 150% of base salary as
shown are for illustration.
Chief Executive Officer
£000
+ 50%
LTIPs
Variable Pay
Fixed
Minimum (£000)
On-target
17%
41%
34%
Base
376
Benefits
Pension
11
16
•• On-target is assumed to be an annual
bonus equal to 55% (on target) of
base salary and an LTIP vesting of 25%
(threshold) of maximum
Total
403
752
Maximum
•• Full pay-out of annual variable pay i.e.
1,382
19%
27%
54%
30%
25%
29%
24%
100%
Minimum On target
Maximum
Maximum
+50%
Maximum +50%
share price growth
110% of base salary
•• Maximum vesting of LTIP awards
•• As above for maximum plus 50% share
price growth over the performance
period
Chief Financial Officer
£000
+ 50%
LTIPs
Variable Pay
Fixed
Minimum (£000)
On-target
17%
41%
34%
19%
27%
54%
30%
25%
29%
24%
100%
Minimum On target Maximum Maximum
+50%
Base
283
Benefits
Pension
11
12
•• On-target is assumed to be an annual
bonus equal to 55% (on target) of
base salary and an LTIP vesting of 25%
(threshold) of maximum
Maximum
•• Full pay-out of annual variable pay i.e.
1,043
Maximum +50%
share price growth
110% of base salary
•• Maximum vesting of LTIP awards
•• As above for maximum plus 50% share
price growth over the performance
period
1,255
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1,400
1,200
1,000
800
600
400
200
0
1,664
Total
306
569
9. Comparison of Remuneration Policy
This Policy sets out the remuneration structure applicable
to Directors of the Company. Salary levels and incentive
arrangements applicable to other Group employees are
determined by reference to local employment conditions
for comparative roles.
Employees are provided with a competitive benefits package
including (as appropriate) private healthcare, group income
protection, life assurance, car allowance and mobile phone
allowance. Pension contributions are also provided (4.5% for
the majority of UK employees). These are the same as the
pension contribution rates provided to Executive Directors.
Budgeted salary increases for Group employees are taken
into consideration when determining increases for the
Executive Directors and base salaries for Executive Directors
will generally only be increased in line with the increases in
pay for the wider workforce (either across single or multiple
years), except as justified by other circumstances.
Consistent with Directors, the majority of employees are
eligible to participate in an annual bonus scheme with
conditions linked to the performance of their operating
subsidiary and the Group overall.
Members of senior management participate in long-term
incentive arrangements based on the same performance
measures as the Executive Directors.
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RM plc Annual report and financial statements 2023
Corporate governance Remuneration committee report continued
10. Directors’ service contracts and letters of
appointment
The policy in relation to Executive Directors’ service contracts
is for them to contain a maximum notice period of 12 months.
Each service contract is subject to earlier termination for cause.
In exceptional circumstances, a longer notice period initially,
reducing down to 12 months, to secure the appointment
of an external recruitment may be agreed.
All Non-Executive Directors have letters of appointment with
the Company for an initial period of three years, subject to
annual reappointment at each Annual General Meeting.
Notice periods are as set out in the table below.
Details of the Directors’ service contracts and/or letters
of appointment as at 30 November 2023 are shown in
the table below:
Initial agreement
date
Expiry date of
current agreement
Notice to be given by
employer and individual
Executive Directors:
Mark Cook
Simon Goodwin
Chair and Non-Executive Directors:
Helen Stevenson
Patrick Martell
Carolyn Dawson
Jamie Murray Wells
Christopher Humphrey
Richard Smothers
16 January 2023
29 August 2023
Indefinite
Indefinite
16 February 2022
14 February 2025
01 January 2014
31 December 2023
01 November 2023
01 November 2026
01 November 2023
01 November 2026
07 July 2023
07 July 2026
03 January 2023
02 January 2026
1 Patrick Martell stepped down from the Board on 31 December 2023.
12 months
12 months
3 months
3 months
3 months
3 months
3 months
3 months
The letters of appointment of the Chair and Non-Executive
Directors, and the service agreements for the Executive
Directors are available for inspection at the Company’s
registered office.
11. Policy on termination
In normal circumstances, it is expected that termination
payments for Executive Directors should not exceed
current salary, pension, and benefits for the notice period in
accordance with the Director’s service agreement. The
Company may terminate employment with immediate
effect and, in lieu of the unexpired portion of any notice
period, make a series of monthly payments based on
entitlements to fixed pay (or make a lump sum payment).
When determining termination payments in the event of
early termination, the Committee will take into account a
variety of factors including length of service, personal and
Group performance, the Director’s obligation to mitigate
their loss, statutory compensation to which a Director may
be entitled and legal fees and other payments which may
be payable under a settlement agreement (to discharge an
existing legal obligation or by way of damages for breach of
an obligation). As part of a settlement agreement, the Company
may reimburse reasonable legal costs incurred in connection
with a termination of employment and/or agree to make a
contribution towards outplacement services, if the Committee
considers it appropriate. Any such fees will be disclosed as
part of the detail of termination arrangements. For the
avoidance of doubt, the Policy does not include an explicit
cap on the cost of termination payments.
107107
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
A Director who leaves will cease participation and forfeit any
right to annual bonus normally, although a ‘good leaver’ may
be eligible to continue participation in the bonus scheme at
the discretion of the Committee and have a pro-rata bonus
for the part of the year worked. For a ‘good leaver', the
Committee may use its discretion not to defer part of the
pro-rata bonus outcome in shares.
Deferred bonus awards are normally preserved in all leaver
cases (other than voluntary resignation or termination for
cause) and will be retained and can vest at the normal
vesting time for the awards. The Committee has the ability
to release a good leaver’s awards early in suitable cases,
such as death in service or other compassionate grounds.
Directors have no entitlement to unvested LTIP awards which
will generally lapse following termination of employment.
However, where it is considered appropriate to allow a
Director ‘good leaver’ treatment, a time pro-rated proportion
of outstanding LTIP awards (as determined by the Committee)
may be retained and can vest subject to attainment of the
performance conditions at the normal vesting time for the
awards. Any originally specified holding periods would normally
continue to be applied to the vesting shares. However, if
the Director ceases employment during the holding period
due to circumstances justifying summary dismissal, LTIP
awards and/or any shares subject to the holding period
shall lapse in full. The Committee has standard discretions
to vary time pro-rating and/or disapply holding periods.
LTIP awards vest on a change in control of the Company,
subject to assessment by the Committee at the time as to
the level of vesting (if any) that is appropriate, considering
(among other things) the extent to which the relevant
performance targets have been met and how much of the
relevant performance period(s) has passed. Awards subject
to a holding period shall be released from this.
Where a buy-out award is made, then the leaver provisions
are determined at the time the award is made.
No compensation is payable on termination of a Non-
Executive Director, other than any accrued fees and expenses.
108108
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
Part C – Implementation report
1. Directors’ remuneration – Single figure of remuneration (AUDITED)
The tables below set out a single figure of remuneration for each of the Directors in respect of the year ended 30 November 2023
and, in respect of those Directors, the equivalent figures for the year ended 30 November 2022. The table has been audited.
Salary/
fees
£000
Retirement
Benefits1
£000
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Taxable
benefits
£000
LTIPs
(vested)
£000
Annual
bonus
£000
Other
£000
Total
£000
Total Fixed
Remunera-
tion
£0003
Total
Variable
Remunera-
tion
£0003
-
-
122 365
- 225
320
71
Name
Executive
Mark Cook2
Simon Goodwin2
Neil Martin2
Mark Berry2
Non-Executive
Helen Stevenson2
54
Patrick Martell
Richard Smothers2
44
Christopher Humphrey2 18
Carolyn Dawson2
3
Jamie Murray Wells2
3
Charles Bligh2
40
Paul Dean2
16
Vicky Griffiths2
40
John Poulter2
-
Total
139 106
52
-
-
-
-
41
47
43
29
870 908
9
2
5
-
-
-
-
-
-
-
-
-
-
-
16
- 120
27
-
-
15
-
8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23 147
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
1
8
-
-
-
-
-
-
-
-
-
-
-
18
- 1004
-
-
-
25
-
20
- 220
- 338
- 558
27
- 101
-
74
-
-
- 135 405 135 405
-
- 253
-
- 253
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45 100
- 139 106 139 106
52
52
-
-
-
-
-
-
-
-
-
-
-
-
-
41
41
-
47
47
-
43
43
29
29
-
-
-
-
-
-
-
-
-
-
-
- 1,151 976 904 976 247
54
44
18
3
3
40
16
40
-
54
44
18
3
3
40
16
40
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. The section below headed ‘Retirement Benefits’ explains how those benefits have been calculated and presented in the above tables.
2. The fees show the portion of the year during which they were a Director during 2023 or 2022, as relevant.
3. Total fixed remuneration is the aggregate of the base salary, pensions and benefits, and total variable remuneration is the aggregate of the
bonus and vested LTIPs and Mark Cook's bonus on joining (see 4) included under 'Other'.
4. Mark Cook received a bonus on joining of £100,000, in recognition of the bonus he forfeited from his former employer when he left to join
RM (compared to an estimated target bonus of £150,000). This is shown in addition to the RM FY23 annual bonus amount of £120,000.
• The aggregate emoluments (being salary/fees, bonuses, benefits, and pension allowances) of all Directors for 2023 was £1,151k (2022: £976k).
The following provides details of how the ‘single figure’ has been calculated:
Annual Salary:
The annual salaries of the Executive Directors on appointment were Chief Executive £365,000
(from 16 January 2023) and Chief Financial Officer £275,000 (from 29 August 2023).
Taxable benefits: These comprise the benefits noted in Part B above. The figure included in the above table in respect of such benefits
Annual bonus:
Long Term
Incentive Plans:
is calculated based on the taxable value of such benefits.
The Committee decided that the bonuses payable to the Executive Directors for the year ending 30
November 2023 are as shown in the table above and relate to the attainment of Transformation strategic
objectives as described below.
No LTIP awards held by the current Executive Directors vested during the year ended 30 November 2023.
The unvested LTIP awards held by the former directors, Neil Martin and Mark Berry lapsed on cessation.
In February 2023, the performance period ended for the LTIP awards granted in March 2020. The Earnings Per
Share and relative TSR performance conditions for these 2020 awards were not met and therefore the Board
did not approve vesting of the award.
Past Directors: Neil Martin stood down on 15 January 2023 as Chief Executive and on 1 April 2023 as a member of the Board. Neil
continued to receive his normal fixed pay in accordance with his contractual entitlements for his notice period
until his employment ended on 10 July 2023 with the balance of £182,500 paid to him in lieu of notice, plus a
termination payment of £10,000. Neil did not receive a bonus for the 2022 or 2023 financial years and all of his
unvested LTIP awards lapsed when he left the business.
Retirement benefits are provided via a defined contribution and/or cash supplement. Contributions for the
current Executive Directors have been set at 4.5%, being the same contribution rate used for the majority of the
UK workforce (UK employees receive contribution rates at 4.5% to 7%, depending on employee salary sacrifice
election).
There were no termination payments in the year other than that described above (see Past Directors).
Chair and Non-Executive fees were reviewed against relevant market data and increased in August 2023.
Details of Non-Executive Director fees for 2023 and the preceding year are summarised in paragraph 8
(Statement of Implementation), below.
Retirement
benefits:
Termination
Payments:
Non-Executive
Pay Review:
109109
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
FY23 Annual bonus metrics
As described in the Remuneration Committee Chair’s letter introducing this report, FY23 annual bonuses were paid to the
Chief Executive and the Chief Financial Officer in relation to the attainment of Transformation strategic objectives. This
totals one third of the maximum opportunity, pro-rated for the CFO based on his start date. These objectives included the
following matters.
•• Activities to deliver a successful Extension and Amendment of the banking facility, and pension agreement on funding
and security.
•• Produce a comprehensive business transformation plan and gain stakeholder engagement support.
•• Make key appointments for future leaders to support a change culture to enact the plan, while reducing cost and
dependency on interim resource and external advisors.
•• Creation of a strategic hypothesis with execution plan, including Enterprise Architecture roadmap to deliver the strategy,
a digital platform and product development roadmap.
•• In addition, the Chief Executive Officer was also recognised for contribution, leadership and execution with the sale
of Integris.
Early in the 2023 period, Group Adjusted Operating Profit and Cash Flow targets were set. However, the commercial
circumstances of the Group in FY23, meant that it was inappropriate to continue to apply those targets. Accordingly, no
bonus was payable in respect of those aspects of performance. The Company regards the originally set targets for FY23 for
Group Adjusted Operating Profit and Cash Flow as commercially sensitive and accordingly these are not disclosed.
2. Directors’ Long-term Incentive Plans (AUDITED)
During the year ended 30 November 2023, the following long-term incentive awards1 were made.
Name
Mark Cook
Type of
share
award
Grant date
Nil cost
Option
16 January
2023
Simon
Goodwin
Nil cost
Option
29 August
2023
No. of
Shares
under
award
Face value
of award
at grant
£0002
% of base
salary
Percentage
that would
vest at
threshold
performance
The end of the
period over
which the
performance
conditions
must be
fulfilled
873,763
547.8
150.1%
25% 30
November
2025
300,000
188.1
68.4%
25% 30
November
2025
A summary of performance
targets and measures3
•• 40% – relative TSR
•• 60% – absolute TSR
•• Underpin: Committee
to consider overall
performance of the
Company and the
contribution of the
individual before
vesting
1. Awards granted under the LTIP Scheme (RM Performance Share Plan 2019).
2. The face value of the award has been calculated by multiplying the maximum number of shares in the award by the average share price over
the five preceding trading days on the date of grant of the award. The face values of award were 62.7p and 62.2p in January and August,
respectively. The exercise price per share is £0.00.
3. Forty percent (40%) of the award is based on the Company’s relative TSR performance for the period from 1 December 2022 to 30 November
2025. The Company’s relative TSR performance shall be measured against the TSR performance of the companies within the FTSE Small Cap
(ex IT) Index (Comparator Group) over the above period. Vesting will occur on a sliding scale between median (25%) and upper quartile or
above (100%). Sixty percent (60%) of the award is subject to a performance condition relating to the performance of the Company's TSR
against absolute targets also measured at the end of the same three-year period and vesting on a sliding scale between 120p (25%) and 195p
or above (100%). The award is also subject to an underpin whereby the Committee will consider overall performance of the Company and the
contribution of the individual before the award may vest.
• This table has been audited.
110110
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
3. Performance graph
- Total Shareholder Return
The following graph illustrates
the Company’s Total Shareholder
Return for the ten years ended
30 November 2023, relative to
the performance of the FTSE
SmallCap (ex. Investment Trusts).
The FTSE SmallCap represents a
broad equity index of which the
Company has been a constituent
member for the majority of the
period shown and, therefore, has
been selected as a comparator
for this reason.
Total shareholder return value (£)
RM
FTSE SMALL CAP
400
350
300
250
200
150
100
50
0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
4. History of Chief Executive pay
The table below sets out details of:
•• The total pay for each of the persons who have
performed the role of Chief Executive for the current
year and the preceding ten financial years. The ‘single
figure’ is calculated using the same methodology as that
used for the ‘Single Figure’ of remuneration table in
paragraph 1 above.
•• The pay-out of incentive awards as a proportion of the
maximum opportunity for the period.
Year
2014
2015
2016
2017
2018
2019
2020
20211
2022
20232
Chief Executive
David Brooks
David Brooks
David Brooks
David Brooks
David Brooks
David Brooks
David Brooks
David Brooks
Neil Martin
Neil Martin
Neil Martin
Mark Cook
Single Figure
(£000)
576
1,246
655
713
982
553
792
133
628
405
135
558
Annual variable element
award rates against
maximum opportunity
Long-term incentive
vesting rates against
maximum opportunity
75%
50%
45%
73%
64%
41%
0%
0%
35.8%
0%
0%
34%
0%
91%
100%
36%
100%
0%
100%
0%
38.5%
0%
0%
0%
1. David Brooks from 1 December 2020 to 28 February 2021. Neil Martin from 1 March 2021 to 30 November 2021.
2. The 2023 figures represent the single figure of total remuneration for Neil Martin from 1 December 2022 to 16 January 2023 and Mark Cook
from 16 January 2023 to 30 November 2023.
111111
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
5. Relative importance of spend on pay
The following table sets out, in respect of the year ended
30 November 2023 and the immediately preceding financial
year, the total remuneration paid to all employees as compared
to other significant distributions and payments.
Total remuneration to
employees1
Dividends paid²
Corporation tax paid³
Defined benefit pension cash
contribution³
2023 (£'m)
2022 (£'m)
63.9
65.0
0
0.4
4.5
2.5
(0.9)
4.5
1. Includes remuneration paid to Executive Directors. Note 7 of the
financial statements shows how this has been calculated, figures for
social security costs and share-based payments have been excluded.
2. These figures have been extracted from Note 12 of the Financial
Statements.
3. These payments have been added for context as other significant
payments made by the Company. These figures have been
extracted from the Cash Flow Statement.
6. Percentage change in remuneration of Directors
The following tables set out the percentage change for the following elements of remuneration paid to Directors and UK
employees over the periods outlined below.
Executive Director
Remuneration Elements
% Change in Year Ending
30 November
2023
30 November
2022
30 November
2021
30 November
2020
Mark Cook
Simon Goodwin
Neil Martin
(Resigned 1 April 2023)
Mark Berry
(Resigned 15 August
2022)
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Total UK Employees
Base Pay/Fees
Taxable Benefits
Annual Bonus
n/a
n/a
n/a
n/a
n/a
n/a
-67%
-67%
-
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
4.8%1
33.0%
0.0%
-2.7%
-3
-2.4%
-0.5%
-
-100.0%
273.6%2
0.0%
n/a
n/a
-6.97%
4.11%
0
282.2%2
-
5.46%
-10.9%
-3
0.0%
-
1.38%
12.9%
-
n/a
n/a
n/a
0.56%
2.0%
-34.0%
1. The percentage change in salary of Neil Martin is due to a full year of Chief Executive remuneration.
2. Percentage change due to partial year.
• RM plc does not have any employees. The comparator group therefore comprises all employees of the UK subsidiaries (excluding Directors)
who were employed throughout the full financial year on a full-time equivalent basis.
• The elements of remuneration have been calculated based on pay during the period compared with the previous year.
• No bonus paid for the period 1 December 2021 to 30 November 2022. Bonus includes annual bonus and commission only and not any other
non-performance related payments made to employees. Bonuses in table 6 relate to those actually paid in respect of the years ended 30
November 2021 and 30 November 2022.
112112
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
Non-Executive Director
Remuneration Elements
% Change in Year Ending
30 November
2023
30 November
2022
30 November
2021
30 November
2020
Helen Stevenson
(appointed as Chair
16 February 2022)
Patrick Martell
(Resigned 31 December
2023)
Richard Smothers
(appointed 3 January
2023)
Christopher Humphrey
(appointed 7 July 2023)
Carolyn Dawson
(appointed 1 November
2023)
Jamie Murray Wells
(appointed 1 November
2023)
Charles Bligh
(Resigned 31 October
2023)
Paul Dean
(Resigned 1 April 2023)
Vicky Griffiths
(Resigned 6 October
2023)
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
Base Pay/Fees
Taxable Benefits
Annual Bonus
31.00%
n/a
n/a
3.85%
n/a
n/a
0.00%
n/a
n/a
0.00%
n/a
n/a
0.00%
n/a
n/a
0.00%
n/a
n/a
-2.40%
n/a
n/a
-66.0%
n/a
n/a
0.0%
n/a
n/a
5.9%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
7.5%
n/a
n/a
6.5%
n/a
n/a
-6.97%
17.5%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.0%
n/a
n/a
0.0%
n/a
n/a
0.0%
n/a
n/a
n/a
n/a
n/a
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.0%
n/a
n/a
0.0%
n/a
n/a
0.0%
n/a
n/a
• Individuals who were no longer Directors in the year ending 30 November 2023 have not been included in the above table. Details of their
change in remuneration are detailed in previous Annual Reports to the extent this was required to be provided. These are available at www.
rmplc.com in the Reports section.
113113
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
7. Chief Executive pay ratio
The following table sets out the Chief Executive pay ratios
for the year ended 30 November 2023. This compares the
Chief Executive’s total remuneration (aggregating the amounts
for the periods that Neil Martin and Mark Cook held the role,
as shown above in paragraph 4 of this Part C) with the
equivalent remuneration for the employees paid at the 25th
(P25), 50th (P50) and 75th (P75) percentile of RM's UK
workforce. The total remuneration for each quartile
employee, and the salary component within this, is also
outlined in the table below.
Our median for all employees to Chief Executive pay ratio
is 14.1:1, which is based on a blended CEO Single Figure of
£608,632, covering both Neil Martin’s tenure and Mark Cook.
Year
2023
2022
2021
2020
Method
25th Percentile Pay Ratio
Median Pay Ratio
75th Percentile Pay Ratio
A
A
A
A
20.8:1
15.6:1
25.6:1
33.3:1
14.1:1
11.2:1
18.3:1
23.9:1
9.6:1
7.4:1
12.1:1
15.8:1
The table below provides further information on the total remuneration figure used for each quartile employee, and the
salary component within this.
Year
2023
2023
Salary
Total Pay
25th Percentile
£28,000
£29,260
Median
£41,108
£43,013
75th Percentile
£58,900
£63,374
• Method A was chosen as the statistically most accurate calculation. The total remuneration on a full-time equivalent basis as of 30 November
2023 for all UK employees was calculated and employees ranked accordingly.
• Full-time equivalent P11D values for benefits, such as private medical healthcare, have been used for anyone in receipt of the particular benefit
as of 30 November 2023.
• Pension values are not calculated on the same basis as the Chief Executives’ figure, but rather based on the employer contribution as a
percentage of salary as of 30 November 2023. This approach allows meaningful data for a large group of individuals to be obtained in a more
efficient way.
• Chief Executive pay is a blended value based on the single figure of remuneration for Neil Martin to 15 January 2023 and the corresponding
value for Mark Cook to 30 November 2023, as disclosed in Part C, paragraph 1.
• The median pay ratio is considered consistent with the pay, reward and progression policies for the Company’s UK employees taken as a whole.
8. Statement of implementation
This section sets out how the Policy will be implemented in the year commencing on 1 December 2023.
114114
RM plc Annual report and financial statements 2023
Corporate governance Remuneration committee report continued
Remuneration in 2024
Salary and fees: It is proposed that the Executive Directors
will receive pay rises in line with increases for the general
workforce of 3%. The salaries of the Chief Executive and
Chief Financial Officer will increase to £375,950 and
£283,250, respectively. An increase of 3% is also applied to
the Chair and NEDs base fees.
Executive
Mark Cook
Simon Goodwin
Non-Executive
Chair (Including the Chair of Nomination
Committee)
Non-Executive Director base fee
Senior Independent Director (additional fee)
Chair of Remuneration Committee/
Designated NED for HR (additional fee)
Chair of Audit and Risk Committee
FY24 £000s per
annum (FY23)
376 (365)
283 (275)
151 (147)
46 (44)
5 (5)
7 (7)
7 (7)
Benefits and pension benefits: These are expected to
remain unchanged, as stated in paragraph 1 of Part C above.
Bonus: The Annual Bonus for FY24 will operate as in past
years and in line with the Policy. The Committee will
determine appropriate metrics for the annual bonus, which
can support both financial performance and strategic
developments as the Committee determines. Due to issues
of commercial sensitivity, it is not considered that it is in
shareholders’ interests to disclose any further details of
these targets, but we are committed to provide appropriate
levels of disclosure of these performance measures and
performance against them in next year’s Annual Report and
Accounts. The maximum bonus levels available will be in
line with the Policy.
LTIP awards: It is anticipated that, during the year ending
30 November 2024, an award will be made to each of the
Executive Directors under the RM plc Performance Share
Plan 2019 totalling 170% of salary for the Chief Executive
and 120% of salary for the CFO. Those awards will be of
nil-cost options and in line with the Remuneration Policy.
The appropriate performance conditions will be decided at
the time of the award, but vesting is expected to be based
on performance against a blend of both absolute Total
Shareholder Return (TSR) and relative TSR performance
based on the following:
1) Forty percent (40%) of the Award is subject to a
performance condition comparing the Company's Total
Shareholder Return (TSR) against a comparator group of
FTSE Small Cap Index (excluding investment trusts)
companies over a period of three years commencing on
1 December 2023 and ending on 30 November 2026.
2) Sixty percent (60%) of the Award is subject to a
performance condition relating to the performance of
the Company's TSR against absolute targets ranging
from 120p to 195p, with this condition also measured at
the end of the same three-year period.
It is intended that the measures will encourage the
generation of sustainable long-term returns to
shareholders.
9. Statement of shareholder voting
The following table shows the results of the advisory vote
on the 2022 Directors’ Remuneration Report (at the 2023
AGM) and the binding vote on the Directors’ Remuneration
Policy at the 2021 AGM:
% of votes in
favour
% of votes
against
99.67%
0.33%
Number
of votes
withheld
8,500
87.23%
12.77%
8,833,873
2023 AGM
– Resolution
to approve
the Directors'
Remuneration
Report
2021 AGM –
Resolution
to approve
the Directors'
Remuneration
Policy
115115
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
10. Directors’ shareholdings (AUDITED)
The beneficial interests of the Directors including connected persons in the ordinary shares of RM plc as of 30 November
2023 were:
Mark Cook
Simon Goodwin
Helen Stevenson
Patrick Martell
Richard Smothers
Christopher Humphrey
Carolyn Dawson
Jamie Murray Wells
Charles Bligh
Paul Dean
Vicky Griffiths
Neil Martin
Holding as of
30 November
20233
Vested but
unexercised
scheme
interests
Current
holding as %
of base salary1
Shareholding
policy met2
Holding as of
30 November
2022
14,000
-
150,000
75,000
26,236
-
-
-
n/a
n/a
n/a
n/a
-
-
-
-
-
-
-
-
-
-
-
-
1.8%
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
-
n/a
No
No
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
-
-
-
-
5,000
-
-
-
-
-
20,000
2,900
n/a
227,562
1. Calculated based on the average share price for the period 1 December 2022 to 30 November 2023 (67.31p) and base salaries as of 30
November 2023.
2. The Directors’ Remuneration Policy requires current Executive Directors to build and maintain a shareholding requirement of at least 200% of
base annual salary within five years of the first opportunity for an LTIP to vest.
3. There have been no changes in any of the above shareholdings since 30 November 2023 at the date of this report.
• Where a Director stepped down from the Board during the year (their interests above are shown at the date they left the Company).
11. Directors’ interests in share plans (AUDITED)
As of 30 November 2023, the Executive Directors had the following interests in the Company’s share plans:
Date of Grant
No. of shares/options
Performance
Conditions
LTIP Awards1
Mark Cook
Simon Goodwin
16 January 2023
29 August 2023
873,763
300,000
See paragraph 2 of
this Part C
Share price at grant
62.7 pence
62.2 pence
1. Granted under the ‘RM plc Performance Share Plan 2019’. All LTIP awards are subject to a minimum vesting period of three years.
116116
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
12. Details of Directors’ service contracts
Relevant information relating to the Service Contracts of
the Directors is set out in Part B.
During the period, neither the Chief Executive nor the Chief
Financial Officer held any Non-Executive Director positions
with other companies.
13. Remuneration Committee details
The Remuneration Committee (Committee) operates under
Terms of Reference approved by the Board. These can be
found on the Group’s website at www.rmplc.com.
No Director participates in deciding their own remuneration.
Committee membership and attendance
The Remuneration Committee, during the year ended
30 November 2023, comprised of Christopher Humphrey
(Chair), Patrick Martell, Paul Dean, Vicky Griffiths, Helen
Stevenson, Carolyn Dawson, Jamie Murray Wells and
Richard Smothers at such times as they were members of
the Board. Please note that Patrick Martell was Chair of the
Committee until 1 November 2023.
The members of the Committee comprise the independent
Non-Executive Directors and the Chair of the Board.
The Remuneration Committee met five times during the
period, attendance is set out below. The Committee also
approved several matters during the year by written resolution,
additional virtual meetings, and Sub-Committee meetings.
No. of meetings held in the
period/Eligible to attend
Christopher Humphrey1
Patrick Martell
Helen Stevenson
Paul Dean2
Vicky Griffiths3
Carolyn Dawson4
Jamie Murray Wells4
Richard Smothers
2/2
5/5
5/5
2/2
3/3
1/1
1/1
5/5
1 Joined the Board on 7 July 2023 and was appointed Chair of the
Remuneration Committee on 10 October 2023.
2 Ceased being a Director on 1 April 2023.
3 Ceased being a Director on 6 October 2023.
4 Joined the Remuneration Committee with effect from 1 November
2023.
Major activities of the Remuneration Committee
Several key activities were undertaken throughout the year
by the Committee, including the following:
•• considered and agreed remuneration arrangements for
incoming Chief Executive, Mark Cook, including one-off
joining bonus in recognition of the bonus he forfeited
from his former employer;
•• considered and agreed termination arrangements for
outgoing Chief Executive Neil Martin (summarised in
paragraph 1 of Part C of this report, above);
•• approval of the 2022 Directors’ remuneration report;
•• review and approval of 2023 annual bonus and LTIP
awards, including proposed targets;
•• review of Directors’ Remuneration Policy in preparation
for renewal at 2024 AGM;
•• monitoring employees pay review and gender pay gap
reporting; and
•• appointment of an independent remuneration advisor,
FIT Remuneration Consultants LLP.
Advisor to the Remuneration Committee
During the year, FIT Remuneration Consultants LLP (FIT)
were appointed as advisor to the Committee. FIT is a founder
member of the Remuneration Consultants’ Group and adhere
to its code of conduct. Fees totalling £36,725 plus VAT have
been paid for its services during the year for the provision
of advice to the Committee on various aspects of
remuneration including advice on the remuneration policy
and implementation of employee share schemes. The
Committee has reviewed the quality of the advice provided
and whether it properly addressed the issues under
consideration and is satisfied that the advice received during
the year was objective and independent. FIT has no personal
connection to the Company or its Directors. FIT’s fees are
charged on the basis of its normal terms of business for
advice provided.
Advice and support have been provided to the Remuneration
and Nomination Committees by the Company Secretary
and People function, including advice and support on
recruitment of key roles, external benchmarking, service
contracts and incentive schemes based on information
obtained through third-party sources where appropriate.
117117
RM plc Annual report and financial statements 2023 Corporate governance Remuneration committee report continued
14. UK Corporate Governance Code 2018
considerations and strategic alignment
Remuneration within RM is designed to support the
business strategy and long-term sustainable business
success. The performance measures selected for variable
pay schemes focus on rewarding performance in line with
both short- and long-term business objectives. These are
reviewed to ensure that they reward profitable performance
in the short term as well as long term sustainable success
aligned to delivering shareholder value.
Factors in provision 40
Factors in provision 40
RM Policy and practice
RM Policy and practice
In preparing the revised and updated Directors’
Remuneration Policy, the Committee has considered the
factors set out in provision 40 of the 2018 Corporate
Governance Code. In the Committee’s view, the
Company’s Directors Remuneration Policy and current
practices are consistent with these provisions:
Clarity
Simplicity
Risk Management
Proportionality
The Policy and arrangements for Directors are clearly described each year in the Annual Report.
The disclosures related to remuneration, the bonus targets, and the performance metrics for
LTIPs are clear. This promotes effective engagement with shareholders and the workforce.
The Committee is mindful of the need to avoid overly complex remuneration structures which
can be misunderstood and deliver unintended outcomes. Remuneration for Directors and the
workforce are therefore simple and easily understood. Only a small number of targets are used
for bonuses and LTIPs and these are based on the Company’s performance.
Bonus and LTIP awards are linked to performance, have stretching targets with low percentage
pay-outs at threshold. The Committee has broad discretion to reduce bonuses if it does
not consider the formulaic outcome to be appropriate in the circumstances and malus and
clawback provisions can also be operated where appropriate.
The Committee takes account of underlying business performance and the experience
of shareholders and other stakeholders when determining outcomes to ensure deficient
performance is not rewarded. The Committee also considers the wider workforce pay and
policies.
Predictability
The report includes scenario charts showing the potential pay-out at various levels and all
awards are subject to maximum levels as set out in the Policy.
Alignment with Culture Metrics for awards are closely aligned to strategy. The Shareholding Policy and holding periods
provide a clear link to long-term performance and shareholder alignment.
15. Compliance with regulations
This report has been prepared in accordance with Schedule
8 of the Large and Medium-Sized Companies and Group
(Accounts and Reports) Regulations 2008 (as amended).
The Report also meets the relevant requirements of the Listing
Rules of the UK Listing Authority and illustrates how the
principles of the UK Corporate Governance Code relating
to Directors’ remuneration are applied by the Company.
•• The ‘Single Figure of Remuneration’ table in paragraph 1.
•• Total pension entitlements, as described in the notes to
paragraph 1.
•• Directors’ shareholdings, as set out in paragraph 10.
•• Directors’ interests in share plans, as set out in
paragraphs 1, 2 and 11.
•• The ‘Past Directors’ and ‘Termination Payments’ as
described in the notes to paragraph 1.
The Group’s auditors are required to comment on whether
certain parts of the Group’s Remuneration Report have
been prepared in accordance with Schedule 8 of the Large
and Medium-Sized Companies and Group (Accounts and
Reports) Regulations 2008. Accordingly, the following
paragraphs of this Part C of this report have been audited
by Deloitte LLP:
By Order of the Board
Christopher Humphrey
Chair, Remuneration Committee
14 March 2024
118118
RM plc Annual report and financial statements 2023 Corporate governance
Corporate governance
ESG committee report
On behalf of the Board, I am pleased to present the
Environmental, Social and Governance (ESG) Committee
Report for the year ended 30 November 2023.
The ESG Committee (Committee) operates under terms of
reference approved by the Board, we review these annually
and refer them to the Board for approval. These can be
found on the Group’s website at www.rmplc.com.
On Environment, the Committee monitors the operation of
the Group’s Sustainability and Climate Change governance
strategic initiatives, scrutinising the development and
implementation of changes in process and practice, as well
as advising on the direction of and supporting the delivery
of RMs environmental ambitions and obligations. One
recent example would be the review of energy use and
travel throughout the business.
On Social matters the Committee drives an ambition to
deliver positive outcomes for our customers, suppliers and
other stakeholders through our product design, our services
and delivery. An example of this can be seen in the positive
impact that our Special Education Needs and Disabilities
(SEND) resources have had on primary schools, and the
inclusive changes to the way we assess learners through
the examination marking process. Internally the Committee
reviews issues and opportunities concerning ethics, rights
and equity, for example, our review of Modern Slavery
requirements both internally and in our supply chain.
The Committee’s responsibility over Governance is to ensure
compliance with legislative, and regulatory standards.
In all these areas, we support management to embed a
strong culture and set of behaviours that reinforce ESG
objectives and we monitor progress on these areas at
Committee meetings where we analyse results against
published and internal targets. This can be seen in our
commitment to Net Zero on scopes 1 & 2 by 2035 and
Net Zero on scope three by 2050, as we monitor our
energy performance and associated carbon emissions,
against the target and examine ways to continue to improve.
Overview of 2023:
•• Reconfirmed our commitments particularly the
Environmental goals.
•• Reduced our carbon emissions by 25% through real
estate rationalisation, less employee travel by air, trains
and cars in service of our RM Net Zero goal. Detailed
analysis of RM plc's carbon emissions is reported on
page 56 of the Sustainability report.
•• Assessed the legislative landscape, including requirements
and compliance to the Task Force on Climate-related
Financial Disclosures (TCFD) page 48, Streamlined Energy
and Carbon Reporting (SECR), Climate related financial
discloses (CFD). RM plc's disclosures in relation to these
are found in the Sustainability Report on page 42. During
FY24 RM will undertake the assessments and reporting
required to comply with Energy Saving Opportunities
Scheme (ESOS).
•• Renewed Executive support of the Equity, Diversity and
Inclusion Networks along with allocated dedicated time
to focus on their crucial activities and compensation to
recognise them for their hard work.
•• Supporting and influencing our customers and partners
by offering methods through which they can improve
their environmental goals.
The ESG Committee met twice during 2023 in line with its
published meeting cadence in September and October 2023.
As the new Chair of the ESG committee, I look forward to
the continuing work of this committee in providing ESG
governance, as well as the identification and support of
strategic initiatives that carry a high degree of ESG
materiality and alignment with business priorities.
No. of meetings
held in the period/
Eligible to attend
Christopher Humphrey
Patrick Martell
Helen Stevenson (October Chair)
Vicky Griffiths (September Chair)
Mark Cook
Simon Goodwin
Charles Bligh
Richard Smothers
By Order of the Board
Jamie Murray Wells
Chair of, ESG Committee
2/2
2/2
2/2
1/1
2/2
2/2
2/2
1/2
119119
RM plc Annual report and financial statements 2023 Corporate governance
Directors’ report
The Directors submit their report together with the audited
consolidated and Company Financial Statements for the
year ended 30 November 2023.
Directors
Details of those Directors who have held office during the
financial year and up to the date of signing this report and
any changes since the start of the financial year are:
The Strategic Report on pages 8 to 67 includes an indication
of likely future developments in the business of the Group
and details of the Company’s business model and strategy.
The Corporate Governance Report on pages 70 to 125 is
incorporated into this report by reference.
Annual General Meeting
The forthcoming Annual General Meeting will be held on
9 May 2024 at 142B Park Drive, Abingdon, Oxfordshire
OX14 4SE, at the time set out in the Annual General Meeting
notice. The notice of the Annual General Meeting contains
the full text of resolutions to be proposed.
Articles
The constitutional documents can only be amended, or
replaced, by a special resolution passed in a General Meeting
by at least 75% of the votes cast and are available at
www.rmplc.com.
Auditor: Independence and disclosure of
information to auditor
As far as each of the Directors is aware, there is no relevant
audit information (as defined by section 418(3) of the Companies
Act 2006) of which the Company’s auditor, Deloitte LLP, is
unaware and each of the Directors confirms that all steps
have been taken that ought to have been taken, as a Director,
to make himself or herself aware of any relevant audit
information and to establish that the Company’s auditor
has been made aware of that information.
A resolution to reappoint Deloitte LLP as auditor of the
Company will be proposed at the next Annual
General Meeting.
120120
Helen Stevenson
Richard Smothers (from 3 January 2023)
Mark Cook (from 16 January 2023)
Neil Martin (until 1 April 2023)
Simon Goodwin (from 29 August 2023)
Charles Bligh (until 31 October 2023)
Paul Dean (until 1 April 2023)
Vicky Griffiths (until 6 October 2023)
Patrick Martell (until 31 December 2023)
Christopher Humphrey (from 7 July 2023)
Carolyn Dawson (from 1 November 2023)
Jamie Murray Wells (from 1 November 2023)
Biographical details of the current Directors are given in the
Board of Directors section of the Annual Report on pages
70 to 71.
The appointment and removal of Directors is governed by the
constitutional documents of the Company and the Companies
Act 2006. Under the constitutional documents of the Company,
either the shareholders of the Company by ordinary resolution,
or the Board, can appoint a Director. The appointment can
be either to fill a vacancy or as an addition to the existing
Board, provided that the maximum number of Directors shall
in no event exceed 12. At the forthcoming Annual General
Meeting, all Directors will stand for election or re-election in
accordance with best practice and guidance set out in the
UK Corporate Governance Code. Directors can be removed
pursuant to an ordinary resolution passed by the Company.
All Directors have either a letter of appointment or a service
contract, details of which can be found in the Remuneration
Report on page 96.
Director insurance and indemnification
The Group has provided indemnity insurance for the Directors
and officers of Group companies during the financial year
and at the date of signing this report. All the Directors and
officers of Group companies also have the benefit of a Deed
of Indemnity entered into with the Company in respect of
liabilities which may attach to them in their capacity as Directors
of the Company. These provisions are qualifying third-party
indemnity provisions as defined by section 234 of the
Companies Act 2006.
RM plc Annual report and financial statements 2023 Corporate governance Directors’ report continued
Directors’ powers
The Board manages the business of the Company under
the powers set out in its constitutional documents, which
power is subject to the provisions of the Companies Act
2006 and to any directions given by special resolution of
the Company. These powers include the Directors’ ability,
on behalf of the Company, to allot or purchase shares in
the Company, the exercise of which in each case is subject
to the Companies Act 2006 which provides, among other
things, that the Directors must seek shareholder authority
for the allotment of shares in the Company and the market
purchase of shares in the Company. Accordingly, the
Directors seek shareholders’ authority to allot shares in the
Company, and to purchase the Company’s own shares in
the market, at each AGM.
Directors’ responsibilities statement
The Directors’ responsibilities statement on page 124 is
incorporated by reference into this report.
Dividends
No dividend has been paid this year and, following the recent
amendment and extension of the Company’s banking facilities,
a restriction on dividend distribution has been imposed until
the Company reduces net debt leverage to LTM EBITDA
(post IFRS16, see note 23) to less than 1x for two
consecutive quarters. The Directors recognise that the
dividend is an important component of the total investment
return and are committed to the reinstatement of the dividend
at the earliest opportunity.
Management report
For the purposes of compliance with DTR 4.1.5R(2) and
DTR 4.1.8R, this Directors’ Report, together with the Strategic
Report and the material incorporated by reference into each
report, comprise the Management Report. As permitted,
some of the matters to be included in the Directors’ Report
have been included in the Strategic Report such as the
business review, future prospects and principal risks
and uncertainties.
Overseas branches
The Group has an overseas branch in Singapore.
Research and development
The Group continues to develop and maintain its existing
software products while staff work to develop new and
more effective systems and products. The Group incurred
£4m of research and development in the year, which was
expensed in the Income Statement (2022: £3.1m). This
primarily relates to product research, maintenance and
related expenditure which does not meet
capitalisation criteria.
Share capital
The Company has one class of share capital, ordinary shares.
All the shares rank pari passu. There are no special control
rights in relation to the Company’s shares. On a show of hands,
each shareholder present in person or by proxy at a general
meeting has one vote and, on a poll, every shareholder
present in person or by proxy, has one vote for each share
which they hold. All the shares in the Company carry the
same rights, include the right to participate in dividends and
in any distribution of surplus assets on a winding-up. Under
the Company’s constitutional documents, the right to vote
in respect of any share is subject, among other things, to
there being no unpaid call on that share nor there being
any outstanding notice given under section 793 of the
Companies Act 2006 in respect of that share. The right to
vote is also subject to the provisions of the Companies Act
2006. Electronic and paper proxy appointments and voting
instructions must be received by RM’s registrar, Link Group,
not less than 48 hours (excluding, in the calculation of such
time period, any part of a day that is not a working day)
before the time of the holding of the relevant meeting or
adjourned meeting.
As at 30 November 2023, the RM plc Employee Share Trust
owned 618,796 ordinary shares in the Company (0.74%) of
the issued share capital) to satisfy awards under the Company’s
employee share plan. Any voting or other similar decisions
relating to those shares would be taken by the Trustees, who
may take account of any recommendation of the Board of
the Company. The Trustees have waived the right to receive
dividends on shares held in the Company. Employees, with
vested share plan awards whose shares are subject to a
holding requirement and held on their behalf by the Trust
on a nominee basis, are able to give directions to the Trust
to vote on their behalf and to receive dividends in relation
to those shares.
121121
RM plc Annual report and financial statements 2023 Corporate governance Directors’ report continued
Shares: Allotment and purchase
At the Annual General Meeting held on 25 May 2023,
members renewed the authority under:
1. section 551 of the Companies Act 2006 to allot ordinary
shares up to an aggregate nominal authority of £639,047.
This authority has not been used since the Annual
General Meeting; and
2. section 701 of the Companies Act 2006 to make market
purchases on the London Stock Exchange of up to
8,387,501 ordinary shares, being 10% of the issued share
capital of the Company as at 18 April 2023. The minimum
price which may be paid for each share is the nominal
value. The maximum price which may be paid for a share
is an amount equal to the higher of (1) 5% above the
average of the middle market quotations of the Company’s
ordinary shares as derived from the London Stock Exchange
Daily Official List for the five business days immediately
preceding the day on which such share is contracted to
be purchased, and (2) the higher of the last independent
trade and the highest current independent bid on the
London Stock Exchange at the time the purchase is carried
out. This authority has not been used since the Annual
General Meeting and the Company did not purchase or
otherwise acquire any of its own shares during the
financial year.
Neither of the above authorities have been utilised since they
were last renewed and the Directors will seek to renew these
authorities at the next Annual General Meeting scheduled
for 9 May 2024.
Significant agreements
The Group enters into long-term contracts to supply IT
products and services to its customers. Wherever possible,
these contracts do not have change of control provisions,
but some significant contracts do include such provisions.
In March 2024, the Company entered into an amended
and extended agreement of the revolving credit facility,
with Barclays Bank plc and with HSBC UK Bank plc, to July
2026. The terms of this facility are outlined on page 207.
Substantial shareholdings
On 30 November 2023, the Company had received notifications in accordance with DTR 5:
Shareholder
Harwood Capital
Avalon UK Limited
Artemis Investment Mgt
Schroder Investment Mgt
No. of voting
rights Direct
10,100,000
15,547,676
0
0
No. of voting
rights Indirect
% of voting rights
as at 30 November
2023
Date of TR1
0
0
0
12.04% 7 November 2023
18.67%
6 October 2023
0%
9 August 2023
11,735,103
13.99%
20 July 2023
The percentage interest is as stated by the shareholder at the time of the notification and current interests may vary.
Between 1 December 2023 and 14 March 2024, the Company received the following notification of interests pursuant to
the DTR 5:
•• a notification from Harwood Capital on 4 January 2024 which notified an increase in their voting rights to 11,100,000
(representing 13.23% of RM plc’s issued share capital carrying voting rights).
•• a notification from Harwood Capital on 19 February 2024 which notified an increase in their voting rights to 11,875,000
(representing 14.16% of RM plc’s issued share capital carrying voting rights).
122122
RM plc Annual report and financial statements 2023 Corporate governance Directors’ report continued
Treasury and foreign exchange
The Group has in place appropriate treasury policies and
procedures, which are approved by the Board. The treasury
function, which reports into the CFO, manages interest rates
for both borrowings and cash deposits for the Group and is
responsible for managing adherence to banking covenants,
and that appropriate facilities are available in order that the
Group can continue to meet its strategic plans.
In order to mitigate and manage exchange rate risk, the
Group routinely enters into forward contracts and
continues to monitor exchange rate risk in respect of
foreign currency exposures.
All these treasury policies and procedures are regularly monitored
and reviewed. It is the Group’s policy not to undertake
speculative transactions which create additional exposures
over and above those arising from normal trading activity.
For further information see Note 31 (Financial Risk
Management) to the Financial Statements.
Additional disclosures
Disclosures required by Schedule 7 of the Large and
Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended), to the extent not
already disclosed or referred to in this report, can be found
on the pages specified in the table below, all of which are
incorporated into this report by reference.
Disclosures required by Listing Rule 9.8.4R can be found on
the pages specified in the table below, all of which are
incorporated into this report by reference. There is nothing
further to disclose pursuant to Listing Rules 9.8.4R:
Allotment for cash of equity securities
Contracts of significance
Directors’ waived emoluments
Dividend waiver
Employee engagement, interests and effect
Employee information, consultation, share schemes and achieving
awareness on financial and economic factors
Employees with disabilities
Financial instruments
Fostering business relationships with suppliers, customers and
others and effect
Greenhouse gas emissions, energy consumption and energy
efficiency action
Interest capitalised and tax relief
Long-term incentive schemes
Political donations
Viability statement
Page
N/A
207
N/A
N/A
59 to 60
59 to 60 and 79 to 80
60 to 61
156
79 to 81
48 to 57
N/A
102
65
34
Approved by the Board and signed on its behalf by
Daniel Fattal
Company Secretary, RM plc
14 March 2024
Registered in England and Wales No 01749877
123123
RM plc Annual report and financial statements 2023 Corporate governance
Statement of directors’ responsibilities
in respect of the annual report and the financial statements
The Directors are responsible for preparing the Annual
Report in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and
parent Company Financial Statements for each financial
year. Under that law the Directors are required to prepare
the Group Financial Statements in accordance with United
Kingdom adopted international accounting standards. The
Directors have chosen to prepare the parent Company
Financial Statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law), including FRS
101 Reduced Disclosure Framework.
Under company law the Directors must not approve the
Financial Statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent Company and of their profit or loss for that period.
In preparing the parent Company Financial Statements, the
Directors are required to:
•• select suitable accounting policies and then apply
them consistently;
•• make judgements and accounting estimates that are
reasonable, relevant, reliable and prudent;
•• state whether Financial Reporting Standard 101 Reduced
Disclosure Framework has been followed, subject to any
material departures disclosed and explained in the
Financial Statements; and
•• prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
In preparing the Group Financial Statements, International
Accounting Standard 1 requires that Directors:
•• properly select and apply accounting policies;
•• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
•• provide additional disclosures when compliance with
the specific requirements in IFRS Standards are insufficient
to enable users to understand the impact of particular
transactions, other events and conditions on the entity’s
financial position and financial performance; and
•• make an assessment of the Company’s ability to
continue as a going concern.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the parent Company and enable them to ensure that its
Financial Statements comply with the Companies Act
2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of
124124
Financial Statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of Financial Statements
may differ from legislation in other jurisdictions.
The Directors consider the Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy,
and provide appropriate guidance on its future prospects.
Responsibility Statement of the Directors in
respect of the Annual Financial Report
Each of the Directors, whose names are listed in the
Directors’ Report, confirm that to the best of our knowledge:
•• the Financial Statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
•• the Strategic Report and Directors’ Report include a fair
review of the development and performance of the
business and the position of the Company and the
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks
and uncertainties that they face.
A copy of the Group Financial Statements is
posted on the Group’s website www.rmplc.com.
This Responsibility Statement was approved by the
Board of Directors and is signed on its behalf:
By Order of the Board
Mark Cook
Chief Executive Officer
14 March 2024
RM plc Annual report and financial statements 2023 Corporate governance Directors duties statement continued
Directors duties statement
The Company’s Directors, individually and collectively,
have acted in a way that they consider, in good faith, is
most likely to promote the success of the Company for
the benefit of all its members as a whole. As highlighted in
the Chair’s statement on page 8, 2023 was a challenging
year for the Group and accordingly the Directors had to
focus on a number of short-term, as well as longer-term,
priorities. The Directors confirm that they have had
appropriate regard to the matters detailed in section
172 of the Companies Act 2006 in making their decisions.
RM has a diverse and wide community of stakeholders, each
with its own interests in and expectations of the Company.
The Board and each Director acknowledges that the success
of RM’s strategy is reliant on the support and commitment
of all the Company’s stakeholders. During the year, the Board
received reports from the business on engagement with
stakeholders and took part in discussions which considered,
where relevant, the impact of the Company’s activities on
its key stakeholders. These activities, together with direct
engagement by the Board and individual Directors with the
Company’s stakeholders, helped to inform the Board in
its decision-making processes.
In this annual report we provide examples of how the
Directors promote the success of RM while taking into
account the consequences of decisions in the long term,
building relationships with stakeholders, and ensuring that
business is conducted ethically and responsibly.
While there are many parts of this annual report which illustrate
how the Directors do this, with the support of the wider
business, the following sections in particular are relevant:
•• Stakeholder engagement page 79 which summarises;
– how Directors have engaged with employees and had
regard to employees’ interests
– how the Directors have had regard for the need to
foster the Company’s business relationships with
customers, employees, shareholders, suppliers and
partners, and the community and environment
•• Sustainability (pages 42 to 47) which outlines;
– The latest steps in the development of our sustainability
strategy and improvement programme which outlines
three areas of focus:
• Carbon reduction and path to net zero
•
Reduction in waste and the potential for the
circular economy
Opportunities to collaborate with partners,
suppliers and customers to expand our impact.
•
– The strengthening of our governance approach
including the formation of a Board ESG Committee
– How we deliver against our purpose of enriching the
lives of learners and the role that each Division plays
in the learning life cycle
– RM’s commitment to local communities and how
they have supported active lives, education and
the environment
A continued understanding of the key issues affecting
stakeholders is an integral part of the Board’s decision-making
process, and the insights that the Board gains through the
engagement mechanisms it has in place form an important
part of the context for all the Board’s discussions and
decision-making processes.
Further information on how the Board have fulfilled their
section 172(1) duties can be found throughout the Strategic
and Governance Reports and the following sections are
incorporated into this report.
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RM plc Annual report and financial statements 2023
Financial statements
Financial statements
128 Independent auditor's report
140 Consolidated financial statements
142 Company financial statements
147 Notes to the financial statements
214 Shareholder information
215 Company information
Financial statements
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RM plc Annual report and financial statements 2023 Financial statements
Independent auditor's report
Report on the audit of the financial statements
1. Opinion
In our opinion:
• • the financial statements of RM Plc (the ‘parent company’)
and its subsidiaries (the ‘group’) give a true and fair view
of the state of the group’s and of the parent company’s
affairs as at 30 November 2023 and of the group’s loss
for the year then ended;
• • the group financial statements have been properly
prepared in accordance with United Kingdom adopted
international accounting standards;
• • the parent company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice, including
Financial Reporting Standard 101 “Reduced Disclosure
Framework”; and
• • the financial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
We have audited the financial statements which comprise:
• • the consolidated income statement;
• • the consolidated statement of comprehensive income;
• • the consolidated and parent company balance sheets;
• • the consolidated and parent company statements of
changes in equity;
• • the consolidated cash flow statement; and
• • the related notes 1 to 34.
The financial reporting framework that has been applied
in the preparation of the group financial statements is
applicable law and United Kingdom adopted international
accounting standards. The financial reporting framework
that has been applied in the preparation of the parent
company financial statements is applicable law and United
Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework” (United Kingdom
Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit of
the financial statements section of our report.
We are independent of the group and the parent company
in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the Financial Reporting Council’s (the ‘FRC’s’)
Ethical Standard as applied to listed public interest entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We confirm that we
have not provided any non-audit services prohibited by the
FRC’s Ethical Standard to the group or the parent company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
• Going concern;
• Allocation and valuation of Consortium assets within the RM Resources division; and
• Impairment risks associated with the valuation of goodwill in the TTS CGU and the
parent company investment in the RM Resources business.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
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RM plc Annual report and financial statements 2023 Financial statements Independent auditor's report continued
Materiality
The materiality that we used for the group financial statements was £400,000 (2022: £500,000)
which was determined based on 0.2% of revenue.
Scoping
Significant
changes
in our approach
The basis for determining materiality differs from the prior year, owing to the continued trading
challenges faced by the Group in 2023. In 2022, a 3-year average of approximately 5% of adjusted
profit before tax was used in determining materiality. Whilst not used as a key benchmark in the
prior year, materiality equated to 0.2% of revenue.
We focused our Group audit scope on the audit work of four components representing the
principal business units, where a full scope audit was performed. Our audit work accounts for
99% of revenue (2022: 98%) and 98% of the Group’s total assets (2022: 92%). We have obtained
coverage of 99% (2022: 93%) of the absolute total of the profit and losses before tax made by
the group’s individual business units.
Our audit approach has been designed to respond to the continued operational challenges faced
by the Group and their impact on the Group’s trading performance.
Immediately prior to the year-end, the Group announced the decision to close the RM Consortium
business, which was part of the RM Resources Division. As a result of the change in strategy in
relation to RM Consortium we identified the valuation of RM Consortium’s assets, including the
allocation of goodwill between TTS and RM Consortium, as a new key audit matter in the current
year owing to the level of judgement involved in separating these into two operating segments.
Given the performance of RM Resources in the year we also identified a new key audit matter
in relation to the impairment review of goodwill remaining in TTS and the carrying value of the
parent company’s investment in RM Resources.
During 2022 we identified a number of control deficiencies, however given that there has been
some progress in remediating the deficiencies identified in key controls, we no longer consider
the impact of control deficiencies to be a key audit matter. We have commented further on the
control environment in section 7 below.
In the prior year we also identified a key audit matter in relation to the revenue recognised on
certain long-term contracts within RM Assessment. As customers now provide greater clarity over
future volumes and there is one fewer year on the most material contracts forecasting accuracy
has improved and audit evidence is more readily available. As a result, we did not identify this as
a key audit matter in the year.
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the group’s
and parent company’s ability to continue to adopt the going
concern basis of accounting is discussed in section 5.1.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group's and parent company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In relation to the reporting on how the group has applied the
UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the Directors’
statement in the financial statements about whether the
Directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
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RM plc Annual report and financial statements 2023 Financial statements Independent auditor's report continued
5. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
5.1. Going concern
Key audit matter
description
130130
During FY23, the group experienced another challenging year, in part due to the loss-making RM
Consortium business, leading to the announcement of its closure. In addition to this, the group was
impacted by an increasingly challenging domestic education market with competing expenditure
priorities and falling budgets resulting in depressed demand from UK schools. As a result, the Directors
reported a material uncertainty related to going concern in the interim results for the six months
ending 31 May owing to a risk of non-compliance with the entity’s banking covenants. The banks
waived the August and November LTM EBITDA covenant tests during the second half of the year.
RM Group has a £70.0m (2022: £70.0m) committed bank facility and agreed an amendment and
extension to this revolving credit facility in March 2024 which matures in July 2026.
As at 30 November 2023 the group was in an adjusted net debt position of £45.6m (2022: £46.8m)
with drawn facilities of £55.0m (2022: £49.0m). The terms of these borrowings are set out in note
23 and for the going concern period include a covenant based on Last Twelve Months EBITDA.
In addition to this, a revised liquidity covenant test has been added as part of the renegotiation,
requiring the group to have liquidity greater than £7.5m on the last business days of the month,
and liquidity not below £7.5m at the end of two consecutive weeks within a month. This is with the
exception of two step-down periods applying from 15 September 2024 to 24 October 2024 and 1
January 2025 to 21 March 2025 during which the minimum liquidity requirement is reduced from
£7.5m to £5.0m.
A three-year income statement and cash flow forecast was produced by management and
approved by the Board. This forecast was provided to the banks and formed the basis of the revised
covenants. This board approved plan represents the base case forecasts and the Directors have also
produced a reasonably plausible downside scenario.
Both the Directors’ base case and reasonably plausible downside scenarios indicate that the banking
covenants will be met throughout the going concern period.
The base case assumes no significant downturn in the UK or International markets from that
experienced in FY23 and assumes a broadly similar macroeconomic environment to that currently
being experienced. Additionally, the base case assumes some operating efficiencies as a result of
restructuring that took place during FY23.
In its financial forecasts, significant judgement was required to decide what assumptions to make
regarding future cash flow forecasts following the continued challenges experienced in FY23.
Consequently, there remains more judgement than would usually be the case in assessing the
financial forecasts for the business and we identified a potential fraud risk in relation to the going
concern assessment. The risk associated with going concern remains aligned with the prior year,
which is reflective of the group’s forecast headroom on its banking covenants, that is at a similar
level to March 2023.
As set out on page 148 the group expects to have sufficient headroom over its facility to be able to
meet covenants throughout the going concern period, with appropriate mitigating actions available
to reduce cash outflows, should the need arise.
The Audit and Risk Committee’s consideration of the judgements taken is on page 90 and the
group’s critical accounting judgment is set out on pages 161.
RM plc Annual report and financial statements 2023
Financial statements Independent auditor's report continued
How the scope of our
audit responded to the
key audit matter
In response to the identified key audit matter we have performed the following procedures:
• we obtained a detailed understanding of the relevant controls that the group has
established regarding the cashflow forecasts as well as the review and approval of the
group’s going concern assessment.
• performed mechanical accuracy testing of the model used to prepare the group’s cash
flow forecast;
• evaluated the consistency of the Directors’ forecasts with other areas of the audit,
including goodwill impairment review;
• assessed the significant events that occurred since the interim announcement when
a material uncertainty was reported. This included reviewing the waivers received for
the August 2023 and November 2023 covenant measurement dates, the closure of RM
Consortium and its subsequent treatment for testing covenants, and the extension and
amendment to financing facilities including revised covenants;
• challenged the key assumptions within the going concern assessment with reference
to historical trading performance, current trading uncertainty and market expectations,
including the likelihood of new product launches, further global expansion and cost
saving initiatives;
• obtained an understanding of the financing facilities available to the group, including
repayment terms and covenants;
• assessed the level of reverse stress testing that can be applied to the group’s funding
position and covenant calculations before a breach arises together with an assessment of
the likelihood of such events occurring;
• assessed and challenged the mitigating actions available to the Directors, as stated
in note 2 on page 149, should these be required to offset the impact of the forecast
performance not being achieved;
• consulted with a restructuring specialist to assist with the challenge of management’s
forecasts and the conclusions reached; and
• challenged the sufficiency of the group’s disclosures over the going concern basis with
reference to our knowledge and understanding of the assumptions taken by the Directors
and FRC guidance.
Key observations
We are satisfied that the adoption of the going concern basis of accounting and the
disclosure in respect of Group’s ability to continue as a going concern are appropriate.
5.2. Allocation and valuation of Consortium assets within the RM Resources division
Key audit matter
description
During FY23, the trading performance of RM Consortium continued to deteriorate, and
revenues of RM Consortium decreased by 42.7% to £19.3m (FY22: £33.7m). The divisional
adjusted operating loss increased to £9.7m (FY22: loss of £5.0m).
In June 2023 the Board’s strategic review started to monitor the results of RM Consortium
separately from those of TTS.
Monitoring the businesses separately and allocating resources based on the financial
information of RM Consortium and TTS as stand-alone businesses led to:
• the identification of RM Consortium and TTS as two different operating and reporting
segments.
• the goodwill previously monitored for the combined RM Resources CGUs being
allocated between RM Consortium and TTS.
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Financial statements Independent auditor's report continued
Key audit matter
description (continued)
How the scope of our
audit responded to the
key audit matter
In November 2023 the company announced the planned closure of RM Consortium.
Goodwill of £10.6m was allocated to RM Consortium, with the remaining £31.6m allocated
to TTS. At year end the goodwill allocated to RM Consortium was fully impaired given there
are no future cashflows to support the carrying value. A critical accounting judgement
in respect of the allocation of goodwill is included within the notes to the financial
statements, as shown on page 161.
Further assets with a carrying value of £28.3m were impaired at 30 November 2023.
Following the closure of RM Consortium in December 2023, assets with a carrying value of
£15.1m were either transferred to TTS, or sold. The balance transferred to TTS post year-
end, included a right of use asset with a carrying value of £10.7m.
As a result of this change in strategy, we identified the valuation of RM Consortium’s assets,
including the allocation of goodwill between TTS and RM Consortium, as a key audit
matter owing to the level of judgement involved in separating these businesses and the risk
of management bias.
Further details are included within the Audit and Risk Committee report on page 89 and
notes 2 and 13 to the financial statements.
In response to the identified key audit matter, we have performed the following
procedures:
• obtained an understanding of the timing of actions which impacted on key judgements
through review of the board minutes and enquiry throughout the audit process;
• obtained an understanding of the relevant controls used by the group when determining
the appropriate accounting treatment and reviewing assumptions applied in determining
the valuation of assets held on the RM Consortium balance sheet;
• challenged the entity’s assessment of relative value of the RM Consortium and TTS
businesses including the use of material margin and revenue over a two-year period.
• challenged key assumptions made by the Directors in the allocation of fixed assets
between TTS and RM Consortium given the separate view of these businesses in FY23. In
doing this, we appraised the purpose of each asset held;
• considered the net realisable value of assets by appraising whether the assets are in
a saleable condition, benchmarking their value against sales post year-end and offers
received;
• involved our valuation specialist to assist with our challenge of the assumptions and
conclusions reached; and
• challenged the sufficiency of disclosures within the financial statements, including that
of the critical accounting judgement. These are shown in notes 2 and 13 to the financial
statements.
Key observations
We are satisfied that the goodwill is appropriately allocated between RM Consortium and
TTS and that the valuation of RM Consortium’s assets is appropriate.
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RM plc Annual report and financial statements 2023 Financial statements Independent auditor's report continued
5.3. Impairment risks associated with the valuation of goodwill in the TTS CGU and the parent company investment in
the RMER Ltd.
Key audit matter
description
How the scope of our
audit responded to the
key audit matter
On 30 November 2023 the RM plc parent company held an investment of £126.1m in the
trading subsidiaries (2022: £126.5m) of which £71.5m (2022: £71.5m) related to RMER Ltd.
The group financial statements had goodwill in the TTS CGU, which represents the assets
and liabilities of RMER Ltd with a carrying value of £31.6m. Goodwill allocated to RM
Consortium of £10.6m was fully impaired at 30 November 2023. The market capitalisation
of the group at 30 November 2023 was c.£44m (2022: c.£39m).
As the performance of the group and company deteriorated during the year, culminating
in the announcement to close RM Consortium in November 2023, and the TTS business
generated lower revenues and profits in FY23 than both the prior year and forecast, we
identified a key audit matter relating to the carrying value of the investment in RMER Ltd for
the parent company financial statements and the carrying value of goodwill in TTS for the
group financial statements.
There is inherent management judgement in determining the key assumptions
underpinning the annual goodwill and investment impairment assessments. This risk
is increased given the continued underperformance in RMER together with ongoing
macroeconomic conditions and pressures on education budgets. With regard to the
valuation of goodwill in the TTS CGU we have focussed the risk on the FY24 cash flow
forecasts and the allocation of only £1.3m (of a total £7m corporate costs) to TTS, as the
impairment review is most sensitive to these assumptions as this generates the baseline
performance required to support the terminal value of the CGU. We have also identified
this as an area for potential management bias, owing to the degree of judgement in
forecasting assumptions that may result in an impairment charge.
Further details are included within the Audit and Risk Committee report on page 91, and
notes 13 and 17 to the financial statements.
In response to the key audit matter we performed the following procedures:
• obtained an understanding of the relevant controls used by the group around the cash flow
forecasts and the data, models and assumptions used within the impairment reviews;
• challenged the appropriateness of key assumptions applied in the entity’s impairment
assessment including cashflow forecasts, discount rate assumptions and long term growth
rates. We used internal specialists to assess the reasonableness of the discount rate and long
term growth rate assumptions. In doing this, we considered the impact of sensitivities in
forecast profitability on long term assumptions that underpin the entity’s impairment model;
• challenged the entity’s assumptions in relation to the short term cashflow forecasts for TTS
which underpin the impairment reviews. Specifically, we challenged assumptions relating to
forecast growth in TTS in FY24 including the evidence to support the launch of new products,
expansion of the overseas distributor network and the entity’s ability to deliver annualised cost
savings and the overall market demand;
• identified the population of costs recorded centrally, assessed the cost drivers used to charge
central costs to each CGU, challenged management to evidence the basis upon which the
remaining central costs are allocated and performed a stand back assessment of the relative
costs charged to each CGU;
• searched for and assessed potentially contradictory sources of evidence including variances
between the group’s market capitalisation and any alternate valuations obtained by the entity,
and the value in use derived from the impairment models;
• we understood historical variances to forecast and challenged the directors as to how this risk
has been mitigated in compiling the FY24 forecasts, and beyond; and
• challenged the sufficiency of disclosures within the financial statements, including that of key
sensitivities. These are shown in notes 13 and 17 to the financial statements.
Key observations
We are satisfied that the carrying value of the parent company’s investment in RMER and
the valuation of goodwill recorded within the TTS business are both appropriately stated.
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6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in
planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent company financial statements
Materiality
£400,000 (2022: £500,000)
£168,000 (2022: £150,000)
Basis for
determining
materiality
We determined materiality based on 0.2% of
revenue (which equates to approximately 8% of
adjusted loss before tax.
In 2022 materiality was based on approximately
5% of 3-year average profit before tax adjusted
for material non-recurring items, (which equated
to 0.2% of revenue.)
The adjustments made to the group’s profit/loss
for non-recurring items in 2022 are consistent
with those presented in Note 6; we did not
exclude amortisation of acquisition-related
intangibles from our determination of materiality
as it is a recurring item.
The basis of materiality is net assets.
Parent company materiality equates to 0.1% of
the parent company’s total assets (2022: 0.3%
of net assets) which is capped at approximately
40% (2022: 30%) of group materiality.
Rationale for
the benchmark
applied
Given the continued trading challenges
experienced by the group during 2023 we have
changed the basis of materiality to revenue.
In doing this, we first considered a number of
different metrics used by investors and other
readers of the financial statements, based upon
our professional judgement.
In determining our materiality, based on our
professional judgement, we have considered
total assets as the appropriate measure given the
parent company is primarily a holding company
for the group, which is a change from 2022 as
the entity has moved to a net liability position
in 2023.
Despite the under-performance of the group
during 2022, we continued to use a profit-based
benchmark that year given this was expected to
be isolated at the time.
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected
and undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements
Parent company financial statements
60% (2022: 60%) of group materiality
70% (2022: 70%) of parent company materiality
We determined performance materiality for the group based on our assessment of the group’s and
parent company’s overall control environment in the light of the number of control deficiencies and
misstatements identified during previous audits.
Given the nature of the parent Company’s operations as a holding company and the control
environment being less complex, we considered that performance materiality of 70% was appropriate.
Performance
materiality
Basis and
rationale for
determining
performance
materiality
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6.3. Error reporting threshold
We agreed with the Audit and Risk Committee that we
would report to the Committee all audit differences in
excess of £20,000 (2022: £25,000), as well as differences
below that threshold that, in our view, warranted reporting
on qualitative grounds. We also report to the Audit and Risk
Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
All work was carried out by the group engagement team
for both the group and component audits.
At the group level, we also tested the consolidation process
and carried out analytical procedures to re-confirm our
conclusion that there were no significant risks of material
misstatement of the aggregated financial information of the
remaining components not subject to full scope audit.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our group audit was scoped by obtaining an understanding
of the group and its environment, including group-wide
controls, and assessing the risks of material misstatement at
a group level.
Based on that assessment we focussed our group audit
scope on the audit work at four components, which were
subject to a full scope audit. This included the parent
company, and the four principal UK based trading
businesses; RM Consortium, TTS, and RM Education
(comprising both RM Technology and RM Assessment).
Additionally, an audit of specified balances was performed
for both the SoNET and RMESI components during 2023 to
be satisfied we had sufficient appropriate audit evidence
over these account balances. The procedures performed
included an audit of revenue in SoNET and payroll in RMESI.
Taken with the entities in full scope, this accounts for 99%
(2022: 98%) of the group’s revenues and 98% (2022: 92%)
of total assets. We have obtained coverage of 99% (2022:
93%) of the absolute total of the profit and losses before tax
made by the group’s individual business units.
Our audit work at these components was executed
at levels of materiality applicable to each individual
component, which were lower than group materiality
ranging from £120,000 to £168,000 (2022: £150,000
to £210,000).
We have disaggregated RM Resources into two separately
identifiable components in FY23. We identify components
at a reporting level and have assessed RM Consortium and
TTS to be separate components as well as RM Education,
in FY22 we identified two components RM Resources and
RM Education. This change is aligned with the entity’s
assessment, which is further explained in 5.2, above.
2%
1%
Revenue
97%
1%
6%
Absolute
total of
profit and
loss before
tax
93%
2% 2%
Total assets
Full audit scope
Audit of specified balances
Review at group level
Full audit scope
Audit of specified balances
Review at group level
96%
Full audit scope
Audit of specified balances
Review at group level
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7.2. Our consideration of the control environment
We identified the main finance systems as the key IT systems
relevant to our audit. The Microsoft Dynamics 365 system
implemented during the prior year as part of the group’s IT
transformation programme ceased to operate as part of the
closure of RM Consortium in December 2023. We obtained
appropriate information to complete our audit before the
system was decommissioned. We worked with our IT audit
specialists to evaluate the group’s IT systems and determine
whether they could be relied upon to support our audit,
however a number of IT control deficiencies were identified.
For all components we obtained an understanding of the
relevant controls associated with the financial reporting
process and in relation to significant accounting estimates.
As a result of our historical findings, the entity has begun to
implement a control remediation plan. As a number of
controls were only implemented close to the balance sheet
date, we were unable to adopt a controls reliance audit
approach, and this is consistent with the prior year audit. We
have extended the scope of our substantive audit
procedures in response to the identified deficiencies aligned
with previous years.
potential to impact the group’s current operations, they
have assessed that there is no material impact arising from
climate change on the judgements and estimates made in
the financial statements as at 30 November 2023. We have
performed our own qualitative risk assessment of the
potential impact of the climate change on the group’s
account balances and classes of transaction and did not
identify any reasonably possible risks of material
misstatement on specific account balances. Our
procedures included reading disclosures included in the
Strategic Report and Sustainability Report to consider
whether they are materially consistent with the financial
statements and our knowledge obtained in the audit. We
additionally consulted an internal specialist to review the
Task Force on Climate-related Financial disclosures
contained within the annual report on pages 48.
8. Other information
The other information comprises the information included
in the annual report, other than the financial statements
and our auditor’s report thereon. The Directors are
responsible for the other information contained within the
annual report.
As described by in the Audit and Risk Committee Report on
page 93, while there has been progress related to
remediation activities in 2023, there continues to be a lack of
formality and documentation in the group’s control
environment, and in some areas, redesign is still required.
The Directors are continuing to implement a control
remediation plan and consistent with prior periods we
recommend that a Risks and Control Matrix is established
which enables top-down identification of key risks to enable
faster remediation of controls over material risks.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is
materially inconsistent with the financial statements, or our
knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential
impacts of climate change on the group’s business and its
financial statements. The group has assessed the risk and
opportunities relevant to climate change across the group
on page 44.
As a part of our audit procedures, we have held discussions
with the Directors to understand the process of identifying
climate-related risks, the determination of mitigating
actions and the impact on the group’s financial statements.
While the Directors have acknowledged that the transition
and physical risks posed by climate change have the
136136
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
RM plc Annual report and financial statements 2023 Financial statements Independent auditor's report continued
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the group’s and the parent
company’s ability to continue as a going concern,
disclosing as applicable, matters related to going concern
and using the going concern basis of accounting unless the
Directors either intend to liquidate the group or the parent
company or to cease operations, or have no realistic
alternative but to do so.
10. Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not
a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
11. Extent to which the audit was considered
capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks
related to irregularities
• • the nature of the industry and sector, control
environment and business performance including the
design of the group’s remuneration policies, key drivers
for Directors’ remuneration, bonus levels and
performance targets.
• • results of our enquiries of management, internal audit,
the Directors and the Audit and Risk Committee about
their own identification and assessment of the risks of
irregularities including those that are specific to the
group’s sector.
• • any matters we identified having obtained and reviewed
the group’s documentation of their policies and
procedures relating to:
– identifying, evaluating and complying with laws and
regulations and whether they were aware of any
instances of non-compliance.
– detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud.
– the internal controls established to mitigate risks of
fraud or non-compliance with laws and regulations.
• • the matters discussed among the audit engagement
team and relevant internal specialists, including tax,
valuations, pensions, IT, restructuring and forensic
specialists regarding how and where fraud might occur
in the financial statements and any potential indicators of
fraud.
As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential
for fraud in the following areas:
• • going concern.
• • allocation of Consortium goodwill within the
RM Resources division .
• • classification of adjusted items.
• • management estimates of variable consideration
in revenue recognition for certain long-term contracts
in the RM Assessment business; and
• • impairment risks associated with the valuation
of goodwill in the TTS CGU.
In common with all audits under ISAs (UK), we are also
required to perform specific procedures to respond to
the risk of management override.
137137
RM plc Annual report and financial statements 2023 Financial statements Independent auditor's report continued
• with respect to revenue recognition from long term
contracts in the RM Assessment business, we have
challenged key estimates made by the entity in
determining the total transaction price in respect of
exam volumes, including evaluating the latest
correspondence with customers and assessing the
available confirmatory and contradictory external market
evidence in relation to volumes.
• in addressing the risk of fraud through management
override of controls, testing the appropriateness of
journal entries and other adjustments; assessing whether
the judgements made in making accounting estimates
are indicative of a potential bias; and evaluating the
business rationale of any significant transactions that are
unusual or outside the normal course of business.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members, including internal specialists, and remained
alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Report on other legal and regulatory
requirements
12. Opinions on other matters prescribed by
the Companies Act 2006
In our opinion the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the
course of the audit:
• the information given in the strategic report and the
Directors’ report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
• the strategic report and the Directors’ report have
been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the
group and the parent company and their environment
obtained in the course of the audit, we have not
identified any material misstatements in the strategic
report or the Directors’ report.
We also obtained an understanding of the legal and
regulatory frameworks that the group operates in, focusing
on provisions of those laws and regulations that had a
direct effect on the determination of material amounts and
disclosures in the financial statements. The key laws and
regulations we considered in this context included the UK
Companies Act, Listing Rules, pensions legislation and tax
legislation in relevant jurisdictions.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be
fundamental to the group’s ability to operate or to avoid a
material penalty.
11.2. Audit response to risks identified.
As a result of performing the above, we identified the
following key audit matters related to the potential risk
of fraud:
• going concern;
• allocation of Consortium goodwill within the RM
Resources division; and
• impairment risks associated with the valuation of
goodwill in the TTS CGU.
The key audit matters section of our report explains the
matters in more detail and also describes the specific
procedures we performed in response to those key audit
matters.
In addition to the above, our procedures to respond to risks
identified included the following:
• reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the financial statements.
• enquiring of management, the Audit and Risk Committee
and internal legal counsel concerning actual and
potential litigation and claims.
• performing analytical procedures to identify any unusual
or unexpected relationships that may indicate risks of
material misstatement due to fraud.
• reading minutes of meetings of those charged with
governance, reviewing internal audit reports and
reviewing correspondence with HMRC.
• in addressing the risk of bias in the classification of
adjusted items, we have challenged whether items
presented as adjustments are classified in line with the
accounting policy, whether disclosures comply with the
FRC regulatory guidance, whether treatment of items of
income and expense are appropriate and whether
adjustments are adopted consistently between years.
138138
RM plc Annual report and financial statements 2023 Financial statements Independent auditor's report continued
Report on other legal and regulatory requirements
13. Corporate Governance Statement
The Listing Rules require us to review the Directors' statement
in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the
group’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report
if in our opinion certain disclosures of Directors’ remuneration
have not been made or the part of the Directors’
remuneration report to be audited is not in agreement with
the accounting records and returns.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of
the Corporate Governance Statement is materially
consistent with the financial statements and our
knowledge obtained during the audit:
• the Directors’ statement with regards to the
appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified,
set out on page 32.
• the Directors’ explanation as to its assessment of the
group’s prospects, the period this assessment covers
and why the period is appropriate, set out on page 34.
• the Directors' statement on fair, balanced and
understandable, set out on page 124.
• the board’s confirmation that it has carried out a
robust assessment of the emerging and principal risks,
set out on page 37.
• the section of the annual report that describes the
review of effectiveness of risk management and
internal control systems, set out on page 93; and
• the section describing the work of the Audit and Risk
Committee, set out on page 88.
14. Matters on which we are required to
report by exception
14.1. Adequacy of explanations received and accounting
records
Under the Companies Act 2006 we are required to report
to you if, in our opinion:
• we have not received all the information and
explanations we require for our audit; or
• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements are not in
agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
We have nothing to report in respect of these matters.
15. Other matters which we are required to
address
15.1. Auditor tenure
Following the recommendation of the Audit and Risk
Committee, we were appointed by the board on 8 April 2021 to
audit the financial statements for the year ending 30 November
2021 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and
reappointments of the firm is three years, covering the years
ending 30 November 2021 to 30 November 2023.
15.2. Consistency of the audit report with the additional
report to the Audit and Risk committee
Our audit opinion is consistent with the additional report to
the Audit and Risk Committee we are required to provide in
accordance with ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we
might state to the company’s members those matters we
are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body,
for our audit work, for this report, or for the opinions we
have formed.
As required by the Financial Conduct Authority (FCA)
Disclosure Guidance and Transparency Rule (DTR) 4.1.14R
– DTR 4.1.18R, these financial statements form part of the
Electronic Format Annual Financial Report filed on the
National Storage Mechanism of the UK FCA in accordance
with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report
provides no assurance over whether the annual financial
report has been prepared using the single electronic format
specified in the ESEF RTS.
Kate Hadley (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
14 March 2024
139139
RM plc Annual report and financial statements 2023 Financial statements
Consolidated income statement
Year ended 30 November 2023
Adjustments
Adjusted
£000
£000
Total
£000
Note
Year ended 30 November 2022
(Restated1)
Adjustments
£000
Adjusted
£000
Total
£000
Continuing operations
Revenue
Cost of sales
Gross profit
3
195,186
(129,103)
66,083
-
-
-
195,186
214,167
(129,103)
(145,663)
66,083
68,504
-
-
-
214,167
(145,663)
68,504
Operating expenses
(66,612)
(7,905)
(74,517)
(60,171)
(26,833)
(87,004)
Expected credit loss credit/
20
840
-
840
(850)
-
(850)
(charge)
Impairment losses
Profit/(loss) from operations
Finance income
Other income
Finance costs
(Loss)/profit before tax
Tax
(Loss)/profit for the year from
continuing operations
Discontinued operations
(Loss)/profit for the year
Earnings per ordinary share on
continuing operation
– basic
– diluted
Earnings per ordinary share on
discontinuing operations
– basic
– diluted
Earnings per ordinary share on
total operations
– basic
– diluted
Paid and proposed
dividends per share
– Interim
– Final
6
8
6
9
10
21
11
11
11
12
-
(38,949)
(38,949)
-
(2,236)
(2,236)
311
(46,854)
(46,543)
7,483
(29,069)
(21,586)
1,105
-
-
10,785
1,105
10,785
(6,585)
-
(36,069)
(41,238)
6,002
(2,070)
(6,585)
(5,169)
(8,072)
(13,241)
(30,067)
(43,308)
760
13,444
14,204
(12,481)
(16,623)
(29,104)
614
-
(2,825)
5,272
(1,760)
3,512
1,590
5,102
-
3,010
-
614
3,010
(2,825)
(26,059)
(20,787)
6,458
4,698
(19,601)
(16,089)
-
1,590
(19,601)
(14,499)
(15.9)p
(15.8)p
0.9p
0.9p
(15.0)p
(14.9)p
4.2p
4.2p
1.9p
1.9p
6.1p
6.0p
(52.0)p
(51.8)p
17.1p
17.0p
(34.9)p
(34.8)p
-
-
(19.3)p
(19.3)p
1.9p
1.9p
(17.4)p
(17.4)p
-
-
1. The prior year restatement is detailed in Note 33.
Throughout this statement, adjusted profit and EPS measures are stated after adjusting items which are identified by virtue
of their size, nature and/or incidence. The treatment of adjusted items is applied consistently period on period and are used
by the Board to monitor and manage the performance of the Group (see Note 6 for details).
The notes on pages 149 to 215 form an integral part of these Financial Statements.
140140
RM plc Annual report and financial statements 2023 Financial statements
Consolidated statement of
comprehensive income
Loss for the year
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
Note
(29,104)
(14,499)
Items that will not be reclassified subsequently to profit or loss
Defined benefit pension scheme remeasurements1
Tax on items that will not be reclassified subsequently to profit or loss
Items that are or may be reclassified subsequently to profit or loss
26
10
Fair value (loss)/gain on hedged instruments
Fair value gain/(loss) on hedged instruments transferred to the income
statement
Tax on items that are or may be reclassified subsequently to profit or loss2
10
Exchange (loss)/gain on translation of overseas operations
Other comprehensive expense
Total comprehensive expense attributable to owners of the parent
(15,771)
2,790
(402)
272
-
(287)
(13,398)
(42,502)
(12,157)
2,914
4
(444)
11
301
(9,371)
(23,870)
1. Year ended 30 November 2023 includes £15,771,000 expense (2022: £12,846,000 expense) in respect of defined benefit pension schemes (see
note 26(c)) and £nil (2022: £689,000 gain) in respect of Local Government Pension Schemes (see Note 26(b)).
2. Principally includes the impact of the Group’s cash flow hedges deferred to other comprehensive income during the year. No deferred tax
asset has been recognised in the year ended 30 November 2023 for the future expected charge to the profit and loss account.
The notes on pages 149 to 215 form an integral part of these Financial Statements.
141141
RM plc Annual report and financial statements 2023
Financial statements
Consolidated balance sheet
Note
At 30 November 2023
£’000
At 30 November 2022
£’000
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use asset
Defined benefit pension scheme surplus
Other receivables
Contract fulfilment assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Contract fulfilment assets
Assets held for sale
Tax assets
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Liabilities directly associated with assets classified as held for sale
Net current assets/(liabilities)
Non-current liabilities
Lease liabilities
Other payables
Provisions
Deferred tax liability
Defined benefit pension scheme obligation
Borrowings
Total liabilities
Net assets
Equity attributable to shareholders
Share capital
Share premium account
Own shares
Capital redemption reserve
Hedging reserve
Translation reserve
Retained earnings
Total equity
13
14
15
16
26
20
19
10
18
20
19
21
22
24
23
21
22
22
24
10
26
23
25
27
38,538
5,224
8,271
14,275
12,796
240
1,959
170
81,473
13,959
32,333
1,949
-
1,988
8,062
58,291
139,764
(46,372)
(2,993)
-
-
(49,365)
8,926
(14,297)
(2,463)
(1,749)
-
(411)
(53,651)
(72,571)
(121,936)
17,828
1,917
27,080
(444)
94
(393)
(868)
(9,558)
17,828
49,401
25,510
15,892
16,364
23,959
290
1,713
174
133,303
26,359
36,203
1,727
418
2,733
1,911
69,351
202,654
(65,639)
(2,142)
(48,728)
(2,082)
(118,591)
(49,240)
(15,998)
(3,096)
(666)
(2,306)
(1,354)
-
(23,420)
(142,011)
60,643
1,917
27,080
(444)
94
(263)
(581)
32,840
60,643
The notes on pages 149 to 215 form an integral part of these Financial Statements. These Financial Statements of RM plc,
registered number 01749877, were approved and authorised for issue by the Board of Directors on 14 March 2024.
On behalf of the Board of Directors
Simon Goodwin
Director
142142
RM plc Annual report and financial statements 2023 Financial statements
Consolidated statement of
changes in equity
Note
Share
capital
£000
Share
premium
£000
1,917
27,080
Own
shares
£000
(444)
Capital
redemption
reserve1
£000
94
At 1 December 2021
Loss for the year
Other comprehensive
(expense)/income
Total comprehensive
(expense)/income
Transactions with owners of the Company:
Share-based payment fair
value charges
Ordinary dividends paid
At 30 November 2022
28
12
Loss for the year
Other comprehensive
expense
Total comprehensive
expense
Transactions with owners of the Company:
Share-based payment fair
28
value charges
Share-based payment - tax
-
-
-
-
-
-
-
-
-
Hedging
reserve2
£000
Translation
reserve3
£000
Retained
earnings
£000
Total
£000
177
-
(440)
(882)
59,029 86,971
-
(14,499)
(14,499)
301
(9,232)
(9,371)
(440)
301
(23,731)
(23,870)
-
-
40
40
-
(263)
-
-
(581)
(2,498)
(2,498)
32,840 60,643
-
(29,104) (29,104)
(130)
(287)
(12,981) (13,398)
(130)
(287)
(42,085) (42,502)
-
-
-
-
(364)
(364)
11
11
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,917
-
27,080
-
(444)
-
94
Unclaimed dividends
At 30 November 2023
-
1,917
-
27,080
-
(444)
-
94
-
(393)
-
(868)
40
40
(9,558) 17,828
1. The capital redemption reserve arose from the repurchase of issued share capital. It is not distributable.
2. The Group hedging reserve arises from cash flow hedges entered into by the Group. The reserve is distributable in the entities in which it arises
unless it relates to unrealised gains.
3. The Group translation arises on consolidation from the unrealised movement of foreign exchange on the net assets of overseas entities. This
reserve is not distributable.
The notes on pages 149 to 215 form an integral part of these Financial Statements.
143143
RM plc Annual report and financial statements 2023 Financial statements
Consolidated cash flow statement
At 30 November 2023
£’000
At 30 November 2022
£’000
Note
21
6
6
6
8
9
13, 14
15, 16
6
5
28
24
26
24
26
8
6
21
15
14
12
23
23
9
Loss before tax from continuing operations
Profit before tax from discontinuing operations
Gain on disposal of intangible licences
Gain on disposal of property
Gain on disposal of operations
Finance income
Finance costs
Loss from operations, including discontinued operations
Adjustments for:
Amortisation and impairment of intangible assets
Depreciation and impairment of property, plant and equipment
Impairment of inventory and other current assets
Utilisation of contract fulfilment asset
( Gain)/loss on disposal of property, plant and equipment
Loss/(gain) on foreign exchange
Share-based payment (credit)/charge
Increase in provisions
Defined benefit pension scheme administration cost
Operating cash flows before movements in working capital
Decrease/(increase) in inventories
Decrease/(increase) in receivables
Increase in contract fulfilment assets
(Decrease)/increase in trade and other payables
Utilisation of provisions
Cash used by operations
Cash from settlement of derivative instruments
Defined benefit pension scheme cash contributions
Tax (paid)/credit
Net cash used by operating activities
Investing activities
Interest received
Proceeds on disposal of intangible licences
Proceeds on disposal of property, plant and equipment
Proceeds on sale of operations
Purchases of property, plant and equipment
Purchases of other intangible assets
Net cash generated from investing activities
Financing activities
Dividends unclaimed/(paid)
Drawdown of borrowings
Repayment of borrowings
Borrowing facilities arrangement and commitment fees
Interest paid
Payment of leasing liabilities – capital element
Payment of leasing liabilities – interest element
Net cash (used by)/generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the year
Bank overdraft
Cash at bank
Cash and cash equivalents at the end of the year
The notes on pages 149 to 215 form an integral part of these Financial Statements.
144144
(41,238)
14,204
(10,614)
-
(13,615)
(1,105)
6,585
(45,783)
31,050
11,564
4,476
2,513
(265)
570
(364)
3,825
6
7,592
8,624
2,804
(3,035)
(17,844)
(2,824)
(4,683)
(879)
(4,496)
(397)
(10,455)
9
10,745
300
10,899
(642)
(457)
20,854
40
30,167
(24,167)
(1,716)
(4,955)
(3,179)
(331)
(4,141)
6,258
1,911
(107)
8,062
-
8,062
8,062
(20,787)
1,590
(2,791)
(221)
-
(612)
2,825
(19,996)
4,354
5,149
-
2,326
41
(648)
40
1,469
8
(7,257)
(7,304)
(4,095)
(2,920)
5,517
(1,514)
(17,573)
444
(4,537)
880
(20,786)
3
2,791
3,299
-
(1,575)
(3,627)
891
(2,498)
73,000
(44,000)
(436)
(2,312)
(3,114)
(347)
20,293
398
1,478
35
1,911
-
1,911
1,911
RM plc Annual report and financial statements 2023 Financial statements
Company balance sheet
Non-current assets
Investments
Other receivables
Deferred tax asset
Current assets
Trade and other receivables
Total assets
Current liabilities
Trade and other payables
Borrowings
Net current liabilities
Non-current liabilities
Borrowings
Net (liabilities)/assets
Equity attributable to equity holders
Share capital
Share premium account
Own shares
Capital redemption reserve
Retained earnings
Total equity
At 30 November 2023
£’000
At 30 November 2022
£’000
Note
17
20
10
20
22
23
23
25
27
57,952
-
-
57,952
267
267
58,219
(31,127)
-
(31,127)
(30,860)
(53,651)
(53,651)
(26,559)
1,917
27,080
(444)
94
(55,206)
(26,559)
126,470
7,858
1,576
135,904
115
115
136,019
(27,390)
(48,728)
(76,118)
(76,003)
-
-
59,901
1,917
27,080
(444)
94
31,254
59,901
The notes on pages 149 to 215 form an integral part of these Financial Statements.
The Company has taken the exemption under s408 of the Companies Act 2006, not to produce an Income Statement.
During the year the loss for the year was £86,136,000 (2022: £2,502,000 loss) and includes an impairment charge of
£68,153,000 in respect of the Company’s investment in RM Educational Resources Limited (see Note 17) and an
impairment charge of £7,810,000 in respect of an amount owed by a Group undertaking of £7,810,000 (see Note 20).
These Financial Statements of RM plc, registered number 01749877, were approved and authorised for issue by the Board
of Directors on 14 March 2024.
On behalf of the Board of Directors
Simon Goodwin
Director
145145
RM plc Annual report and financial statements 2023 Financial statements
Company statement of changes in equity
At 1 December 2021
Loss for the year
Total comprehensive expense
Transactions with owners of the Company
Share-based payment fair value charges
Ordinary dividends paid
At 30 November 2022
Note
28
12
Loss for the year
Total comprehensive expense
Transactions with owners of the Company
Share-based payment fair value charges
28
Share
capital
£000
1,917
Share
premium
£000
27,080
Capital
redemption
reserve1
£000
Retained
earnings
£000
Own shares
£000
Total
£000
(444)
94
36,214
64,861
-
-
-
-
-
-
-
-
-
-
1,917
-
27,080
-
(444)
-
-
-
-
-
-
-
-
-
-
-
-
-
94
-
-
-
(2,502)
(2,502)
(2,502)
(2,502)
40
(2,498)
31,254
40
(2,498)
59,901
(86,136)
(86,136)
(86,136)
(86,136)
(364)
(364)
Unclaimed dividends
At 30 November 2023
-
1,917
-
27,080
-
(444)
-
94
40
(55,206)
40
(26,559)
1. The capital redemption reserve arose from the repurchase of issued share capital. It is not distributable.
The notes on pages 149 to 215 form an integral part of these Financial Statements.
146146
RM plc Annual report and financial statements 2023
Financial statements
Notes to the financial statements
1. General information
RM plc (the Company) is a public company, limited by
shares, incorporated in England and Wales and listed on the
London Stock Exchange. It is the parent Company and
ultimate parent of a group of companies (the Group) whose
business activities and financial position, together with the
factors likely to affect its future development, performance
and position, and risk management policies are presented
in the Strategic Report and the Directors’ Report. The
registered address is: 142B Park Drive, Milton Park,
Abingdon, Oxfordshire OX14 4SE.
Financial Statements and the reported amounts of revenues
and expenses during the reporting period. Although these
estimates are based on the Directors’ best knowledge of
current events and actions, actual results ultimately may
differ from those estimates.
The separate financial statements of the Company are
drawn up in accordance with the Companies Act 2006 and
Financial Reporting Standard 101 ‘Reduced disclosure
framework’, (FRS 101). The following exemptions available
under FRS 101 have been applied:
Consolidated Income Statement presentation
The Directors assess the performance of the Group using
an adjusted operating profit and profit before tax. The
policy for the use of Alternative Performance Measures is
explained in Note 2 with further details provided in Note 6.
2. Significant accounting policies
The accounting policies are drawn up in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006.
These accounting policies have been consistently applied
to the years presented.
The Financial Statements are prepared on a going concern
basis. The Directors’ reasons for continuing to adopt this
basis are set out in the Going Concern section of the
Strategic Report and below.
Basis of preparation
The Financial Statements have been prepared in
accordance with international accounting standards in
conformity with the requirements of the Companies Act
2006. They are prepared on a historical cost basis except
for certain financial instruments, share-based payments and
pension assets and liabilities which are measured at fair
value. In addition, assets held for sale are stated at the
lower of previous carrying amount and the fair value less
costs to sell. The preparation of Financial Statements, in
conformity with generally accepted accounting principles,
requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the
•• A cash flow statement and related notes;
•• Comparative period reconciliations for share capital and
tangible fixed assets;
•• Disclosures in respect of transactions with wholly-owned
subsidiaries;
•• Disclosures in respect of capital management;
•• The effects of new but not yet effective IFRSs; and
•• Disclosures in respect of the compensation of Key
Management Personnel.
The Company produces consolidated Financial Statements
which are prepared in accordance with International Financial
Reporting Standards. As the consolidated Financial Statements
of the Company include the equivalent disclosures, the
Company has also taken the exemptions under FRS 101
available in respect of the following disclosures:
•• IFRS 2 Share-Based Payments in respect of Group settled
share-based payments; and
•• The requirements in IAS 24 ‘Related party disclosures’ to
disclose related party transactions entered into between
two or more members of a group.
•• The disclosures required by IFRS 7 and IFRS 13 regarding
financial instrument disclosures have not been provided.
As permitted by s408 of the Companies Act 2006 the
Company has elected not to present its own profit and loss
account or Statement of Comprehensive Income for the
year. The profit attributable to the Company is disclosed in
the footnote to the Company’s balance sheet.
147147
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
New accounting standards in issue but not yet effective
At the date of authorisation of these Financial Statements,
the Group has not applied the following new and revised
International Financial Reporting Standards that have been
issued but are not yet effective:
• • IFRS 17 Insurance Contracts
• • Amendments to IAS 1: Classification of Liabilities as
Current or Non-Current
• • Amendments to IAS 1: Non-current Liabilities with
Covenants
• • Amendments to IAS 7 and IFRS 7: Supplier Finance
Arrangements
• • Amendments to IAS 8: Definition of Accounting
Estimates
• • Amendments to IAS 12: Deferred Tax Related to Assets
and Liabilities arising from a Single Transaction
• • Amendments to IFRS 16: Lease Liability in a Sale and
Leaseback
• • Amendments to IFRS 10 and IAS 28: Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture
The application of these new standards and amendments is
not expected to have a material impact on the Group.
Going concern
The Financial Statements have been prepared on a going
concern basis which the Directors consider to be
appropriate for the following reasons.
The Directors have prepared cash flow forecasts for the
period to the end of March 2025 which indicate that taking
into account reasonably plausible downsides as discussed
below, the Company is expected to comply with all debt
covenants in place and will have sufficient funds to meet its
liabilities as they fall due for at least 12 months from the
date of this report.
In assessing the going concern position the Directors have
considered the balance sheet position as included on page
142, the headroom to the hard liquidity covenant within the
Banking Agreement, and compliance with the LTM EBITDA
covenant. Exceeding the hard liquidity or the LTM EBITDA
covenant would constitute a material breach of the
agreement and consequently the facility would be
repayable on demand.
148148
At 30 November 2023, the Group had adjusted net debt
of £45.6m (2022: £46.8m) and drawn facilities of £55.0m
(2022: £49.0m). Average adjusted net debt over the year to
30 November 2023 was £55.9m (2022: £46.8m) with a
maximum borrowings position of £64.8m (2022: £64.1m).
The drawn facilities are expected to fluctuate over the period
considered for going concern, but remain within the covenants,
and are not anticipated to be fully repaid in this period.
As set out in Note 31, RM Group had a £70.0m (2022: £70.0m)
committed bank facility (the facility) at 30 November 2023.
At the date of this report, the Group has secured an agreement
with Lenders, which extends the existing £70.0m facility to
July 2026. This agreement is secured against the shares of
each of the obligor companies (except for RM plc) and by way
of a fixed and floating charge over all assets of the obligors,
and has reset the covenants under the facility. For going
concern purposes the Board have assessed performance
against the following covenants:
• • A quarterly LTM EBITDA (excluding discontinued operations)
covenant test from February 2024 to November 2025,
which is then replaced by a quarterly EBITDA leverage
test and interest cover, which are required to be below
and above 4x respectively from February 2026; and
• • A ‘hard’ liquidity covenant test requiring the Group to
have liquidity greater than £7.5m on the last business day
of the month, and liquidity not be below £7.5m at the
end of two consecutive weeks within a month, with a
step-down period applying from 15 September 2024 to
24 October 2024 and 1 January 2025 to 21 March 2025,
during which the minimum liquidity requirement is
reduced from £7.5m to £5.0m.
The Chief Financial Officer’s statement outlines the
performance of the Group in the year to 30 November 2023.
This statement highlights the material impact of the ongoing
issues within the Consortium brand and under performance
relative to prior year forecasts in both the RM Technology
and TTS businesses.
For going concern purposes, the Group has assessed a
base case scenario that assumes no significant downturn in
UK or International markets from that experienced in the
year to 30 November 2023 and assumes a broadly similar
macroeconomic environment to that currently being
experienced.
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Going concern (continued)
Revenue growth in the base case is driven from the
following key areas:
In the Technology division: aligning forecast hardware sales
with the average of the last five years, rather than the future
growth assumed in the base case, and reducing contract
renewal rates by 5%.
•• Growth from existing customers and new customer wins
In the Resources division:
in the Assessment division;
•• Increased hardware and infrastructure revenues in the
Technology division, including further wins under the UK
government’s Connect the Classroom programme; and
•• Growth from UK sales and international partnerships,
where the base case assumes an increase in market
share through customer wins and new product launches
as well as higher average order values, in the Resources
business.
Operating profit margin growth in the base case includes,
in addition to the revenue assumptions outlined above,
annualised savings benefit from restructuring programmes
commenced in the year to 30 November 2023. As the target
operating model changes did not commence until 2024
the impacts of these changes are not captured in the base
case, rather these are incorporated as an upside in the
reasonable worst-case scenario.
Net debt is not expected to reduce within the assessment
period, as the conversion of profits will be offset by further
capital investment, interest and pension payments.
As part of the Group’s business planning process, the Board
has closely monitored the Group’s financial forecasts, key
uncertainties, and sensitivities. As part of this exercise, the
Board has reviewed a number of scenarios, including the
base case and reasonable worst case downside scenarios.
The aggregate impact of reasonably plausible downsides
has been taken together to form a reasonable worst-case
scenario that removes a number of the growth assumptions
from the base case including:
In the Assessment division, a reduction in revenue arising
because of:
•• A faster runoff of one key contract which has not been
renewed;
•• New contract win not at preferred bidder status reduced
by 50%; and
•• One-off revenues associated with changing terms on
a large multi-year contract delayed to FY25.
•• UK market share growth does not occur, market continues
to decline and revenues delivered by new products are
reduced by 50%;
•• No growth in international revenues; and
•• Increases in costs associated with new product development,
carriage, and an inability to pass on 1.5% of
inflationary increases.
The reasonable worst downside case scenarios have the
following impact on the base case budget:
•• 2024: A revenue reduction of £31.2m, an EBITDA
reduction of £8.2m, and cash reduction of £7.5m.
•• 2025: A revenue reduction of £41.5m, an EBITDA
reduction of £8.4m, and cash reduction of £6.0m.
While the Board believes that all reasonable worst case
downside scenarios occurring together is highly unlikely, the
Group would continue to comply with covenants under the
facility, albeit in February 2025 rather would no headroom on
the LTM EBITDA covenant, and in December 2024 limited
headroom on the hard liquidity covenant. The Board’s
assessment of the likelihood of a further downside scenario
is remote. Management have undertaken reverse stress
testing that demonstrates that even if no sales are made by
the TTS business in the month of May 2024, the covenants
would still be complied with for that quarter.
The Board has also considered a number of mitigating actions
which could be enacted, if necessary, to ensure that reasonable
headroom against the facility is maintained in reasonable worst
cases and the Group complies with covenants. These mitigating
actions include not paying discretionary bonuses, the sale
of further IP licences, and extending payment terms with
key suppliers, albeit at a much lower level for the latter than
were taken in FY23. These are actions that the Group has
taken before and therefore the Board are confident of their
ability to deliver these mitigating actions if required. Further
actions could include reduction in capital expenditure and
delaying recruitment. These actions are expected to have
little to no implications to the ongoing business in the
going concern period.
149149
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Therefore, the Board has a reasonable expectation that the
Company has adequate resources to continue in operational
existence and meet its liabilities as they fall due for a period
of not less than 12 months from the date of approval of these
Financial Statements, having considered both the availability
of financial facilities and the forecast liquidity and expected
future covenant compliance. For this reason, the Company
continues to adopt the going concern basis of accounting
in preparing the annual Financial Statements.
Alternative Performance Measures (APMs)
In response to the Guidelines on APMs issued by the European
Securities and Markets Authority (ESMA) and the Financial
Reporting Council (FRC), additional information on the APMs
used by the Group is provided below. The following APMs
are used by the Group:
•• Adjusted profit from operations
•• Adjusted operating margin
•• Adjusted profit before tax
•• Adjusted tax
•• Adjusted profit after tax
•• Adjusted earnings per share
•• Adjusted diluted earnings per share
•• Adjusted cash conversion
•• EBITDA
•• Adjusted net debt
•• Average adjusted net debt
Further explanation of what each APM comprises and
reconciliations between Statutory reported measures
and adjusted measures are shown in Note 6.
The Board believes that presentation of the Group results
in this way is relevant to an understanding of the Group’s
financial performance (and that of each segment). Adjusted
items are identified by virtue of their size, nature and/or
incidence. The treatment of adjusted items is applied
consistently period on period. This presentation is
consistent with the way that financial performance is
measured by management, reported to the Board, the basis
of financial measures for senior management’s compensation
schemes and provides supplementary information that
assists the user to understand the financial performance,
position and trends of the Group.
The APMs used by the Group are not defined terms under
IFRS and may therefore not be comparable with similarly
titled measures reported by other companies. They are not
intended to be a substitute for, or superior to, GAAP measures.
All APMs relate to the current year results and comparative
periods where provided.
Consolidation
The Group Financial Statements incorporate the Financial
Statements of the Company and all its subsidiaries for the
periods during which they were members of the Group.
Inter-company balances and transactions between Group
companies are eliminated on consolidation. On acquisition,
assets and liabilities of subsidiaries are measured at their fair
values at the date of acquisition with any excess of the cost
of acquisition over this value being capitalised as goodwill.
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. In
assessing control, the Group takes into consideration potential
voting rights. The acquisition date is the date on which control
is transferred to the acquirer. The Financial Statements of
subsidiaries are included in the consolidated Financial Statements
from the date that control commences until the date that
control ceases.
Investment in subsidiaries
In the Company accounts, investments in subsidiaries are
stated at cost less any provision for impairment where
appropriate.
Business combinations
For acquisitions on or after 1 January 2010, the Group
measures goodwill at the acquisition date as:
•• the fair value of the consideration transferred; less
•• the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed
as incurred.
150150
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
For acquisitions before 1 January 2010, goodwill represents
the excess of the cost of the acquisition over the Group’s
interest in the recognised amount (generally fair value) of
the identifiable assets, liabilities and contingent liabilities of the
acquiree. When the excess was negative, a bargain purchase
gain was recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of
debt or equity securities, that the Group incurred in connection
with business combinations were capitalised as part of the
cost of the acquisition period.
Revenue
The Group operates a number of diverse businesses and
accordingly applies a variety of methods for revenue
recognition, based on the principles set out in IFRS15. The
revenue and profits recognised in any period are based on
the delivery of performance obligations and an assessment
of when control is transferred to the customer.
RM Resources provides educational supplies and curriculum
products for schools and nurseries and revenues are recognised
when products are delivered to customers i.e. point-in-time
basis for each product delivered.
RM Technology provides software, services and technology
to UK schools and colleges. Hardware, right-to-use licences
and related installation revenues are recognised on delivery
to customers at a point in time. Provision of services and
right-to-access software are recognised over time.
RM Assessment provides digital assessment solutions that
support lifelong learning. Revenues are recognised over-time
based on the delivery of performance obligations. In certain
contracts there are judgments in determining the basis of
revenue recognition particularly for long-term and
complex contracts.
RM Assessment revenue judgements:
In respect of certain contracts in the RM Assessment Division,
management is required to form several judgements and
assumptions. These include determining the amount of
revenue and profits to record, and related balance sheet
items (such as contract fulfilment assets, trade receivables,
accrued income and deferred income) to recognise in the
period. Judgements and assumptions include:
•• The identification of performance obligations included
within the contract;
•• The allocation of revenue to performance obligations
including the impact of variable consideration;
•• The combination of goods and services into a single
performance obligation;
•• The measurement of progress for performance
obligations satisfied over time; and
•• The consideration of onerous contract conditions and
associated loss provisions.
The impact on revenue recognition of these judgements
and assumptions is set out below.
The most significant judgements relate to contracts with
multiple performance obligations and where there is a
variable transaction price based on the number of exam
scripts. There is significant estimation uncertainty in some
contracts relating to the estimate of scanning and script
volumes over the contract. There is also judgement in the
determination that the provision of technology is a right-to-
access arrangement and therefore should be recognised
over time, and the basis on which the transaction price is
allocated to separate performance obligations. These are
explained in key sources of estimation uncertainty and key
sources of critical accounting judgements below.
Basis of revenue recognition
Revenue is recognised either when the performance obligation
in the contract has been performed (so 'point-in-time'
recognition or 'over time' as control of the performance
obligation is transferred to the customer). For all contracts,
the Group determines if the arrangement with a customer
creates enforceable rights and obligations.
For contracts with multiple components to be delivered,
management applies judgement to consider whether these
promised goods or services are; (i) distinct – to be accounted
for as separate performance obligations; (ii) not distinct – to
be combined with other promised goods or services until a
bundle is identified that is distinct; or (iii) part of a series of
goods and services that are substantially the same and have
the same pattern of transfer to the customer.
At contract inception the total transaction price is estimated,
being the amount to which the Group expects to be entitled
and has rights to under the present contract. This includes
an assessment of any variable consideration where the
performance obligation is satisfied over time.
151151
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Such amounts are only included based on the expected value
or the most likely outcome method, and only to the extent
it is highly probable that no revenue reversal will occur.
use output method based on estimation of number of
scripts, or level of service activity. There is variable
consideration relating to the number of scripts.
The transaction price does not include estimates of consideration
resulting from change orders for additional goods and services
until these are agreed.
Once the total transaction price is determined, the Group
allocates this to the identified performance obligations in
proportion to their relative standalone selling prices and
recognises revenue when those performance obligations
are satisfied. In the RM Assessment Division the Group may
sell customer bespoke solutions, and in these cases the
Group typically uses the expected cost-plus margin or a
contractually stated price approach (if set out by
performance obligation in the contract) to estimate the
stand-alone selling price of each performance obligation.
Any remaining performance obligations for which the
stand-alone selling price is highly variable or uncertain, due
to not having previously been sold on a stand-alone basis,
is allocated applying the residual approach.
For each performance obligation, the Group determines if
revenue will be recognised over time or at a point in time.
Where the Group recognises revenue over time for long-
term contracts, this is generally due to the Group performing
and the customer simultaneously receiving and consuming
the benefits provided over the life of the contract.
For each performance obligation to be recognised over
time, the Group applies a revenue recognition method that
faithfully depicts the Group’s performance in transferring
controls of the good or services to the customer. This
decision requires assessment of the real nature of the
goods or services that the Group has promised to transfer
to the customer. The Group applies the relevant input or
output method consistently to similar performance
obligations in other contracts.
When using the output method, the Group recognises
revenue on the basis of direct measurements of the value
to the customer of the goods and services transferred to
the date relative to the remaining goods and services under
the contract. Where the output method is used and where
the series guidance is applied (see below for further details),
the Group often uses a method of time elapsed which
requires minimal estimation. Certain long-term contracts
152152
There is judgment in determining whether a contract has
onerous conditions. When identified the expected loss is
provided for at the time identified.
Revenue: Transactional (point-in-time) contracts
The Group delivers goods and services in the RM Technology
and RM Resources that are transactional, for which revenue
is recognised at the point in time when the control of the
goods or services has transferred to the customer. This may
be at the point of physical delivery of goods and acceptance
by a customer, or when the customer obtains control of an
asset or service in a contract with customer-specified
acceptance criteria.
The nature of contracts or performance obligations
categorised within this revenue type includes: (i) provision
of curriculum and educational resources for schools and
nurseries; (ii) provision of IT hardware goods and (iii)
installation of IT hardware goods.
Revenue: Over-time contracts
The Group delivers services in RM Technology and RM
Assessment divisions under customer contracts with variable
duration. The nature of contracts and performance obligations
categorised within this revenue type is diverse and includes:
(i) outsourced service arrangements in the public and
private sectors; and (ii) right-to-access licences (see below).
The Group considers that the services provided meet the
definition of a series of distinct goods and services as they
are: (i) substantially the same; (ii) have the same pattern of
transfer (as the series constitutes services provided in
distinct time increments (e.g. daily, monthly, quarterly,
exam session, or annual service) and therefore treats the
series as one performance obligation.
Even if the underlying activities performed by the Group to
satisfy a promise vary significantly throughout the day and
on a day-by-day basis, that fact, by itself, does not mean the
distinct goods or services are not substantially the same.
For the majority of the over-time contracts with customers
in this category, the Group recognises revenues using the
output method as it best reflects the nature in which the Group
is transferring control of the goods or services to the customer.
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Right-to-access licences are those where the Group has a
continuing involvement after the sale or transfer of control
to the customer, which significantly affects the intellectual
property to which the customer has rights. The Group is
responsible for maintenance, continuing support, updates
and upgrades and accordingly the sale of the initial
software is not distinct. The Group’s accounting policy for
licences is discussed in more detail below.
Revenue: Licenses
Software licences delivered by the Group can be either
'right to access' or 'right to use' licences. Right-to-access
licences require continuous upgrade and updates for the
software to remain useful, all other licences are treated as
right-to-use licences. The assessment of whether a licence
is a right-to-access licence or a right-to-use licence involves
judgement. The key determinant of whether a licence is a
right-to-access licence is whether the Group is required to
undertake activities that significantly affect the licence
intellectual property (or the customer has a reasonable
expectation that it will do so) and the customer is, therefore
exposed to positive or negative impacts resulting from
those changes.
The Group considers for each contract that includes a
separate licence performance obligation all the facts and
circumstances in determining whether the licence revenue
is recognised over time or at a point in time from the go
live date of the licence.
Revenue: Contract modifications
The Group’s over-time contracts are often amended for
changes in contract specifications and requirements. Contract
modifications exist when the amendment either creates new
or changes the existing enforceable rights and obligations.
Material modifications are predominantly extension to contract
and in the current year also relate to cancellation of exam
sessions. The Group considers whether each contract
modification is part of the original contract or is a separate
contract and allocates the transaction price accordingly.
Revenue: Contract fulfilment costs
Contract fulfilment costs are divided into: (i) costs that give
rise to an asset; and (ii) costs that are expensed as incurred.
When determining the appropriate accounting treatment
for such costs, the Group firstly considers any other
applicable standards. If those other standards preclude
capitalisation of a particular cost, then the asset is
recognised under IFRS15.
If other standards are not applicable to contract fulfilment
costs, the Group applies the following criteria which, if met,
result in capitalisation: (i) the costs directly relate to a contract
or to a specifically identifiable anticipated contract; (ii) the
costs generate or enhance resources of the entity that will
be used in satisfying (or continuing to satisfy) performance
obligations in the future; and (iii) the costs are expected to
be recovered. The assessment of this criteria requires the
application of judgement, in particular at which point the
capitalisation ceases and the performance obligation begins.
Revenue: Amortisation, de-recognition and impairment
of contract fulfilment assets
The Group amortises contract fulfilment assets over the
expected contract period using a systematic basis that mirrors
the pattern in which the Group transfers control of the service
to the customer. The amortisation charge is included within
cost of sales.
A contract fulfilment asset is derecognised either when it
is disposed of, or when no further economic benefits are
expected to flow from its use or disposal.
Management is required to determine the recoverability of
contract related assets within property, plant and equipment
and within intangible assets, as well as contract fulfilment
assets, accrued income and trade receivables. At each
reporting date, the Group determines whether or not the
contract fulfilment assets are impaired by comparing the
carrying amount of the asset to the remaining amount of
consideration that the Group expects to receive less costs
that relate to providing services under the relevant contract.
In determining the estimated amount of consideration, the
Group uses the same principles as it does to determine the
contract transaction price, except that any constraints used
to reduce the transaction price required by IFRS 15 will be
removed for the impairment test.
153153
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Revenue: Deferred and accrued income
The Group’s customer contracts include a diverse range of
payment schedules dependent upon the nature and type of
goods and services being provided. The Group often agrees
payment schedules at the inception of long-term contracts
under which it receives payments throughout the term of the
contracts. These payment schedules may include progress
payments as well as regular monthly or quarterly payments
for ongoing service delivery. Payments for transactional goods
or services may be at delivery date, in arrears or part payment
in advance. There are no material financing arrangements.
Where payments made are greater than the revenue
recognised at the period end date, the Group recognises a
deferred income contract liability for this difference. Where
payments made are less than the revenue recognised at the
period end date, the Group recognises an accrued income
contract asset for this difference. Where accrued income
and deferred income exist on the same contract these
balances are shown net.
Intangible assets
All intangible assets, except goodwill, are stated at cost less
accumulated amortisation and any accumulated
impairment losses.
Goodwill
Goodwill represents the amount by which the fair value of
the cost of a business combination exceeds the fair value
of net assets acquired. Goodwill is not amortised and is
stated at cost less any accumulated impairment losses.
The recoverable amount of goodwill is tested for impairment
annually or when events or changes in circumstance indicate
that it might be impaired. Impairment charges are deducted
from the carrying value and recognised immediately in profit
or loss. For the purpose of impairment testing, goodwill is
allocated to each of the Group’s cash generating units. If
the recoverable amount of the cash generating unit is less
than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets
of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
Research and development costs
Research and development costs associated with the
development of software products or enhancements and
their related intellectual property rights are expensed as
incurred until all of the following criteria can be demonstrated,
in which case they are capitalised as an intangible asset:
a. the technical feasibility of completing the intangible
asset so that it will be available for use or sale;
b. an intention to complete the intangible asset and use
or sell it;
c. ability to use or sell the intangible asset;
d. how the intangible asset will generate probable future
economic benefits. Among other things, the Group can
demonstrate the existence of a market for the output of
the intangible asset or the intangible asset itself or, if it is
to be used internally, the usefulness of the intangible
asset;
e. the availability of adequate technical, financial and other
resources to complete the development and to use or
sell the intangible asset;
f. an ability to measure reliably the expenditure attributable
to the intangible asset during its development; and
g. the Group has the ability to control the asset and it is
separately identifiable. Configuration costs of
development activity on a third-party SaaS solution are
not deemed to be controlled by the Group unless it
has the contractual rights to control that software. Any
configuration activity provided by the SaaS supplier
is expensed as incurred. Customisation costs of
development activity on a third-party SaaS solution will
only be capitalised where the Group has a contractual
right to control the asset and it is separately identifiable.
Any customisation activity provided by the SaaS supplier
is expensed as incurred. In the majority of instances
where configuration or customisation on a third-party
SaaS solution is performed, the development work does
not meet the criteria of ability to control the asset nor is
it separately identifiable, so is expensed.
The technological feasibility for the Group’s software
products is assessed on an individual basis and is generally
reached shortly before the products or services are
released, and late in the development cycle. Capitalised
development costs are amortised on a straight-line basis
over their useful lives, once the product is available for use.
Useful lives are assessed on a project-by-project basis.
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RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Other intangible assets
Expenditure on internally generated goodwill and brands is
recognised in the Income Statement as incurred.
Other intangible assets that are acquired by the Group are
stated at cost less accumulated amortisation and
accumulated impairment losses.
Amortisation
Amortisation is charged to the Income Statement on a
straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with
an indefinite useful life and goodwill are systematically
tested for impairment at each balance sheet date. Other
intangible assets are amortised from the date they are
available for use. The estimated useful lives are as follows:
Brand
Website platform
Other software assets
Customer relationships
Intellectual property and
database assets
15 years
5 years
2 – 8 years
3 – 5 years
3 – 10 years
Property, plant and equipment
Property, plant and equipment assets are stated at cost, less
accumulated depreciation and any accumulated
impairment losses where appropriate.
Property, plant and equipment are depreciated by equal
annual instalments to write down the assets to their
estimated disposal value at the end of their useful lives as
follows:
Short leasehold improvements
The term of the lease
Plant, equipment and fixtures
3 – 10 years
Specialised plant and equipment 7 – 15 years
Computer equipment
Vehicles
2 – 5 years
2 – 4 years
Impairment of tangible and intangible assets
excluding goodwill
At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered
an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the
extent of any impairment loss. Where the asset does not
generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of the
cash generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less
costs to sell and value in use. If fair value is not directly
observable, valuation techniques will be applied using
relevant observable inputs. In assessing value in use, the
estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the
risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (or cash generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash
generating unit) in prior periods. A reversal of an
impairment loss is recognised as income immediately.
Held-for-sale asset
Held-for-sale assets are stated at the lower of cost less
accumulated depreciation and any impairment losses,
where appropriate, or fair value less costs to sell.
Assets are classified as held for sale, disclosed in Note 21,
if their carrying amount will be recovered through a sale
transaction rather than through continuing use. This condition
is regarded as met only when the sale is highly probable
and the asset is available for immediate sale in its present
condition. Management must be committed to the sale
which should be expected to qualify for recognition as a
completed sale within one year from the date of classification.
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RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Held-for-sale liabilities
Held-for-sale liabilities are recognised initially at fair value
and subsequent to initial recognition that fair value is
remeasured at each balance sheet date.
Trade and other payables
Trade payables on normal terms are not interest bearing. Trade
and other payables are recognised initially at fair value and
subsequent to initial recognition they are measured at
amortised cost using the effective interest method.
Financial instruments
Trade and other receivables
Trade and other receivables are not interest bearing, except
those specifically detailed in Note 20. Trade and other
receivables are recognised initially at fair value and subsequent
to initial recognition they are measured at amortised cost
using the effective interest method, less any
impairment losses.
The Group assesses on a forward-looking basis the expected
credit losses associated with its receivables carried at amortised
cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified
approach permitted by IFRS 9, resulting in trade receivables
recognised and carried at original invoice amount less an
allowance for any uncollectible amounts based on
expected credit losses.
Accrued income is recognised when services are performed
and revenue recognised in advance of an invoice being raised.
Cash and cash equivalents
Cash comprises cash at bank and in hand and deposits with
a maturity of three months or less from initial investment.
Bank overdrafts are included in cash only to the extent that
the Group has the unconditional right of set-off and intention to
net settle or realise simultaneously. Cash and cash equivalents
in the Cash Flow Statement include overdrafts where they
form an integral part of the Group’s cash management.
Borrowings
Borrowings relate to an unsecured revolving cash facility,
detailed in Note 31. All loans and borrowings are initially
recognised at their fair value less any directly attributable
transaction costs. After initial recognition, loans and borrowings
are subsequently measured at amortised cost using the
effective interest method.
Derivative financial instruments
The Group holds derivative financial instruments to hedge
its foreign currency exposure.
On initial designation of the derivative as the hedging
instrument, the Group formally documents the relationship
between the hedging instrument and hedged item, including
the risk management objectives and strategy in undertaking
the hedge transaction and the hedged risk, together with
the methods that will be used to assess the effectiveness of
the hedging relationship. The Group makes an assessment,
both at the inception of the hedge relationship as well as on
an ongoing basis, as to whether the hedging instruments
are expected to be 'highly effective' in offsetting the changes
in the fair value or cash flows of the respective hedged items
attributable to the hedged risk. For a cash flow hedge of a
forecast transaction, the transaction should be highly probable
to occur and should present an exposure to variations in cash
flows that could ultimately affect reported profit or loss.
Derivatives are recognised initially at fair value and attributable
transaction costs are recognised in profit or loss as incurred.
Subsequent to initial recognition, derivatives are measured
at fair value, and changes therein are accounted for as
described below. Fair value measurements are classified
using a fair value hierarchy.
Cash flow hedges
When a derivative is designated as the hedging instrument
in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognised asset or liability
or a highly probable forecast transaction that could affect
profit or loss, the effective portion of changes in the fair
value of the derivative is recognised in Other Comprehensive
Income and presented in the hedging reserve in equity.
Any ineffective portion of changes in the fair value of the
derivative is recognised immediately in profit or loss.
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RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
For all hedging of forecast financial transactions, the
associated cumulative gain or loss is removed from equity
and recognised in the Income Statement in the same
period or periods during which the hedged expected future
cash flows affect profit or loss. When the hedging instrument
is sold, expires, is terminated or exercised, or the entity revokes
designation of the hedge relationship but the hedged forecast
transaction is still expected to occur, the cumulative gain or
loss at that point remains in equity and is recognised in
accordance with the above policy when the transaction occurs.
If the hedged transaction is no longer expected to take place,
the cumulative unrealised gain or loss recognised in equity
is recognised in the Income Statement immediately.
Other non-trading derivatives
When a derivative financial instrument is not designated in
a hedge relationship that qualifies for hedge accounting,
all changes in its fair value are recognised immediately in
profit or loss.
Inventories
Finished goods are valued at cost on a first in first out basis,
including appropriate labour costs and other overheads.
Stocks are recognised when the Group has the rights and
obligations of ownership, which in the case of supply from
certain overseas territories may be from the point of production
or the point of shipment. All inventories are reduced to net
realisable value where lower than cost. Provision is made for
obsolete, slow moving and defective items where appropriate.
Provisions
A provision is recognised if, as a result of a past event, the
Group has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks
specific to the liability. The unwinding of the discount is
recognised as a finance cost.
Restructuring
A provision for restructuring is recognised when the Group
has approved a detailed and formal restructuring plan, and
the restructuring either has commenced or has been
announced publicly. Future operating losses are not
provided for.
Onerous contracts
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from a contract
are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present
value of the lower of the expected cost of terminating the
contract and the expected net cost of continuing with the
contract. Before a provision is established, the Group
recognises any impairment loss on the assets associated
with that contract.
Dilapidations provision
A dilapidations provision is recognised when the Group has
an obligation to rectify, repair or reinstate a leased premises to
a certain condition in accordance with the lease agreement.
The provision is measured at the present value of the estimated
cost of rectifying, repairing or reinstating the leased
premises at a specified future date.
Leases
At the inception of the lease, the Group recognises a
right-of-use asset at cost, which comprises the present value
of minimum lease payments determined at the inception of
the lease. Right-of-use assets are depreciated using the
straight-line method over the shorter of estimated life or the
lease term. Depreciation is included within administrative
expenses in the Consolidated Income Statement. Amendment
to lease terms resulting in a change in payments or the length
of the lease results in an adjustment to the right-of-use asset
and liability. Right-of-use assets are reviewed for impairment
when events or changes in circumstances indicate the carrying
value may not be fully recoverable. Right-of-use assets
(excluding property leases) exclude leases with a low value
and term of 12 months or less. These leases are expensed
to the Income Statement as incurred on a straight-line basis.
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RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
The lease liability is subsequently measured by increasing
the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the
carrying amount to reflect the lease payments made.
Interest is recognised on the lease liability, resulting in
higher finance cost in the earlier years of the lease term.
On initial recognition, lease liabilities are recorded at the
present value of lease payments, which include:
•• fixed lease payments;
•• variable payments that depend on an index or rate,
initially measured using the commencement date index
or rate; and
•• any amounts expected to be payable under residual
guarantees.
The interest rate implicit in the lease is used to discount
lease payments, or, if that rate cannot be determined, the
Group’s incremental borrowing rate is used, being the rate
that the Group would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar
economic environment with similar terms and conditions.
Share-based payments
The Group operates a number of executive and employee
share schemes. For all grants of share-based payments, the
fair value as at the date of grant is calculated using a pricing
model and the corresponding expense is recognised over
the vesting period. Where the vesting period is shortened
after the date of grant, the remaining expense is recognised
over the shortened vesting period. Over the vesting period
and at vesting the cumulative expense is adjusted to take
into account the number of awards expected to or actually
vesting as a result of survivorship and where this reflects
non-market-based performance conditions. Share-based
payment charges which are incurred by a subsidiary
undertaking are included as an increase in Investments in
subsidiary undertakings within the parent Company, and a
capital contribution in the subsidiary.
Employee benefits
Defined benefit pension schemes
The Group has both defined benefit and defined contribution
pension schemes. There are three defined benefit pension
schemes, the Research Machines plc 1988 Pension Scheme
(the RM Scheme), The Consortium CARE Scheme (the
CARE Scheme) and the Platinum Scheme. The RM Scheme
and the CARE Scheme are both operated for employees
and former employees of the Group only. The Platinum
Scheme is a multi-employer scheme, with the Group being
just one of a number of employers. The number of the
Group’s former employees in that Scheme is small and so
the impact/risk to the Group from that Scheme is limited.
For all defined benefit pension schemes, based on the
advice of a qualified independent actuary at each balance
sheet date and using the projected unit method, the
administrative expenses and current service costs are
charged to operating profit, with the interest cost, net of
interest on scheme assets, reported as a financing item.
Defined benefit pension scheme remeasurements are
recognised as a component of Other Comprehensive
Income such that the balance sheet reflects the scheme’s
surplus or deficit as at the balance sheet date. Contributions
to defined contribution plans are charged to operating
profit as they become payable.
Scheme assets are measured at bid-price, where available, at
30 November 2023. The present value of the defined benefit
obligation was measured using the projected unit method.
Under the guidance of IFRIC 14, the Group are able to
recognise a pension surplus on the balance sheet for all
three schemes. In the year the Platinum and RM schemes
show a surplus and the CARE scheme is in deficit.
Local Government Pension Schemes
Included within defined benefit pension scheme obligations
potential IAS 19 liabilities arising from the Group’s participation
in local government pension schemes. When the Group is
awarded certain customer contracts, employees transfer to the
relevant Group entity under TUPE provisions and as part of that
process that entity is admitted as a participating employer into
Local Government Pension Schemes (LGPS). As set out in Note
26, at 30 November 2023 the Group was a participating
employer in 23 LGPS schemes each having between 1 and 12
current employees. Some of these participating Schemes have
a customer contractual guarantee whereby the Group
reimburses for any IAS19 deficit when the Group ceases to
be a participating employer.
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RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
As a participant in a multi-employer defined benefit pension
scheme, the Group estimates the position on an IAS 19 basis
by using the most recent triennial valuation but with
appropriate and up-to-date actuarial inputs (such as discount
rate, CPI/RPI movements), internal information (such as
employee related data) but not IAS 19 inputs such as scheme
asset and liability movements and mortality assumptions that
relate to participating employees. As the Group is not the
main sponsoring employer in these schemes, the Group
does not have an unconditional right to recover surpluses,
either during the life of the scheme, when all the members
have left the plan or on a plan wind-up.
As a result, while the Company accounts for the schemes
as a defined benefit arrangement, with actuarial
movements recognised through Other Comprehensive
Income, due to the basis of calculation set out above, only
limited IAS 19 disclosures for these local government
pension schemes have been included in Note 26b.
At 30 November 2023, the defined benefit pension scheme
obligations liability incorporated information from the 23 local
government pension schemes based on the most recent
LGPS triennial valuations performed as at 31 March 2023 and,
based on the assumptions above, led to a calculation of a
liability position on these schemes of £27,000 (2022: £27,000).
Employee Share Trust
The Employee Share Trust, which holds ordinary shares of
the Company in connection with certain share schemes, is
consolidated into the Financial Statements. Any
consideration paid to the Trust for the purchase of the
Company’s own shares is shown as a movement in
shareholders’ equity. The Employee Share Trust is treated as
a branch in the consolidated Financial Statements.
Own Shares Held
The 'Own Shares Reserve' figure is calculated based on the
number of shares held by the Employee Share Trust (EST)
as at 30 November 2023 (being 618,796 shares) multiplied
by the weighted average cost of those shares.
Translation reserve
The translation reserve comprises all foreign exchange
differences from the translation of the Financial Statements
of foreign operations. This is not distributable.
Cash flow hedging reserve
The hedging reserve comprises the effective portion of the
cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet
occurred. Only realised gains and total losses are distributable.
Taxation
Current tax, including UK corporation tax and foreign tax, is
provided at amounts expected to be paid or recovered
using the tax rates and laws that have been enacted or
substantively enacted by the balance sheet date.
Deferred taxation is accounted for using the balance sheet
liability method in respect of temporary differences arising
from differences between the carrying amount of assets and
liabilities in the Financial Statements and the corresponding
tax bases used in computation of taxable profit. Deferred tax
liabilities are recognised for all taxable temporary differences
except in respect of investments in subsidiaries where the
Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
Current tax balances are offset when there is a legally
enforceable right to set off current tax assets against
current tax liabilities.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profit will be available against
which the temporary difference can be utilised.
Their carrying amount is reviewed at each balance sheet
date on the same basis.
Deferred tax is measured on an undiscounted basis, and at
the tax rates that are expected to apply in the periods in
which the asset or liability is settled. It is recognised in the
Income Statement except when it relates to items credited
or charged directly to equity, in which case the deferred tax
is also dealt with in equity. Deferred tax assets and liabilities
are offset when they relate to income taxes levied by the
same taxation authority and when the Group intends to
settle its current tax assets and liabilities on a net basis.
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RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
2. Significant accounting policies continued
Foreign currencies
The Group presents its Financial Statements in Pounds
Sterling because this is the currency in its primary operating
environment. Balance sheet items of subsidiary undertakings
whose functional currency is not Pounds Sterling are
translated into Pounds Sterling at the period-end rates of
exchange. Income statement items and the cash flows of
subsidiary undertakings are translated at the average rates for
the period. Foreign exchange differences on the translation
of subsidiary opening net assets at closing rates of exchange
and the differences arising between the translation of profits
at average and closing exchange rates are recorded as
movements in the currency translation reserve.
Transactions denominated in foreign currencies are
translated into Pounds Sterling at rates prevailing at the
dates of the individual transactions. Foreign currency
monetary assets and liabilities are translated at the rates
prevailing at the balance sheet date. Exchange gains and
losses arising are charged or credited to the Income
Statement. Foreign currency non-monetary amounts are
translated at rates prevailing at the time of establishing the
fair value of the asset or liability.
During the year ended 30 November 2023, foreign
exchange differences arising on an intercompany loan with
a foreign subsidiary were treated as finance income or
finance costs in line with the underlying asset. This
represents a new accounting policy. In prior periods, this
exchange difference was recorded in operating costs but as
the amount is not considered material, management has
not restated the prior year results.
The functional currency of the Company is Pounds Sterling.
Dividends
Dividends are recognised as a liability in the period in which the
shareholders’ right to receive payment has been established.
Key sources of estimation uncertainty
In applying the Group’s accounting policies the Directors
are required to make estimates and assumptions. Actual
results may differ from these estimates. The Group’s key
risks are set out in the Strategic Report and give rise to the
following estimations which are disclosed within the
relevant note to the Report and Accounts:
•• Valuation of RM Consortium assets – During the year
management performed an impairment review of all RM
Consortium segment assets to determine their estimated
recoverable amounts, defined as being the higher of fair
value less costs to sell and value in use. As a result of
estimating these recoverable amounts, management
recognised an impairment charge of £38.9m against the
value of RM Consortium assets, as set out in Note 6. If
management assumed that the recoverable amount of
property, plant and equipment, inventory and other current
assets was 5% higher, the impairment charge would have
been reduced by £0.5m.
•• Retirement benefit scheme valuation – The present value
of post-employment benefit obligations is determined
on an actuarial basis using various assumptions, including
the discount rate, inflation rate and mortality assumptions.
Any changes in these assumptions will impact the carrying
amount as well as the net pension finance cost/(income).
Key assumptions and sensitivities for post-employment
benefit obligations are disclosed in Note 26.
•• Revenue from RM Assessment contracts which contain
variable revenues based on the number of exam scripts
– There is estimation relating to total script volumes to
determine the transaction price over the life of the
contract and the standalone selling price for scanning
and the use of the residual method to determine a value
for the provision of technology and support services. The
sensitivity analysis related to future script volumes show
that if UK and International exams increased by 5%
against assumed volumes from 2024 onwards, then
revenue in 2023 would be increased by c.£0.4m. See
Note 3 for further details.
•• Impairment reviews – As part of the impairment review of
goodwill and investments in subsidiary undertakings,
calculating the net present value of the future cash flows
requires estimates to be made in respect of highly
uncertain matters including future cash flows derived
from the most recent Board-approved and forecasts,
discount rates and growth rates. Where the forecast is not
supportable by prior performance, the FY24 budget has
been used in perpetuity. Changing the assumptions
selected by management, in particular changes in
expected average price increases or average volumes,
allocation of corporate costs, discount rate and long term
growth rate could significantly affect the Group’s
impairment evaluation and hence reported assets and
profits or losses. Further details, including a sensitivity
analysis, are set out in Notes 13 and 17.
160160
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
•• Recognition of pension surplus – The Group has
determined that when all members leave the various
defined benefit pension schemes, any surplus remaining
would be returned to the Group in accordance with the
trust deed. As such, the full economic benefit of any
surplus under IAS 19 is deemed available to the Group and
is recognised in the balance sheet.
•• International Baccalaureate AOS – Management have
reviewed the performance obligations associated with this
contract and judged that, as the performance obligation
had not been met at 30 November 2023, development
work to date of £3.6m should continue to be recognised as
intangible assets in accordance with IAS 38 and £3.3m of
amounts received should continue to be recognised as
deferred revenue.
Classification of adjusting items – A number of judgements
are made in the preparation of the Annual Report and
Accounts, in the presentation of both certain costs and
income as adjustments. The factors considered in making this
judgement are the size or nature of the adjustment and their
impact on the segment. These are fully set out in Note 6.
•• Classification of income related to IPv4 addresses – IPv4
••
addresses that relate to designated stock are recognised as
revenues (2023: £nil, 2022: £1.3m) but those relating to
assets originally intended for use within the Technology
business (2023: £10.6m, 2022: £2.8m) are other income.
The assets originally designated as intangible are
considered to be material to the underlying performance of
the segment and have been treated as an adjustment.
2. Significant accounting policies continued
Critical accounting judgements
In applying the Group’s accounting policies the Directors
are required to make judgements and assumptions, actual
results may differ from these. The Group’s key risks are set
out in the Strategic Report and give rise to the following
judgements which are disclosed within the relevant note to
the Report and Accounts:
•• Going concern – In concluding the going concern
assessment was appropriate, the Directors have made a
number of significant judgements as set out in Note 2.
•• Revenue from RM Assessment contracts – A number of
judgements are made in the application of IFRS 15
Revenue from contracts with customers to certain
RM Assessment contracts. The most significant
judgements relate to contracts with multiple performance
obligations and where there is a variable transaction price
based on the number of exam scripts. In these contracts
there is judgement in the determination that the provision
of technology is a right-to-access arrangement and
therefore should be recognised over time. The factors
considered in making this judgement were the nature of
services provided, including hosting, ongoing
maintenance and system support.
•• Revenue from RM Technology contracts – A number of
judgements are made in the application of IFRS 15 Revenue
from contracts with customers to certain RM Technology
contracts. The most significant judgement relates to the
determination that the provision of technology is a right-to-
access arrangement and therefore should be recognised
over time. The factors considered in making this judgement
were the nature of services provided, i.e., licensed on a
subscription basis, being centrally hosted and the customer
is unable to take possession of the software.
•• Goodwill allocation – Management have allocated the
Resources goodwill between RM Consortium and RM TTS
on the basis of the relative values of the two businesses.
Judgement was required in determining the allocation of
this goodwill, with management determining that using
the material profits of the two businesses over a number
of years is the most appropriate method, as the value of
these businesses is based on sales of goods. As a result,
£10.6m of goodwill was allocated to RM Consortium and
£31.6m to RM TTS as set out in Note 13. If a different
allocation methodology had been used, such as on the
basis of revenues or net assets, the allocation would have
been materially different.
161161
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
3. Revenue
Year ended 30 November 2023
Supply of products
Rendering services
Licences
RM
TTS
Transactional
£000
RM
Consortium
Transactional
£000
RM
Technology
Transactional
£000
RM
Technology
Over Time
£000
RM
Assessment
Over Time
£000
Total
£000
75,884
19,300
-
-
-
-
75,884
19,300
18,209
4,564
3,731
26,504
-
25,012
6,147
31,159
-
113,393
41,673
666
71,249
10,544
42,339
195,186
Year ended 30 November 2022
(Restated)1
Supply of products
Rendering services
Licences
RM
TTS
Transactional
£000
RM
Consortium
Transactional
£000
80,619
33,738
-
-
9
-
80,619
33,747
RM Technology
Transactional
£000
RM Technology
Over Time
£000
RM Assessment
Over Time
£000
Total
£000
17,108
2,519
5,298
24,925
-
30,357
5,579
35,936
-
131,465
37,979
961
70,864
11,838
38,940
214,167
1. Following the decision by management to separately monitor the results of Consortium and TTS brands in June 2023, the previously reported
RM Resources segment has been allocated between the RM TTS segment, which continues to be operated by the Group, and the RM
Consortium segment which has ceased trading. Prior year comparatives have been restated accordingly..
The RM Technology transactional licence revenues include £nil (2022: £1.3m) in relation to sales of IPv4 addresses from
designated stock. These IP addresses were held at nil cost.
Each contract is analysed separately to identify the performance obligations and judgements made as to whether, for
example, goods and services should be combined. For some contracts judgement is also required to allocate the
transaction price to each performance obligation based on the standalone selling price or, for licences, the residual
amount. Judgements include determination of performance obligations and allocation of revenue to performance
obligations. Within RM Assessment scanning revenues of £5.8m (2022: £6.9m) are judged to be delivered over time. The
associated transaction price will be dependent on over-time variables (such as volumes). The over-time period for scanning
related revenues is over exam sessions, but this relatively short time span may fall into different external reporting periods.
Revenue is then recognised based on these judgements which are set out in more detail in Note 2.
There is estimation relating to total script volumes to determine the transaction price over the life of the contract as
described in Note 2. The sensitivity analysis related to future script volumes shows that if UK and International exams
increased by 5% against assumed volumes from 2024 onwards, then revenue in 2023 would be increased by c.£0.4m
(2022: 15% against our assumed volumes from 2023 onwards, then revenue in 2022 would be increased by c.£0.7m).
162162
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
3. Revenue continued
The table below shows the time bands of the expected timing of revenue to be recognised on over-time contracts at
30 November 2023.
Year ended
30 November 2023
< 1 year
1-2 years
2-5 years
> 5 years
Total
Year ended
30 November 2022
< 1 year
1-2 years
2-5 years
> 5 years
Total
RM Technology
Over Time
£000
RM Assessment
Over Time
£000
4,392
3,730
-
-
8,122
26,563
11,260
2,931
-
40,754
RM Technology
Over Time
£000
RM Assessment
Over Time
£000
5,192
3,967
3,259
-
12,418
22,257
13,673
8,325
878
45,133
Total
Over Time
£000
30,955
14,990
2,931
-
48,876
Total
Over Time
£000
27,449
17,640
11,584
878
57,551
The order book represents the consideration the Group will be entitled to receive from customers when the Group satisfies the
remaining performance obligations that are not yet met from contracts in place at the balance sheet date. However, the total
revenue that will be earned from the order book in future may change through non-contracted volumetric revenue, scope changes
and contract extensions. These elements have been excluded from the figures in the table above as they are not contracted.
4. Operating segments
The Group’s business is supplying products, services and solutions to the UK and international education markets. The
Chief Executive is the Chief Operating Decision Maker. Information reported to the Group’s Chief Executive for the purposes
of resource allocation and assessment of segmental performance is focused on the nature of each type of activity.
The Group was historically structured into three operating Divisions: RM Resources, RM Assessment and RM Technology,
however, following the decision by management to separately monitor the results of the Consortium and TTS brands in
June 2023, the previously reported RM Resources segment has been allocated between the RM TTS segment, which
continues to be operated by the Group, and the RM Consortium segment which has ceased trading.
The Chief Operating Decision Maker reviews segments at an adjusted operating profit level and adjustments are not
allocated to segments. Adjustments includes the impairment of intangible asset as set out in Note 6, which is not allocated
by segment nor may be broken out by segment.
A full description of each revenue-generating Division, together with comments on its performance and outlook, is given in
the Strategic Report. Corporate Services consists of central business costs associated with being a listed company and
non-division-specific pension costs.
163163
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
4. Operating segments continued
This Segmental analysis shows the result and assets of these Divisions. Revenue is that earned by the Group from third
parties. Net financing costs and tax are not allocated to segments as the funding, cash and tax management of the Group
are activities carried out by the central treasury and tax functions.
Segmental results
Year ended
30 November 2023
Revenue
UK
Europe
North America
Asia
Middle East
Rest of the world
Adjusted profit/(loss) from operations
Finance income
Finance costs
Adjusted loss before tax
Adjustments (see Note 6)
Loss before tax
RM
TTS1
£000
RM
Consortium
£000
RM
Assessment
£000
RM
Technology
£000
Corporate
Services
£000
Total
£000
52,229
12,757
4,722
1,049
3,730
1,397
75,884
5,949
19,300
-
-
-
-
-
19,300
(9,679)
24,756
10,315
131
1,219
157
5,761
42,339
10,252
57,545
86
32
-
-
-
57,663
-
-
-
-
-
-
-
749
(6,960)
1. Included in UK are International Sales via UK Distributors of £755,000.
RM
TTS1
£000
RM
Consortium
£000
RM
Assessment
£000
RM
Technology
£000
Corporate
Services
£000
58,232
12,907
3,555
879
3,284
1,762
80,619
7,817
33,707
23,324
59,416
12
-
1
21
6
33,747
(5,006)
8,153
142
1,299
167
5,855
38,940
7,378
71
1,374
-
-
-
60,861
2,173
-
-
-
-
-
-
-
(4,879)
Year ended
30 November 2022
(Restated)
Revenue
UK
Europe
North America
Asia
Middle East
Rest of the world
Adjusted profit/(loss) from operations
Finance income
Finance costs
Adjusted profit before tax
Adjustments (see Note 6)
Loss before tax
1. Included in UK are International Sales via UK Distributors of £687,000.
164164
153,830
23,158
4,885
2,268
3,887
7,158
195,186
311
1,105
(6,585)
(5,169)
(36,069)
(41,238)
Total
£000
174,679
21,143
5,071
2,179
3,472
7,623
214,167
7,483
614
(2,825)
5,272
(26,059)
(20,787)
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
4. Operating segments continued
Segmental assets
At 30 November 2023
Segmental
Other
Total assets
At 30 November 2022
Segmental
Other
Total assets
RM
TTS
£000
RM
Consortium
£000
RM
Assessment
£000
RM
Technology
£000
Corporate
Services
£000
Total
£000
28,286
17,353
15,067
16,158
39,617
116,481
RM
TTS
£000
RM
Consortium
£000
RM
Assessment
£000
RM
Technology
£000
Corporate
Services
£000
33,373
61,499
16,315
10,936
51,640
23,283
139,764
Total
£000
173,763
28,891
202,654
Included within the disclosed segmental assets are non-current assets (excluding defined benefit pension surplus and
deferred tax assets) of £61.7m (2022: £109.1m) located in the United Kingdom, £5.8m (2022: £9.0m) located in Australia
and £1.0m (2022: £1.0m) located in India. Other non-segmented assets include defined benefit pension surplus, other
receivables, tax assets and cash and short-term deposits. Goodwill is included within the Corporate Services segment.
Consortium segmental assets include a leased warehouse which has been repurposed to be used by TTS after the year-end.
165165
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
Note
13
14
14
15, 16
5. Profit/(loss) from operations
Profit/(loss) from operations is stated after charging/(crediting):
Impairment of goodwill – charged in operating expenses
Impairment of other intangible assets - charged in operating expenses
Amortisation of other intangible assets - charged in operating
expenses
Depreciation and impairment of property, plant and equipment and
right-of-use assets
– charged in cost of sales
– charged in operating expenses
Selling and distribution costs
Research and development costs
Administrative expenses
Adjusted operating expenses
Adjustments to administrative expenses
(see Consolidated Income Statement)
Total operating expenses
(Gain)/loss on disposal of property, plant and equipment
Cost of inventories recognised as expense
Staff costs (see Note 7)
Operating lease expense (low value or less than a year)
Foreign exchange loss/(gain)
Inventory write-offs - RM Consortium (see Note 6)
Inventory write-offs - Other
Increase/(decrease) in inventory obsolescence provision
Fees payable to the Company’s auditor
Fees payable to the Company’s auditor for the audit of these Financial
Statements:
– the audit of the Company’s Financial Statements
– the audit of the Company’s subsidiaries pursuant to legislation
Other fees payable to the Company’s auditor:
– other services1
Year ended
30 November 2023
£000
Year ended
30 November 2022
(Restated)
£000
10,575
17,789
2,686
20,475
616
10,948
11,564
25,090
3,954
36,729
65,772
46,854
112,626
(265)
71,770
67,682
35
650
2,827
534
438
60
1,272
1,030
2,362
-
-
4,354
4,354
763
4,386
5,149
26,940
3,078
31,003
61,021
29,069
90,090
41
80,257
69,561
80
(211)
-
390
(215)
60
927
125
1,112
1. Fees for other services include reporting accountant fees paid to the Company’s auditor in connection with the Group’s Class 1 sale of the RM
Integris and RM Finance businesses.
The prior year restatement is detailed in Note 33.
166166
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
6. Alternative performance measures
As set out in Note 2, the Group uses alternative performance measures that the Board believes reflects the trading
performance of the Group, and it is these adjusted measures that the Board use as the primary measures of performance
measurement during the year.
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
Adjustments to operating expenses
Amortisation of acquisition-related intangible assets
Impairment of RM Consortium assets1
Restructuring costs
Configuration of SaaS licences (ERP)
Independent business review related costs
Dual running costs related to investment strategy
Impairment of ERP solution
Onerous provision for IS licences
Disposal related costs
Total adjustments to operating expenses
Other income
Sale of IP addresses
Gain on disposal of operations
Gain on sale of property
Total adjustments to other income
Total adjustments
Tax impact (Note 10)
Total adjustments after tax – continuing operations
Gain on disposal of discontinued operations
Total adjustments after tax
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(k)
(h)
(i)
(j)
(k)
1,691
38,949
2,678
3,063
473
-
-
-
-
46,854
(10,614)
(171)
-
(10,785)
36,069
(6,002)
30,067
(13,444)
16,623
1,839
-
254
17,355
-
5,372
2,236
1,168
845
29,069
(2,791)
-
(219)
(3,010)
26,059
(6,458)
19,601
-
19,601
1. Includes £10,575,000 of goodwill impairment (see Note 10), £17,431,000 of impairment of other intangible assets, £5,881,000 of impairment of
property, plant and equipment, £2,827,000 of inventory write downs, £737,000 write off of other current assets and an onerous contract
provision of £1,498,000 in respect of IT licences. See (a) below for further details.
Adjusted items:
These are items which are identified by virtue of either their size or their nature to be important to understanding the
performance of the business including the comparability of the results year-on-year. These items can include, but are not
restricted to, impairment; gain on held-for-sale assets and related transaction costs; changes in the provision for
exceptional property costs; the gain/loss on sale of operations; and restructuring and acquisition costs.
167167
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
6. Alternative performance measures continued
During the year ended 30 November 2023, the Group announced the decision to cease trading in the RM Consortium
business and the consequent termination of the Group’s ERP programme which had formed part of the Group's 2018
warehouse strategy to transfer all its previous warehouse operations into one new automated warehouse together with an
interlinked ERP solution which was planned to be rolled out to the whole Group. The Group believes that the size,
complexity and number of unusual costs associated with these developments, were material to the understanding of the
trading performance of the business including the comparability of results year-on-year. As a result, all significant costs
relating to these developments have also been treated as an adjustment to profit, consistently period to period.
The amortisation of acquisition related intangible assets is an annual recurring adjustment to profit that is a non-cash
charge arising from historical investing activities. This adjustment is made to clearly highlight the amounts relating to
historical acquisitions and is in common with peer companies across the technology sector. The income generated from
the use of these intangible assets is, however, included in the adjusted profit measures.
The following costs and income were identified as adjusted items:
(a) Following the announcement of the closure of the Consortium business and the subsequent termination of the ERP
replacement programme, management performed an impairment review resulting in the Group recognising a total
impairment charge of £38.9m including £10.6m of goodwill relating to the RM Consortium business (see Note 13),
£17.4m of intangible assets including all remaining Consortium brand and ERP assets (see Note 14), £5.9m of property,
plant and equipment at the RM Consortium warehouse (see Note 15), £2.8m of RM Consortium inventory write downs
to net realisable value, £0.7m of other current assets and an onerous contract provision of £1.5m in respect of IT licences
associated with the Group’s ERP solution.
(b) Restructuring costs of £2.7m (2022: £0.3m) of which £0.8m related to the Group’s decision to cease trading in the RM
Consortium business.
(c) The configuration and customisation costs relating to the ERP replacement programme, which have been expensed in
accordance with IAS 38: Intangible Assets and IFRIC agenda decisions but have been treated as adjusting items as they
were a significant component of the Group’s warehouse strategy. These costs total £3.1m (2022: £17.4m) based on the
development work undertaken
(d) Independent Business Review related costs totalling £0.5m (2022: £nil) undertaken on behalf of the lenders and pension
scheme.
(e) Dual running costs in 2022 of £5.4m related to the Group’s warehouse strategy, which became fully operational that
year. Costs included £2.8m associated with the new warehouse including items such as utilities, security and increased
warehouse staff to test the new facility and to transfer inventory and £2.6m of IT costs (excluding configuration costs of
SaaS licences) being expensed that relate to running of IT systems not yet in use.
(f) In 2022, the Group impaired £2.2m of ERP replacement programme costs, previously capitalised within the RM
Technology Division, which related to functionality that was paused and where the Group had no active plans to
proceed to implement.
(g) I n 2022, the Group recognised an onerous contract provision of £1.2m in respect of IT licences associated with its ERP
solution.
(h) Income generated following the completion of the sale of IP addresses totalling £10.6m (2022: £2.8m).
(i) Gain on disposal of operations of £0.2m (2022: £nil) following the completion of the iCase business disposal.
(j) In 2022, the Group disposed of a warehouse that was no longer required following the estates strategy review. This
warehouse sale generated proceeds of £3.3m and a profit after direct selling costs and costs of moving from the
warehouse of £0.2m.
(k) During the year ended 30 November 2023, the Group completed the disposal of the RM Integris and RM Finance
business which generated a gain on sale of operations of £13.4m (2022: loss of £0.8m) representing proceeds of £15.3m
(2022: £nil) less £1.9m (2022: £0.8m) of costs associated with the disposal.
168168
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
6. Alternative performance measures continued
Adjusted net debt of £45.6m (2022: £46.8m) is the total of borrowings less capitalised fees of £53.7m (2022: £48.7m) and cash
at bank of £8.1m (2022: £1.9m). Lease liabilities of £16.5m (2022: £19.1m) are excluded from this measure as they are not
included in the measurement of adjusted net debt for the purpose of covenant calculations. Adjusted net debt is a key metric
measured by management as it is used in covenant calculations. The details of the covenant calculations are set out in Note 31.
Average adjusted net debt is calculated by taking the adjusted net debt on a daily basis and dividing by the number of days.
The above adjustments have the following impact on the cash flow statement:
(Loss)/profit before tax
(Loss)/profit from operations
Cash used by operations
Net cash used by operating activities
Net cash generated from investing activities
Net cash (used by)/generated from
financing activities
Year ended 30 November 2023
Year ended 30 November 2022
Statutory
Measure
£000
(41,238)
(46,543)
(4,683)
(10,455)
20,854
(4,141)
Adjustment
£000
(36,069)
(46,854)
(5,107)
(5,107)
24,218
-
Adjusted
cash flows
£000
(5,169)
311
424
(5,348)
(3,364)
(4,141)
Statutory
Measure
£000
(20,787)
(21,586)
(17,129)
(20,786)
891
20,293
Adjustment
£000
Adjusted cash
flows
£000
(26,059)
(29,069)
(24,480)
(24,480)
1,403
-
5,272
7,483
7,351
3,694
(512)
20,293
Net increase in cash and cash equivalents
6,258
19,111
(12,853)
398
(23,077)
23,475
The adjustments have the following impact on key metrics:
Year ended 30 November 2023
Year ended 30 November 2022 (Restated)
Gross profit
Statutory
Measure
£000
66,083
Adjustment
£000
-
(Loss)/profit from operations
(46,543)
(46,854)
Operating margin (%)
Adjusted EBITDA
(Loss)/profit before tax
Tax
-23.8%
(3,383)
(41,238)
(2,070)
-24.0%
(10,372)
(36,069)
6,002
Adjusted
measure
£000
66,083
311
0.2%
6,989
(5,169)
(8,072)
Statutory
Measure
£000
68,504
(21,586)
-10.1%
(12,083)
(20,787)
4,698
Adjustment
£000
-
(29,069)
-13.6%
(24,994)
(26,059)
6,458
(Loss)/profit after tax
(43,308)
(30,067)
(13,241)
(16,089)
(19,601)
Earnings per share (see Note 11)
Basic (Pence)
Diluted (Pence)
(52.0)
(52.0)
(15.9)
(15.9)
(19.3)
(19.3)
Adjusted
measure
£000
68,504
7,483
3.5%
12,911
5,272
(1,760)
3,512
4.2
4.2
Adjusted operating profit is defined as the profit from continuing operations before excluding the adjustments referred to
above. Operating margin is defined as the operating profit as a percentage of revenue.
Adjusted EBITDA is defined as the profit from operations before impairment, amortisation and depreciation costs including
£10,575,000 of goodwill impairment (see Note 13), £17,431,000 of impairment of other intangible assets (see Note 14),
£2,686,000 of amortisation of other intangible assets (see Note 14), £5,881,000 of impairment of property, plant and
equipment (see Note 15), £2,448,000 of depreciation of property, plant and equipment (see Note 15) and £3,235,000 of
depreciation of right-of-use assets (see Note 16).
The impact of tax is set out in Note 10.
169169
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
7. Staff numbers and costs
The average number of persons (including Directors) employed by the Group during the year was as follows:
Research and development, products and services
Marketing and sales
Corporate Services
Year ended
30 November 2023
Number
Year ended
30 November 2022
Number
1,321
232
278
1,831
1,566
298
276
2,140
The above figures have been calculated on a Full Time Equivalent basis. The actual monthly average number for the year is
1,840 (2022: 2,174). There are 20 (2022: 41) employees that were associated with the discontinuing operations (see Note
21).
Aggregate emoluments of persons employed by the Group comprised:
Wages and salaries
Termination costs
Social security costs
Other pension costs
Share-based payments (credit)/expense (Note 28)
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
59,163
2,695
4,120
2,068
(364)
67,682
62,297
432
4,565
2,227
40
69,561
Information regarding the remuneration of the Directors is shown in the Remuneration Report.
The Company had no employees throughout the year (2022: nil).
Information regarding the remuneration of key management personnel, which consisted of the Group’s Directors and
members of the Executive management team, is set out in Note 32.
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
Note
9
5
14
1,091
1,105
5
2
7
607
614
8. Finance income
Bank interest
Other finance income
Total income from financial assets measured at amortised cost
Net investment income on defined benefit pension scheme
26
170170
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
9. Finance costs
Borrowing facilities arrangement fees and commitment fees
Unwinding of discount on provisions
Net finance costs on defined benefit pension scheme
Foreign exchange
Interest on lease liabilities
Interest on bank loans and overdrafts
Note
24
26
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
491
89
-
441
330
5,234
6,585
425
-
39
-
347
2,014
2,825
Foreign exchange for the year ended 30 November 2023 includes exchange differences arising on an intercompany loan
with a foreign subsidiary which is now treated as finance income or finance costs in line with the underlying asset. This
represents a new accounting policy. In prior periods, this exchange difference of £80,000 was recorded in operating costs
but as the amount is not considered material, management has not restated the prior year results.
10. Tax
a) Analysis of tax (credit)/charge in the Consolidated Income Statement
Current taxation
UK corporation tax
Adjustment in respect of prior years
Foreign tax
Total current tax charge
Deferred taxation
Temporary differences
Adjustment in respect of prior years
Overseas tax
Total deferred (credit)/charge
Total Consolidated Income Statement tax charge/(credit)
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
296
796
479
1,571
(23)
527
(5)
499
2,070
303
121
495
919
(4,856)
(109)
(652)
(5,617)
(4,698)
171171
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
10. Tax continued
b) Analysis of tax (credit)/charge in the Consolidated Statement of Comprehensive Income
Deferred tax
Defined benefit pension scheme movements
Fair value movements of hedging instruments
Deferred tax relating to the change in rate
Total Consolidated Statement of Comprehensive Income tax credit
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
(2,790)
-
-
(2,790)
(2,407)
(11)
(507)
(2,925)
c) Reconciliation of Consolidated Income Statement tax charge
The tax charge in the Consolidated Income Statement reconciles to the effective rate applied by the Group as follows:
Year ended 30 November 2022
Adjustment
Adjusted
£000
£000
Year ended 30 November 2023
Adjustment
Adjusted
£000
£000
Total
£000
Total
£000
(Loss)/profit on ordinary activities before tax1
(4,409)
(22,625)
(27,034)
6,862
(26,059)
(19,197)
Tax at 23.01% (2022: 19%) thereon:
(1,015)
(5,206)
(6,221)
1,304
(4,951)
(3,647)
Effects of:
– Change in tax rate on carried forward deferred
tax assets
– Expenses not deductible for tax purposes
– Non-taxable income
– Impact of super deduction
– Change in rate on current year movements
– Other temporary timing differences: UK
– Other temporary timing differences: Overseas
– Effect of (profits)/losses in various overseas tax
jurisdictions
– Previously recognised deferred tax now
unrecognised
– Prior period adjustments: UK
– Prior period adjustments: Overseas
– Other
Tax charge/(credit) in the Consolidated Income
Statement
1. Includes discontinued operations.
267
206
(42)
-
-
2,498
1,138
(324)
3,857
1,259
64
164
-
267
2,446
2,652
(3,094)
(3,136)
-
-
(97)
(51)
-
-
-
-
-
-
-
2,401
1,087
(324)
3,857
1,259
64
164
-
14
-
(56)
64
-
396
60
(153)
131
-
100
(43)
-
-
114
(43)
(56)
(1,564)
(1,500)
-
-
-
-
-
-
396
60
(153)
131
8,072
(6,002)
2,070
1,760
(6,458)
(4,698)
The above reconciliation of tax relates to continuing operations and as set out in Note 21, no corporation tax balances will
be impacted by disposal.
172172
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
10. Tax continued
The tax impact on the adjustments set out in Note 6 are as follows:
Impact of tax on Adjustment items
Change in deferred tax rate
Amortisation of acquisition-related intangible assets
Impairment of RM Consortium assets
Restructuring costs
Configuration of SaaS licences (ERP)
Independent business review related costs
Dual running costs related to investment strategy
Impairment of ERP solution
Onerous provision for IS licences
Disposal related costs
Gain on sale of property
Gain on disposal of operations
Sale of IP addresses
2023
2022
Charge/
(income)
£000
-
1,691
38,949
2,678
3,063
473
-
-
-
-
-
(171)
(10,614)
36,069
Tax
£000
-
389
6,704
619
623
109
-
-
-
-
-
-
(2,442)
6,002
Charge/
(income)
£000
-
1,839
-
254
Tax
£000
(1,564)
(349)
-
(48)
17,355
(3,298)
-
5,372
2,236
1,168
845
(219)
-
(2,791)
26,059
-
(1,021)
(425)
(222)
(61)
-
-
530
(6,458)
Factors that may affect future tax charges
The standard rate of corporation tax in the UK for the period is 25% (2022: 19%).
d) Deferred tax
The Group has recognised deferred tax assets as these are anticipated to be recognised against future periods.
The major deferred tax assets and liabilities recognised by the Group and the movements thereon are as follows:
Group
At 1 December 2021
(Charge)/credit to income
Credit/(charge) to other
comprehensive income
At 30 November 2022
(Charge)/credit to income
Credit/(charge) to other
comprehensive income
Credit to equity
Accelerated
depreciation
£000
(235)
(556)
-
(791)
1,400
-
-
Defined-
benefit
pension
scheme
obligation
£000
(7,588)
-
1,937
(5,651)
(97)
2,790
-
At 30 November 2023
609
(2,958)
Share-based
payments
£000
Short-term
timing
differences
£000
236
(177)
-
59
16
-
11
86
657
164
(319)
502
(336)
-
-
Acquisition-
related
intangible
assets
£000
Total
£000
(3,744)
(10,674)
344
-
5,617
2,925
(3,400)
(2,132)
2,933
-
-
Losses
£000
-
5,842
1,307
7,149
(4,415)
-
-
166
2,734
(467)
(499)
2,790
11
170
173173
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
10. Tax continued
Analysed on the balance sheet as:
Group
Deferred tax assets
Deferred tax liabilities
At 30 November
Defined-
benefit
pension
scheme
obligation
£000
Accelerated
depreciation
£000
Share-based
payments
£000
Short-term
timing
differences
£000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Company
At 1 December 2021
(Charge)/credit to
income
At 30 November 2022
(Charge)/credit to
income
At 30 November 2023
Certain deferred tax assets and liabilities have been offset above.
2023
£000
170
-
170
Acquisition-
related
intangible
assets
£000
-
-
-
-
-
Losses
£000
-
1,576
1,576
(1,576)
-
2022
£000
174
(2,306)
(2,132)
Total
£000
-
1,576
1,576
(1,576)
-
The Group has recognised deferred tax assets in jurisdictions where these are expected to be recoverable against profits in
future periods.
The rate of UK Corporation Tax increased to 25% from 1 April 2023. Taxation for other jurisdictions is calculated at the rates
prevailing in the respective territories.
Deferred tax assets and liabilities have been offset where the group has a legally enforceable right to set off current tax
assets against current tax liabilities an where the deferred tax assets and the deferred tax liabilities relates to income taxes
levied by the same tax authority on the same taxable entity.
No deferred tax liability is recognised on temporary differences of £678,000 (2022: £445,000) relating to the unremitted
earnings of overseas subsidiaries as the Group is able to control the timings of the reversal of these temporary differences
and it is probable that they will not reverse in the foreseeable future.
A deferred tax asset of £10,542,000 (2022: £396,000) has not been recognised due to uncertainty that the asset will be
utilised in the foreseeable future. This deferred tax asset relates to UK and Australia split and includes £312,000 in respect of
tangible and intangible assets, £313,000 in respect of pension schemes, £9,108,000 in respect of tax credits and loss carry
forwards and £807,000 of disallowed tax in respect of interest expenses.
174174
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
11. Earnings per share
Basic earnings per ordinary share
Basic earnings from continuing
operations
Adjustments (see Note 6)
Adjusted basic earnings from
continuing operations
Basic earnings from discontinuing
operations
Adjusted basic earnings from
discontinuing operations
Diluted earnings per ordinary share
Basic earnings from continuing
operations
Effect of dilutive potential ordinary
shares – share-based payment awards
Diluted earnings from continuing
operations
Adjustments (see Note 6)
Adjusted diluted earnings from
continuing operations
Basic diluted earnings from
discontinuing operations
Adjusted diluted earnings from
discontinuing operations
Year ended 30 November 2023
Year ended 30 November 2022
(Loss)/profit
for the year
£000
Weighted
average
number of
shares
'000
Pence per
share
p
(Loss)/profit
for the year
£000
Weighted
average
number of
shares
'000
Pence per
share
p
(43,308)
83,256
(52.0)
(16,089)
83,256
(19.3)
30,067
(13,241)
-
83,256
36.1
(15.9)
19,601
3,512
-
83,256
14,204
83,256
17.1
1,590
83,256
760
83,256
0.9
1,590
83,256
23.5
4.2
1.9
1.9
(43,308)
83,256
(52.0)
(16,089)
83,256
(19.3)
-
343
0.2
-
1,335
0.3
(43,308)
83,599
(51.8)
(16,089)
84,591
(19.0)
30,067
(13,241)
-
83,599
36.0
(15.8)
19,601
3,512
-
84,591
14,204
83,599
17.0
1,590
84,591
760
83,599
0.9
1,590
84,591
23.2
4.2
1.9
1.9
In accordance with IAS 33 the diluted loss per share is corrected on the face of the Income Statement to reflect the
undiluted figure as a loss should not be diluted.
12. Dividends
Amounts recognised as distributions to equity holders were:
Group and Company
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
Final dividend for the year ended 30 November 2022 – Nil p per share (2021: 3.0p)
-
2,498
The Directors do not propose a final dividend for the year ended 30 November 2023.
175175
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
13. Goodwill
Group
Cost
At 1 December 2021
Foreign exchange differences
At 30 November 2022
Foreign exchange differences
At 30 November 2023
Accumulated impairment
At 1 December 2021 and 30 November 2022
Impairment charge
At 30 November 2023
Carrying amount
At 30 November 2023
At 30 November 2022
£000
58,896
199
59,095
(288)
58,807
9,694
10,575
20,269
38,538
49,401
At 30 November 2022, the carrying amount of goodwill was allocated to RM Resources and RM Assessment as set out in
the table below.
The decision by management to separately monitor the results of the Consortium and TTS brands in June 2023 required
that goodwill previously monitored at the RM Resources CGU level was required to be allocated between Consortium and
TTS. This was performed on the basis of the relative values of the two businesses, determined using the relative material
profits of the two businesses from 1 June 2023 to 30 November 2023, excluding the second half of FY22, where trading
performance was most negatively impacted by the rollout of the Evolution programme. Material profit is defined as revenue
less material cost and less other margin factors such as customer rebates, supplier rebates and purchase price variance,
and carriage in costs. Goodwill allocated to RM Consortium was £10,575,000 and the remaining goodwill of £31,633,000
was allocated to RM TTS.
Following the announcement of the closure of the Consortium business, management performed an impairment review
which resulted in the goodwill allocated to RM Consortium of £10,575,000 being fully impaired.
The remaining carrying amount of goodwill is allocated to cash-generating units as follows:
Group
RM Resources
RM TTS
RM Assessment
Year ended
30 November
£000
2023
Pre-tax discount
rate
£000
N/A
31,633
6,905
N/A
14.2%
14.2%
Year ended
30 November
£000
2022
Pre-tax discount
rate
£000
42,208
N/A
7,193
13.2%
N/A
12.6%
Headroom
£000
N/A
811
54,138
Headroom
£000
16,400
N/A
65,400
Further information pertaining to the performance and future strategy of the Divisions can be found within the Strategic Report.
176176
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
13. Goodwill continued
The recoverable amounts of the Cash Generating Units (CGU) are determined from value in use calculations. The key
assumptions for the value in use calculations are those regarding the cash flows, the discount rates and the growth rates.
Historically the Group has taken cash flow forecasts derived from the most recent annual financial budget approved by the
Board, which also contains forecasts for the two years following, and extrapolates cash flows based on terminal rates which align
to market growth and inflation expectations. This approach continues to be used to test impairment of the RM Assessment CGU.
Given the performance of the Resources division in recent years, the Directors have reassessed the level of uncertainty
associated with the cashflow forecasts of TTS in the outer years of that budget. Whilst the company aims to achieve those
budgets, the most supportable (and therefore reliable) budget is that which has been prepared for the purpose of the going
concern review. For the purpose of the impairment test of the TTS CGU at 30 November 2023, a value in use has been derived
by taking the forecast for the year ended 30 November 2024, removing cashflows which do not comply with the requirements
of IAS36, and calculating a terminal value assuming the long-term growth rate and pre-tax discount rate set out below.
There is estimation uncertainty regarding the impact of climate change in the medium to long term. Based on the analysis
that has been undertaken to date, on pages 48 to 53 of this report, the impairment review assumes that the medium to
long term impact is not material to the cashflow forecasts or in contradiction to the long term growth rate applied.
The Group monitors its post-tax Weighted Average Cost of Capital and those of its competitors using market data. In
considering the discount rates applied to CGUs, the Directors have considered the relative sizes and risks of its CGUs and
their relatively narrow operation within the education products and services market. The impairment reviews use a discount
rate adjusted for pre-tax cash flows.
Year ended 30 November 2023
The table below shows key assumptions used in the value in use calculations for the year ended 30 November 2023:
Pre-tax discount rate
Long-term growth rate
RM TTS
14.2%
2.4%
RM Assessment
14.2%
2.4%
RM TTS
If the long term growth rate reduced by 0.18% (i.e. a long term growth rate of 2.22%) or if a pre-tax discount rate increased
by 0.2% (i.e. a pre-tax discount rate of 14.4%), the headroom would be eliminated. The FY24 cashflow assumption used in
the impairment model is £6m. A reduction of 1.6% would erode headroom.
Given the limited headroom the cashflows, long term growth rates and pre-tax discount rates represent key sources of
estimation uncertainty. A material impairment would be recorded if the long term growth rate reduced to 2.11%, the pre-tax
discount rate increased to 14.53%, or the cashflow forecasts reduced by 2.6%.
The cashflow forecast is also sensitive to costs incurred by the Group on behalf of TTS. The FY24 forecasts do not take into
consideration future potential efficiency savings in the group costs, as those plans were not enacted at 30 November 2023.
Central support costs currently allocated to TTS in the FY24 cashflow forecasts total £1.3m. If these costs increased by
£100,000, headroom would be eroded.
If the cash flows in RM TTS were to increase over three years inline with the three year budget headroom would increase to
£14.3m. If the cashflows in RM TTS were to reduce as set out within the reasonable worst-case scenario approved by the
Board for inclusion in the going concern review, headroom would be eroded and an impairment of £23.2m would be
required to be recorded. The impairment in a mitigated reasonable worst-case scenario would be £17.1m.
177177
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
13. Goodwill continued
RM Assessment
The sensitivity of the RM Assessment carrying values to reasonably possible changes in key assumptions, including the
reasonably possible downside risks applied as part of the going concern review, has been performed and would not cause
the carrying value to exceed its recoverable amount. No reasonably possible change in the pre-tax discount rate or long-
term growth rate would lead to an impairment and accordingly these sensitivities have not been provided.
Year ended 30 November 2022
The table below shows key assumptions used in the value in use calculations for the year ended 30 November 2022:
Pre-tax discount rate
Long-term growth rate
RM Resources
The key assumptions used within the cash flow forecasts included:
RM Resources
(combined)
13.2%
2.5%
RM Assessment
12.6%
2.5%
•• Price rises during the year ended 30 November 2023 ranging from 12% to 14% depending upon the brand;
•• Prices rise during the years ended 30 November 2024 and 2025 ranging from 0% to 3% depending on the brand; and
•• Volume changes during the three years ended 30 November 2025 ranging from a contraction of 8% to growth of 7%
dependent upon brand.
The weighted average annualised price increase over the three-year period and the assumed volume increases, along with
the change in assumption which, taken in isolation, would give rise to an impairment are set out below.
Assumption in forecasts
Assumption required for carrying value to equal recoverable amount
Annualised weighted
average price increase
Annualised weighted
average volume increase
6.2%
(1.6%)
1.4%
(5.5%)
If the cash flows in RM Resources were to reduce as set out within the reasonable worst-case scenario approved by the
Board for inclusion in the working capital and going concern testing, as disclosed in the Annual Report and Accounts for
the year ended 30 November 2022, plus a 10% reduction of cash flows in perpetuity, headroom would be eroded and an
immaterial impairment would be required to be recorded. If estimated cash flows were to reduce by 15% in every future
period an impairment of £1.1m would be required.
No reasonably possible change in the pre-tax discount rate or long-term growth rate would lead to an impairment and
accordingly this sensitivity has not been provided.
RM Assessment
The sensitivity of the RM Assessment goodwill carrying values to reasonably possible changes in key assumptions, including
the reasonably possible downside risks applied as part of the going concern review, has been performed and would not
cause the carrying value to exceed its recoverable amount. No reasonably possible change in long-term growth rates or
pre-tax discount rates would lead to an impairment and accordingly these sensitivities have not been provided.
178178
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
14. Other intangible assets
Customer
relationships
£000
Brands
£000
Intellectual
property &
database
assets
£000
Website
platform
£000
Group
Cost
At 1 December 2021
2,231
18,066
2,936
1,324
Additions
Transfers between categories
Foreign exchange differences
At 30 November 2022
Additions
Transfers between categories
Foreign exchange differences
Disposals
At 30 November 2023
-
-
121
2,352
-
-
(126)
(735)
1,491
Accumulated depreciation and impairment losses
At 1 December 2021
Charge for the year
Impairment
Foreign exchange differences
At 30 November 2022
Charge for the year
Transfer between categories
Impairment charge
Foreign exchange differences
Disposals
At 30 November 2023
Carrying amount
At 30 November 2023
At 30 November 2022
1,507
363
-
54
1,924
224
-
-
(63)
(735)
1,350
-
-
-
18,066
-
144
-
18,210
5,490
1,207
-
-
6,697
1,206
-
10,307
-
18,210
-
-
105
3,041
-
(144)
(146)
(215)
2,536
802
309
-
46
1,157
260
-
-
(73)
(215)
1,129
1,407
1,884
Other
software
assets
£000
14,179
3,627
22
5
Total
£000
38,736
3,627
22
231
-
-
-
1,324
17,833
42,616
-
-
-
(1,324)
457
(90)
(15)
(130)
-
18,055
3,526
240
2,235
4
6,005
996
(90)
7,482
(14)
-
14,379
1,323
-
-
-
1,323
-
-
-
-
(1,323)
-
-
1
457
(90)
(287)
(2,404)
40,292
12,648
2,119
2,235
104
17,106
2,686
(90)
17,789
(150)
(2,273)
35,068
141
428
-
11,369
3,676
11,828
5,224
25,510
Included within other software assets above is £0.5m (2022: £3.6m) of software developed to fulfil customer contracts and
£nil (2022: £5.4m) of assets under construction relating to non-commissioned internal software relating to IT transformation
programme. The total amortisation in year from internally generated intangibles amounts to £989,000 (2022: £174,000).
Following the announcement of the closure of the Consortium business and the subsequent termination of the ERP
replacement programme, management performed an impairment review resulting in the impairment of £10,307,000 of
Consortium brand intangible assets and £7,482,000 of associated software assets arising from the consequent termination
of the Group’s ERP programme (see Note 6). As a result, the carrying amount of other intangible assets in the RM
Consortium business at 30 November 2023 was £nil.
During the year ended 30 November 2022, the Group impaired elements of the ERP replacement programme costs,
previously capitalised within the RM Technology division, related to functionality that was paused and where the Group had
no active plans to proceed to implement (see Note 6).
179179
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
15. Property, plant and equipment
Group
Cost
At 1 December 2021
Additions
Transfers between categories
Foreign exchange differences
Disposals
At 30 November 2022
Additions
Transfers between categories
Foreign exchange differences
Disposals
At 30 November 2023
Accumulated depreciation
At 1 December 2021
Charge for the year
Transfers between categories
Foreign exchange differences
Disposals
At 30 November 2022
Charge for the year
Transfers between categories
Impairment charge
Foreign exchange differences
Disposals
At 30 November 2023
Carrying amount
At 30 November 2023
At 30 November 2022
Short
leasehold
improvements
£000
Plant, equipment
& fixtures
£000
Computer
equipment
£000
Vehicles
£000
5,086
564
5,947
17
-
11,614
19
(81)
(45)
(130)
11,377
4,026
322
-
12
-
4,360
665
2
501
(45)
(130)
5,353
6,024
7,254
18,314
845
(5,947)
25
(412)
12,825
572
13
(47)
(84)
13,279
4,805
870
22
16
(403)
5,310
1,348
(74)
5,380
(44)
(83)
9,196
69
-
32
(6)
9,291
168
57
(105)
(64)
9,347
7,568
598
-
20
(5)
8,181
428
79
-
(82)
(64)
11,837
8,542
1,442
7,515
805
1,110
206
97
-
2
(158)
147
19
16
(8)
(83)
91
186
30
-
2
(84)
134
7
(3)
-
(6)
(41)
91
-
13
Total
£000
32,802
1,575
-
76
(576)
33,877
778
5
(205)
(361)
34,094
16,585
1,820
22
50
(492)
17,985
2,448
4
5,881
(177)
(318)
25,823
8,271
15,892
Following the Group’s decision to close the RM Consortium business, the Group impaired the value of RM Consortium
assets by £5,881,000 (see Note 6). As a result, the carrying amount of property, plant and equipment in the RM Consortium
business at 30 November 2023 was £nil.
180180
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
16. Right-of-use assets
Group
Cost
At 1 December 2021
Additions
Disposals
At 30 November 2022
Additions
Remeasurements
Disposals
At 30 November 2023
Accumulated depreciation and impairment
At 1 December 2021
Charge for the year
Disposals
At 30 November 2022
Charge for the year
Remeasurements
Disposals
At 30 November 2023
Carrying amount
At 30 November 2023
At 30 November 2022
Land &
Buildings
£000
Plant &
Equipment
£000
Vehicles
£000
19,958
1,382
(1,127)
20,213
1,238
164
(186)
21,429
3,856
2,563
(1,059)
5,360
2,579
189
(104)
8,024
13,405
14,853
2,570
380
(570)
2,380
-
88
(406)
2,062
842
657
(572)
927
602
75
(406)
1,198
864
1,453
517
-
(263)
254
-
(7)
(96)
151
329
109
(242)
196
54
(9)
(96)
145
6
58
Total
£000
23,045
1,762
(1,960)
22,847
1,238
245
(688)
23,642
5,027
3,329
(1,873)
6,483
3,235
255
(606)
9,367
14,275
16,364
The most significant right-of-use asset is the Harrier Park warehouse of circa £13.4m cost and a net book value at 30
November 2023 of £10.7m (2022: £11.6m) which was used by RM Consortium and RM TTS. The warehouse will continue
to be used by RM TTS.
181181
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
17. Investments in subsidiary undertakings
The subsidiary undertakings of the Company at 30 November 2023 were:
Name
Principal activity
RM Education Limited
Software, services & systems
RM Educational Resources Limited
Resource supply
Country of
incorporation
England
England
RM Education Solutions India Pvt Limited1
Software and corporate services
India
RM Pension Scheme Trustee Limited
Corporate Trustee
RM PLC Australia Pty Limited
SONET Systems Pty Limited1
TTS Group Limited
Holding company
Software
Dormant
England
Australia
Australia
England
Class of share
% Held
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
1 Held through subsidiary undertaking
All UK subsidiary companies are registered at 142B Park Drive, Milton Park, Abingdon, Oxfordshire OX14 4SE.
RM Education Solutions India Pvt Limited is registered at Unit No.8A, Carnival Techno Park Technopark, Kariyavattom, PO
Trivandrum, Thiruvananthapuram, Kerala 695581, India.
RM PLC Australia Pty Limited is registered at 15 Gordon Street, Cremorne, VIC 3121, Australia.
SoNET Systems Pty Limited is registered at 179 Queen Street, Melbourne, Victoria, VIC 3000, Australia.
During the prior year, a newly incorporated, dormant and wholly-owned subsidiary, Schools Educational Software Limited,
was created to acquire the RM Integris and RM Finance businesses as part of the hive-down transaction prior to
completion. As set out in Note 21, on 31 May 2023 the Group completed the sale of the RM Integris and RM Finance
Businesses and related assets, which included Schools Educational Software Limited.
For all of the above subsidiaries, the registered address is also the principal place of business.
182182
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
17. Investments in subsidiary undertakings continued
The investment in subsidiary undertakings comprises:
Company
Cost
At 1 December 2021
Share-based payments
At 30 November 2022
Share-based payments
At 30 November 2023
Accumulated impairment
At 1 December 2021 and 30 November 2022
Impairment charge
At 30 November 2023
Carrying value
At 30 November 2023
At 30 November 2022
Investment in
share capital
£000
Capital contribution
share-based
payments
£000
112,470
-
112,470
-
112,470
-
68,153
68,153
44,317
112,470
13,960
40
14,000
(365)
13,635
-
-
-
13,635
14,000
Total
£000
126,430
40
126,470
(365)
126,105
-
68,153
68,153
57,952
126,470
At 30 November 2022, the carrying value of the Company's investments in RM Educational Resources Limited (comprising
the divisions of TTS and Consortium) and RM Education Limited (comprising the divisions of Assessment and Technology)
were £71.6m and £54.9m respectively. Due to operational and financial performance challenges, and following the
announcement of the closure of the Consortium business, management performed an impairment review of investments in
subsidiary undertakings which indicated that an impairment charge of £68.2m (2022: £nil) to the carrying value of the
Company’s investment in RM Educational Resources Limited was required.
The recoverable amounts of the investments in subsidiary undertakings are determined from value in use calculations. The value
in use calculations include payments for pensions contributions and subsidiary loan repayments. The key assumptions for the
value in use calculations are those regarding the cash flows, the discount rates and the growth rates. The Group prepares cash
flow forecasts derived from the most recent annual financial budget approved by the Board, which also contains forecasts for
the two years following, and extrapolates cash flows based on internal forecasts with terminal rates which align to market growth
and inflation expectations. The discount rates and growth rates are the same as used in the goodwill impairment review as set
out in Note 13. For the Company's investment in RM Educational Resources Limited, the value in use has been derived on the
same basis as the TTS CGU impairment review set out in note 13. The impairment review is sensitive to a change in key
assumptions used in the value in use calculations relating to the discount rate and future growth rates.
The investment carrying value for RM Educational Resources Limited is, as a result of the above impairment charge,
sensitive to any changes in cash flows. An additional £0.5m impairment charge or reversal would be caused by a 0.1%
movement in discount rate, 0.18% movement in annual growth rate, or 1.25% movement in cash inflows.
No reasonably possible change in assumptions would give rise to an impairment of the investment in RMED.
183183
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
18. Inventories
Group
Finished goods
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
13,959
26,359
Any inventory that is not expected to be turned over within 24 months has been provided for. Inventories are stated net of
writedowns of £1,111,000 (2022: £673,000).
Following the Group’s decision to cease trading in the RM Consortium business the Group had written down £2,826,000 of
inventory (see Note 6 item (a)).
19. Contract fulfilment assets
Group
At 1 December
Additions
Foreign exchange
Disposed in the period
Impaired in the period
Amortised in the period
At 30 November
Analysed by
Current
Non-current
At 30 November
2023
£000
3,440
2,981
(114)
(77)
-
(2,322)
3,908
1,949
1,959
3,908
2022
£000
2,847
2,808
111
-
(251)
(2,075)
3,440
1,727
1,713
3,440
Contract fulfilment assets represent investment in contracts which are recoverable and are expected to provide benefits
over the life of the contract.
184184
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
20. Trade and other receivables
Current assets
Financial assets
Trade receivables
Other receivables
Accrued income from customer contracts
Amounts owed by Group undertakings
Non-financial assets
Prepayments
Total current assets
Non-current assets
Financial assets
Amounts owed by Group undertakings1
Other receivables
Total non-current assets
Group
2023
£000
21,207
1,160
2,860
-
25,227
7,106
32,333
-
240
240
2022
£000
24,441
1,934
2,288
-
28,663
7,540
36,203
-
290
290
Total trade and other receivables
32,573
36,493
Currency profile of trade and other receivables
Pounds Sterling
US Dollar
Australian Dollar
Euro
Indian Rupee
Singapore Dollar
Other
28,389
2,404
200
135
574
130
741
31,699
2,985
439
130
768
297
175
Company
2023
£000
-
-
-
-
-
267
267
-
-
-
267
267
-
-
-
-
-
-
2022
£000
-
-
-
1
1
114
115
7,858
-
7,858
7,973
115
-
7,858
-
-
-
-
32,573
36,493
267
7,973
1. During the year ended 30 November 2023, the Company impaired the remaining amount owed by Group undertakings of £7,810,000 on the
basis that it was no longer recoverable and this impairment was recognised as a charge in the Company's Income Statement.
The amounts owed by Group undertakings to the Company were unsecured, repayable on demand and bore interest at
Sterling Overnight Index Average (SONIA) plus 2%, although they were repayable on demand the Directors had, at 30
November 2022, no expectation that the amounts would be collected in the next 12 months and were therefore presented
as non-current.
The Directors consider that the carrying amounts of trade and other receivables approximates their fair values.
The Group’s accrued income from customer contracts balances solely relate to revenue from contracts with customers.
Movements in the accrued income balances were driven by transactions entered into by the Group within the normal
course of business in the year.
185185
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
20. Trade and other receivables continued
Analysis of trade receivables and accrued income from customer contracts by type of customer
Group
Government
Commercial
At 30 November
2023
£000
13,254
10,813
24,067
2022
£000
17,589
9,140
26,729
Trade receivables included an allowance for expected credit loss at 30 November 2023 of £1,424,000 (2022: £1,859,000),
based on management’s knowledge of the customer base, the decision to cease trading the RM Consortium business,
externally available information and expected payment likelihood. New customers are subject to credit checks where
available, using third-party databases prior to being accepted. The Group applies the simplified approach and records
lifetime expected credit losses for trade receivables. Expected credit losses are measured using historical cash collection
data for periods of at least 12 months wherever possible and grouped into various customer segments based on product or
customer type. The historical loss rates are adjusted where macroeconomic factors, (for example changes in interest rates
or other commercial factors) are expected to have a significant impact when determining future expected credit loss rates.
The amounts presented in the balance sheet are net of allowances for expected credit losses. The expected credit loss
provision is calculated using a provision matrix, in which the provision increases as balances age. Trade receivables and
contract assets are written off when there to be no reasonable expectation of recovery and enforcement activity has
ceased.
Allowance for estimated credit losses
Group
At 1 December
Expected credit losses (unwound)/provided
Amounts written off in the year
2023
£000
1,859
(840)
405
1,424
No expected credit losses have been recognised on contract assets as these are not considered material.
Aging of customer contract balances
Group
Not past due
Overdue by less than 60 days
Overdue by between 60 and 90 days
Overdue by between 90 and 180 days
Overdue by more than 180 days
Customer
contracts
£000
15,190
7,682
828
951
840
2023
Allowance
£000
(239)
(1)
(88)
(329)
(767)
Net
£000
14,951
7,681
740
622
73
Customer
contracts
£000
16,609
7,046
1,495
2,064
1,374
2022
Allowance
£000
(107)
(353)
(221)
(515)
(663)
2022
£000
1,080
830
(51)
1,859
Net
£000
16,502
6,693
1,274
1,549
711
25,491
(1,424)
24,067
28,588
(1,859)
26,729
186186
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
20. Trade and other receivables continued
The following table shows the movements in trade receivables in the year:
Group
At 1 December
Amounts billed to customers in the period:
Net
Sales tax
Cash received
Movement in provision
Written off
Items reclassified as assets and liabilities held for sale (Note 21)
At 30 November
2023
£000
2022 (Represented)
£000
24,441
21,792
194,969
30,510
(228,278)
(840)
405
-
21,207
218,903
37,353
(252,604)
(780)
(51)
(172)
24,441
The following table shows the movements in customer contract balances and the performance obligations satisfied in the year:
Group
At 1 December 2021
Amounts subsequently billed to customers in the period
Accrued
income
(Represented)
£000
Deferred
income
(Represented)
£000
2,463
(2,463)
(17,621)
-
Performance obligations satisfied (invoiced and deferred in prior periods)
-
14,352
Revenue recognised but not invoiced in the period
2,420
-
Total
customer
contract
balance
(Represented)
£000
(15,158)
(2,463)
14,352
2,420
(13,287)
(13,287)
Amounts billed to customers for which revenue will be recognised
in later periods
New contract fulfilment costs incurred
New contract fulfilment assets amortised in line with performance
obligations satisfied
Impairment of contract asset
Written off
Impact of foreign exchange
-
-
-
-
-
-
Items reclassified as assets and liabilities held for sale (Note 21)
At 30 November 2022
Amounts subsequently billed to customers in the period
(132)
2,288
(2,288)
-
-
-
6
(28)
1,954
(14,624)
-
Performance obligations satisfied (invoiced and deferred in prior periods)
-
11,163
Revenue recognised but not invoiced in the period
2,860
-
Amounts billed to customers for which revenue will be recognised
in later periods
New contract fulfilment costs incurred
New contract fulfilment assets amortised in line with performance
obligations satisfied
Disposal of contract asset
Written off
Impact of foreign exchange
At 30 November 2023
-
-
-
-
-
-
(11,450)
(11,450)
-
-
-
108
48
-
-
-
108
48
2,860
(14,755)
(11,895)
-
-
-
6
(28)
1,822
(12,336)
(2,288)
11,163
2,860
Contract
fulfilment
asset
(Represented)
£000
2,847
-
-
-
-
2,808
(2,075)
(251)
-
111
-
3,440
-
-
-
-
2,981
(2,322)
(77)
-
(114)
3,908
187187
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
20. Trade and other receivables continued
The above tables have been represented in order to provide a clearer presentation of the movement analysis for brought
forward trade receivables, accrued income, deferred revenue, and contract fulfilment assets.
Customer contract invoices are raised on the following basis:
•• For point-in-time revenue streams – invoicing raised on delivery of performance obligations.
•• For over-time revenue streams in RM Technology – the majority of contract invoicing is either in advance (monthly,
quarterly, or annually) or quarterly in arrears.
•• For over-time revenue streams in RM Assessment – invoicing varies contract to contract and between performance
obligations and can be materially different to the satisfaction of the related performance obligations in timing.
21. Discontinuing operations and assets held for sale
Discontinued operations
On 31 May 2023, the Group completed the sale of the RM Integris and RM Finance Businesses and related assets, to The
Key Support Services Limited. Total consideration for the sale was £16.0 million on a cash free/debt free basis of which
£12.0 million was received on completion subject to at £3.3m normalised working capital adjustment and £4.0m receivable
subject to satisfaction of certain conditions, including those related to competition clearance in cash, of which £3.5m was
received in June 2023 and £0.5m was received in July 2023. A transitional services agreement was put in place with
Schools Educational Software Limited (see Note 17) following the sale.
Income statement analysis of discontinued operations
Revenue
Cost of sales
Gross profit
Operating expenses
Profit before tax
Tax
Profit for the year from discontinued operations
Gain on disposal of discontinued operations
Gain on disposal of discontinued operations before taxation
Costs associated with the disposal
Net gain on disposal of discontinued operations
Profit for the year from discontinued operations
Profit for the year from discontinued operations
Net gain on disposal of discontinued operations
Net gain on disposal of discontinued operations
188188
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
2,410
(988)
1,422
(662)
760
-
760
4,871
(1,894)
2,977
(1,387)
1,590
-
1,590
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
15,330
(1,886)
13,444
-
-
-
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
760
13,444
14,204
1,590
-
1,590
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
21. Discontinuing operations and assets held for sale continued
Total comprehensive income for the financial year from discontinued operations
Group
Attributable to owners of the parent
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
14,204
1,590
Cash flows from discontinued operations
During the year, RM Integris and RM Finance contributed £1,633,000 (2022: £1,533,000) to the Group’s net operating cash
flows, paid £nil (2022: £nil) in respect of investing activities and paid £nil (2022: £nil) in respect of financing activities. As the
sale to Schools Educational Software Limited was an asset sale, cash and corporation tax balances related to the business
were retained within the Group. Included in the sale agreement were Group owned intellectual properties and the related
assets. These assets are fully amortised and depreciated.
The net gain on disposal of discontinued operations represents the net cash proceeds of £12,672,000, plus net liabilities
disposed of £2,658,000 and less costs associated with the disposal of £1,886,000.
Assets and liabilities held for sale
Details of RM Integris and RM Finance Business assets and liabilities classified as held for sale in the prior year were as
follows:
Group
Assets:
Trade receivables
Prepayments
Accrued income
Assets classified as held for sale
Liabilities:
Trade payables
Other taxation and social security
Other payables
Deferred income
Liabilities directly associated with assets classified as held for sale
At
30 November 2023
£000
At
30 November 2022
£000
-
-
-
-
-
-
-
-
-
172
114
132
418
(65)
(32)
(31)
(1,954)
(2,082)
189189
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
22. Trade and other payables
Current liabilities
Financial liabilities
Trade payables
Lease liabilities
Other payables
Derivative financial instruments
Accruals
Amounts owed to Group undertakings
Non-financial liabilities
Other taxation and social security
Deferred income from customer contracts
Non-current liabilities
Financial liabilities
Lease liabilities
– due after one year but within two years
– due after two years but within five years
– after five years
Non-financial liabilities
Deferred income from customer contracts
– due after one year but within two years
– due after two years but within five years
– after five years
Group
2023
£000
16,441
2,194
2,757
278
7,708
-
29,378
4,702
12,292
46,372
1,819
4,107
8,371
1,027
1,436
-
16,760
63,132
2022
£000
34,269
3,144
2,721
272
10,516
-
50,922
3,149
11,568
65,639
2,062
4,366
9,570
1,357
1,473
266
19,094
84,733
Company
2023
£000
-
-
-
-
214
30,913
31,127
-
-
2022
£000
-
-
-
-
93
27,297
27,390
-
-
31,127
27,390
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31,127
27,390
The amounts owed to Group undertakings by the Company are unsecured, payable on demand and bear interest at SONIA
plus 2%. The Group’s deferred revenue balances solely relate to revenue from contracts with customers. Movements in the
deferred revenue balances were driven by transactions entered into by the Group within the normal course of business in
the year.
Group
2023
£000
55,939
4,234
567
798
1,594
63,132
2022
£000
76,865
2,429
1,219
2,750
1,470
84,733
Company
2023
£000
31,127
-
-
-
-
2022
£000
27,390
-
-
-
-
31,127
27,390
Pound Sterling
US Dollar
Australian Dollar
Indian Rupee
Other
190190
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
23. Borrowings
Group and Company
Bank loan
Less capitalised fees
Borrowings
2023
£000
55,000
(1,349)
53,651
2022
£000
49,000
(272)
48,728
The borrowings in the year and details of the facility are detailed in Note 31.
At 30 November 2023, the Group had drawn down £55.0m (2022: £49.0m) of the facility.
Bank and professional service fees relating to securing the loan have been capitalised and are amortised over the length of
the loan of which £141,000 (2022: £138,000) relates to the unamortised original facility agreement and £1,208,000 is the
unamortised arrangement fee relating to the extension during the current year (2022: £134,000).
In March 2023, the Group secured an agreement with lenders to extend the existing £70.0m facility to 5 July 2025, subject
to the addition of a further ‘hard’ liquidity covenant test requiring the Group to have liquidity greater than £7.5m on the last
business day of the month, and liquidity not be below £7.5m at the end of two consecutive weeks within a month.
In April 2023, the Group agreed with the Trustee of the RM and CARE Schemes to provide the Schemes with a second
ranking fixed and floating charge over the shares of all obligor companies (except for RM plc) and a payment of £0.5m each
at bi-annual intervals starting on August 2023 which is contingent upon the adjusted debt leverage ratio being lower than
3.2x at that date. The definition of adjusted leverage is aligned to the banking facility as set out below. No such payment
was made during the year ended 30 November 2023. See Note 26 for further details.
The business operated within its existing financial covenants for the first half of 2023 but indicated in its interim financial
statements that a breach was expected for the facility’s LTM EBITDA covenant from the third quarter of the year ended 30
November 2023. EBITDA waivers were granted by lenders for the August and November 2023 periods and the Group
continues to comply with the conditions of each lender with regards to any waivers and the respective facility agreement.
At the end of November 2023 the minimum EBITDA covenant required was £8.6m versus EBITDA of £7.2m. In addition,
during November 2023, the soft liquidity covenant limit on forecasted liquidity was exceeded for the first time, resulting in a
meeting held with lenders under the terms of the facility.
191191
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
23. Borrowings continued
Since the year end, the Group has secured an agreement with Lenders, which extends the existing £70.0m facility to July
2026. This agreement is secured against the shares of each of the obligors (other than RM plc) and by way of a fixed and
floating charge over all assets of the obligors, and has reset the covenants under the facility as follows:
•• A quarterly LTM EBITDA (excluding discontinued operations) covenant test from February 2024 to November 2025,
which is then replaced by a quarterly EBITDA leverage test and interest cover, which are required to be below and above
4x respectively from February 2026; and
•• A ‘hard’ liquidity covenant test requiring the Group to have liquidity greater than £7.5m on the last business day of the
month, and liquidity not be below £7.5m at the end of two consecutive weeks within a month, with a step-down period
applying from 15 September 2024 to 24 October 2024 and 1 January 2025 to 21 March 2025, during which the
minimum liquidity requirement is reduced from £7.5m to £5.0m.
Changes in liabilities arising from financing activities
Group
Bank loan
Less capitalised fees
Total liabilities from financing activities
Group
Bank loan
Less capitalised fees
Total liabilities from financing activities
24. Provisions
Group
At 1 December 2021
Increase in provisions
Utilisation of provisions
Release of provisions
At 30 November 2022
Increase in provisions
Utilisation of provisions
Reclassification of provision1
Release of provisions
Unwinding of discount on provisions
Foreign exchange
At 30 November 2023
At 1
December
2022
£000
49,000
(272)
48,728
At 1
December
2021
£000
20,000
(256)
19,744
Financing
cash flows
£000
6,000
(1,716)
4,284
Financing
cash flows
£000
26,774
(175)
26,599
At 30
November
2023
£000
55,000
(1,349)
53,651
At 30
November
2022
£000
49,000
(272)
48,728
Other
£000
-
639
639
Other
£000
2,226
159
2,385
Dilapidations
£000
Employee-related
restructuring
£000
Contract risk
provisions
£000
1,450
219
(239)
(159)
1,271
978
(27)
-
(18)
89
(1)
2,292
916
254
(960)
-
210
2,322
(1,716)
-
-
-
-
816
1,175
1,227
(317)
(758)
1,327
1,498
(1,160)
(30)
-
-
(1)
1,634
Total
£000
3,541
1,700
(1,516)
(917)
2,808
4,798
(2,903)
(30)
(18)
89
(2)
4,742
1. Contract risk provisions at 1 December 2021 and 30 November 2022 include TUPE unfunded pension related balances of £719,000 and £30,000
respectively, with the movements recognised in Other Comprehensive Income. As set out in Note 26(a), these balances were transferred to
defined benefit pension scheme obligations during the year ended 30 November 2023 as they are estimated on an IAS 19 basis.
192192
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
24. Provisions continued
Dilapidations provisions, which result in the recognition of corresponding right-of-use assets, increased by £1.0m (2022:
reduction of £0.2m) during the year following the reassessment of dilapidations provisions across the Group’s real estate
portfolio. Of the £2.3m total dilapidations provisions at 30 November 2023, £1.0m is expected to be utilised in 2024, £0.9m in
2025 and the remainder in 2035. In the prior year, the exit of a lease in accordance with the 2018 estates strategy (see Note 6),
resulted in the utilisation and release of provisions noted above. Settlement discussions with landlords are ongoing and the
outcome of these could result in an increase or decrease in the dilapidations provision by approximately £0.3m, which would
then be fully recognised in the income statement.
Employee-related restructuring provisions refer to costs arising from restructuring to meet the future needs of the Group.
As set out in Note 6, following the Group’s decision to close the RM Consortium business as well as the continuation of the
Group’s 2022 transformation programme during 2023, restructuring provisions of £2.3m were recognised during the year
ended 30 November 2023, of which £1.7m had been utilised by the year end. In the prior year, the Group completed the sale
of warehouses planned in the 2018 estates review and therefore utilised the provision held in 2021 as well as commencing
further restructuring of £0.3m as part of the Group’s 2022 transformation programme (see Note 6). All of these restructuring
activities are expected to be completed during 2024.
Contract risk provisions includes items not covered by any other category of which the majority relates to provisions for onerous
IT licence contracts, which increased by £1.5m during the year following the Group’s decision to cease trading in the RM
Consortium business. In the prior year, the provision increased by £1.2m as a result of an onerous contract provision associated
with the Group’s warehouse strategy, the majority of which was utilised during the year ended 30 November 2023.
Disclosure of provisions
Group
Current liabilities
Non-current liabilities
2023
£000
2,993
1,749
4,742
2022
£000
2,142
666
2,808
The non-current liabilities include dilapidations provisions of £1.2m (2022: £0.6m) which are anticipated to be paid over
2-12 years, with the remaining non-current provisions relating to certain contract risk provisions.
25. Share capital
Group and Company
Ordinary shares of 22/7p
Number ‘000
Authorised, allotted, called-up and fully paid:
At 1 December 2021, 30 November 2022 and 30 November 2023
83,875
The valuation of the shares is weighted average cost. Ordinary shares issued carry no right to fixed income.
£000
1,917
193193
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
26. Pension schemes
a. Defined contribution schemes
The Group operates or contributes to a number of defined contribution schemes for the benefit of qualifying employees.
The assets of these schemes are held separately from those of the Company. The total cost charged to income of
£2,427,000 (2022: £2,047,000) represents contributions payable to these schemes by the Group at rates specified in
employment contracts. At 30 November 2023 £334,000 (2022: £262,000) due in respect of the current financial year had
not been paid over to the schemes.
b. Local Government Pension Schemes
The Group has TUPE employees who retain membership of Local Government Pension Schemes, many of which have a
customer contractual guarantee whereby the Group reimburses for any IAS 19 deficit when it ceases to be a participating
employer and are therefore accounted for as a defined benefit arrangement, with actuarial movements recognised through
Other Comprehensive Income. As a participant in a multi-employer defined benefit pension scheme, the Group estimates
the position on an IAS 19 basis by using the most recent triennial valuation but with appropriate and up-to-date actuarial
inputs (such as discount rate, CPI/RPI movements), internal information (such as employee related data) but not IAS 19
inputs such as scheme asset and liability movements, mortality assumptions that relate to participating employees. The
Group is not the main sponsoring employer in these schemes and therefore does not have an unconditional right to
recover surpluses, either during the life of the scheme, when all the members have left the plan or on a plan wind-up.
Similarly, the Group is not liable for other entities’ obligations in these schemes.
The Group makes payments to these schemes for current service costs in accordance with its contractual obligations. The
amount due in respect of these schemes at 30 November 2022 was £62,000 (2022: £40,000). The amounts recognised in
the Income Statement and in the Statement of Comprehensive Income in respect of the Local Government Pension
Schemes are set out below:
Group
Current service cost
Expense recognised in the Income Statement
Release of Local Government Pension Scheme provisions
Income recognised in the Statement of Comprehensive Income
(Expense)/income recognised in Total Comprehensive Income
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
(69)
(69)
-
-
(69)
(180)
(180)
689
689
509
At 30 November 2023, the defined benefit pension scheme obligations liability incorporated information from 23 Local
Government Pension Schemes based on the most recent triennial valuations performed as at 31 March 2023 and, based on
the assumptions above, led to a calculation of an unfunded liability position as set out below:
Group
Obligations (unfunded)
At 1 December
Actuarial gains/(losses)
At 30 November
Year ended
30 November 2023
£000
Year ended
30 November 20221
£000
(30)
-
(30)
(719)
689
(30)
1. The unfunded liability position for the year ended 30 November 2022 was previously included in provisions (see Note 24 for details) but was
transferred to defined benefit pension scheme obligations during the year ended 30 November 2023 as it is estimated on an IAS 19 basis.
194194
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
26. Pension schemes continued
c. Defined benefit pension schemes
As described in Note 2, the Group has both defined benefit and defined contribution pension schemes. There are three
defined benefit pension schemes.
The Research Machines plc 1988 Pension Scheme (RM Scheme)
The Scheme provides benefits to qualifying employees and former employees of RM Education Limited but was closed to
new members with effect from 1 January 2003 and closed to future accrual of benefits from 31 October 2012. The assets
of the Scheme are held separately from RM Education Limited’s assets in a trustee-administered fund. The Trustee is a
limited company. Directors of the Trustee company are appointed by RM Education Limited and by members. The Scheme
is a funded scheme.
Under the Scheme, employees were entitled to retirement benefits of 1/60th of final salary for each qualifying year on
attainment of retirement age of 60 or 65 years and additional benefits based on the value of individual accounts. No other
post-retirement benefits were provided by the Scheme.
The most recent actuarial valuation of Scheme assets and the present value of the defined benefit obligation was carried
out for statutory funding purposes at 31 May 2021 by a qualified independent actuary. IAS 19 Employee Benefits (revised)
liabilities at 30 November 2023 have been rolled forward based on this valuation’s base data.
As at 31 May 2021, the triennial valuation for statutory funding purposes showed a deficit of £15,386,000. The Group agreed
with the Scheme Trustees that it will repay this amount via deficit catch-up payments of £3,200,000 per annum until 31
December 2024. The next triennial valuation will be due as at 31 May 2024. At 30 November 2023 there was an amounts
outstanding of £266,667 (2022: £266,667) representing one month’s deficit payment.
The Company has entered into a pension protection fund compliant guarantee in respect of scheme liabilities. No liability has
been recognised for this within the Company as the Directors consider that the likelihood of it being called upon is remote.
The Consortium CARE Scheme (CARE Scheme)
Until 31 December 2005, The Consortium for Purchasing and Distribution Limited (The Consortium, acquired by the
Company on 30 June 2017 and now RM Educational Resources Limited) operated a pension scheme (the Consortium
CARE scheme) providing benefits on both a defined benefit (final salary-linked) and a defined contribution basis. From 1
January 2006, the defined benefit (final salary-linked) and defined contribution sections were closed and all employees,
subject to the eligibility conditions set out in the Trust Deed and Rules, joined a new defined benefit (Career Average
Revalued Earnings) section. From 28 February 2011 the scheme was closed to future accruals.
195195
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
26. Pension schemes continued
The most recent actuarial valuation of Scheme assets and the present value of the defined benefit obligation was carried
out for statutory funding purposes at 31 May 2021 by a qualified independent actuary. IAS 19 Employee Benefits (revised)
liabilities at 30 November 2023 have been rolled forward based on this valuation’s base data.
As at 31 May 2021, the triennial valuation for statutory funding purposes showed a deficit of £6,240,000. The Group agreed
with the Scheme Trustees that it will repay this amount via deficit catch-up payments of £1,200,000 per annum until 31
December 2026. The next triennial valuation will be due as at 31 May 2024. At 30 November 2023 there was an amount
outstanding of £100,000 (2022: £100,000) representing one month’s deficit payment.
Prudential Platinum Pension (Platinum Scheme)
The Consortium acquired West Mercia Supplies in April 2012 (prior to the Company acquiring The Consortium). Upon
acquisition by The Consortium of West Mercia Supplies, a pension scheme (the Platinum scheme) was set up providing
benefits on both a defined benefit (final salary-linked) and a defined contribution basis for West Mercia employees. The most
recent full actuarial valuation was carried out by the independent actuaries XPS Pensions Group on 31 December 2021. The
scheme is administered within a legally separate trust from The Consortium and the Trustees are responsible for ensuring
that the correct benefits are paid, that the scheme is appropriately funded and that the scheme assets are appropriately
invested. The triennial valuation of the Scheme for statutory funding purposes at 31 December 2021 was a surplus of £71,800.
Amounts recognised in the Income Statement and in the Statement of Comprehensive Income
Group
Administrative expenses and taxes
Operating expense
Interest cost
Interest on scheme assets
Net interest income
Income recognised in the Income Statement
Effect of changes in demographic assumptions
Effect of changes in financial assumptions
Effect of experience adjustments
Total actuarial gains
Return on scheme assets excluding interest on scheme assets
Expense recognised in the Statement of Comprehensive Income
Expense recognised in Total Comprehensive Income
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
Note
8, 9
(6)
(6)
(8,269)
9,360
1,091
1,085
3,400
23,820
(6,152)
21,068
(36,839)
(15,771)
(14,686)
(7)
(7)
(5,326)
5,894
568
561
2,053
135,098
(20,544)
116,607
(129,453)
(12,846)
(12,285)
The effect of changes in financial assumptions is principally due to the increase in the discount rates – see sensitivity
information further below. The discount rates have increased as a result of an increase in corporate bond yields over the
period, which have led to a lower value being placed on the Schemes’ liabilities. This has been more than offset by falls in
asset values reflecting low returns on growth assets such as equities, as well as returns on Liability Driven Investment (LDI)
holdings which are designed to move in the same way as liabilities following changes to interest rates and market-implied
inflation – see LDI information below.
196196
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
26. Pension schemes continued
Reconciliation of the scheme assets and obligations through the year
Assets
At 1 December 2021
Interest on scheme assets
Return on scheme assets, excluding interest on scheme assets
Administrative expenses
Contributions from Group
Benefits paid
At 30 November 2022
Interest on scheme assets
Return on scheme assets, excluding interest on scheme assets
Administrative expenses
Contributions from Group
Benefits paid
At 30 November 2023
Obligations
At 1 December 2021
Interest cost
Actuarial gains/(losses)
Benefits paid
At 30 November 2022
Interest cost
Actuarial gains/(losses)
Benefits paid
At 30 November 2023
Net pension surplus/(deficit)
At 30 November 2023
Pension deficit
Pension surplus
Net pension surplus/(deficit)
At 30 November 2022
Pension deficit
Pension surplus
Net pension surplus/(deficit)
RM Scheme
£000
CARE
Scheme
£000
Platinum
Scheme
£000
Total
£000
316,722
5,524
(123,023)
-
3,452
(5,331)
197,344
8,670
(34,841)
-
3,200
(3,827)
170,546
(282,178)
(4,892)
107,713
5,331
(174,026)
(7,574)
19,386
3,827
(158,387)
-
12,159
12,159
-
23,318
23,318
17,858
316
(5,335)
20
1,059
(625)
13,293
602
(1,721)
-
1,216
(725)
12,665
(22,544)
(389)
7,661
625
(14,647)
(636)
1,512
725
(13,046)
(381)
-
(381)
(1,354)
-
(1,354)
3,061
54
(1,095)
(27)
26
(14)
2,005
88
(277)
(6)
80
(16)
1,874
(2,568)
(45)
1,235
14
(1,364)
(59)
170
16
(1,237)
-
637
637
-
641
641
337,641
5,894
(129,453)
(7)
4,537
(5,970)
212,642
9,360
(36,839)
(6)
4,496
(4,568)
185,085
(307,290)
(5,326)
116,609
5,970
(190,037)
(8,269)
21,068
4,568
(172,670)
(381)
12,796
12,415
(1,354)
23,959
22,605
Included within the CARE Scheme obligations is an unfunded liability of £88,000 (2022: £98,000) which is a liability of the
Group and not the Scheme.
197197
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
26. Pension schemes continued
Reconciliation of net defined benefit obligation
Group
Net surplus/(obligation) at the start of the year
Cost included in Income Statement
Scheme remeasurements included in the Statement of Comprehensive Income
Cash contribution
Net pension surplus
Obligation by participant status
Group
Vested deferreds
Retirees
Value of scheme assets
Group
Cash and cash equivalents, including escrow
Equity instruments
Equity instruments – pooled investment vehicle
Debt instruments
Liability driven investments
Liability driven investments
Insurance contract
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
22,605
1,085
(15,771)
4,496
12,415
30,351
561
(12,845)
4,538
22,605
At
30 November 2023
£000
At
30 November 2022
£000
133,122
39,548
172,670
145,134
44,903
190,037
Fair value hierarchy
At
30 November 2023
£000
At
30 November 2022
£000
Level 1
Level 2
Level 3
Level 2
Level 1
Level 2
Level 3
20,920
16,796
51,729
1,874
-
76,556
17,210
185,085
6,691
18,459
73,447
2,005
79,476
13,270
19,294
212,642
Liability driven investments (LDI)
The RM Scheme and the CARE Scheme assets include an LDI portfolio totalling £76.6m at 30 November 2023 (2022:
£92.7m). The portfolio is valued at market value as no bid valuation is available. The components of the LDI portfolio are
determined by the Trustee’s investment advisor with the aim to provide a good match to the Scheme’s exposure to interest
rate and inflation risks within the value of its liabilities.
Liability driven investments are expected to move broadly in line with the rise and fall in liability values, thus providing a
degree of protection to the Scheme’s funding position.
The Trustees continue to work closely with their investment advisers to regularly rebalance the portfolio in order to
maintain a healthy level of collateral backing for the LDI portfolio in light of changes to interest rates and inflation and work
to maintain the overall asset allocations broadly in line with the long-term return target. The Trustees are also closely
monitoring the Scheme’s funding position in light of the recent market volatility.
198198
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
26. Pension schemes continued
Insurance assets
The RM Scheme also holds insurance policies covering benefits for some pensions in payment. The value of these
annuities is £17.2m at 30 November 2023 (2022: £19.3m). This value has been calculated using the same assumptions as
used to value the liabilities. The method of determining the value of the insurance annuities is determined by projecting the
expected benefit payments using the agreed assumptions and then discounting the resulting cash flows back to 30
November 2023.
Significant actuarial assumptions
Group
Discount rate (RM Scheme)
Discount rate (CARE Scheme)
Discount rate (Platinum Scheme)
Rate of RPI price inflation (RM Scheme)
Rate of RPI price inflation (CARE Scheme)
Rate of RPI price inflation (Platinum Scheme)
Rate of CPI price inflation – period before 1 January 2030
Rate of CPI price inflation – period after 1 January 2030
Rate of salary increases (Platinum Scheme)
Rate of pensions increases pre-6 April 1997 service
pre-1 June 2005 service
post-31 May 2005 service
Post-retirement mortality table
Year ended
30 November 2023
Year ended
30 November 2022
5.15%
5.15%
5.10%
3.10%
3.15%
3.10%
2.10%
3.10%
N/A
1.50%
2.90%
1.95%
4.40%
4.45%
4.35%
3.05%
3.10%
3.00%
2.05%
3.05%
N/A
1.50%
2.90%
1.95%
S3PA CMI 2022 1.00%
2020 and 2021 weight
parameters of 10%,
2022 of 35%
S3PA CMI 2021 1.25%
2020 and 2021 weight
parameters of 10%
Weighted average duration of defined benefit obligation
16 years
18 years
Assumed life expectancy on retirement at age 65:
Retiring at the accounting date (male member aged 65)
Retiring 20 years after the accounting date (male member aged 45)
21.0
21.9
21.6
22.8
Expected cash flows
Group
Expected employer contributions for the following year ended
30 November
Expected total benefit payments
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
4,400
4,450
Year 1
Year 2
Year 3
Year 4
Year 5
Years 6 to 10
4,661
4,926
5,224
5,762
6,299
37,603
4,316
4,534
4,791
5,142
5,682
34,679
199199
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
26. Pension schemes continued
During the year ended 30 November 2023, the Group has agreed with the Trustee of the RM and CARE Schemes to
provide the Schemes with a second ranking fixed and floating charge over the shares of all obligor companies (except for
RM plc) and a payment of £0.5m each at bi-annual intervals starting on August 2023 which is contingent upon the adjusted
debt leverage ratio being less than 3.2x at that date. The definition of adjusted leverage is aligned to the banking facility as
set out in Note 23. No such payment was made during the year ended 30 November 2023.
Key risks
The schemes expose the Group to a number of risks:
•• Investment risk: The scheme holds investments in asset classes, such as equities, which have volatile market values and,
while these assets are expected to provide real returns over the long term, the short-term volatility can cause additional
funding to be required if a deficit emerges.
•• Interest rate risk: The scheme’s liabilities are assessed using market yields on high quality corporate bonds to discount
the liabilities. As the scheme holds assets such as equities and diversified growth funds the value of the assets and
liabilities may not move in the same way.
•• Inflation risk: A significant proportion of the benefits under the scheme are linked to inflation. Although the scheme’s
assets are expected to provide a good hedge against inflation over the long term, movements over the short term could
lead to deficits emerging.
•• Mortality risk: In the event that members live longer than assumed a deficit will emerge in the scheme.
Sensitivities to assumptions – one item changed with all others held constant
At 30 November 2023
Group
Analysis of net balance sheet position
Fair value of scheme assets
Present value of scheme obligations
Net pension surplus
Actuarial assumptions
Discount rate (RM Scheme)
Discount rate (CARE Scheme)
Discount rate (Platinum Scheme)
Rate of RPI
Rate of CPI
Mortality table
Base
£000
Discount rate
-0.1%
£000
Discount rate
+0.1%
£000
185.1
(172.7)
12.4
5.15%
5.15%
5.10%
3.10%
2.10%
185.2
(175.5)
9.7
5.05%
5.05%
5.00%
3.10%
2.10%
184.9
(169.9)
15.0
5.25%
5.25%
5.20%
3.10%
2.10%
RPI
-0.1%
£000
185.0
(170.4)
14.6
5.15%
5.15%
5.10%
3.00%
2.00%
RPI
+0.1%
£000
185.2
(175.0)
10.2
5.05%
5.05%
5.00%
3.20%
2.20%
Life
+1 year
£000
185.8
(177.6)
8.2
5.15%
5.15%
5.10%
3.10%
2.10%
S3PA CMI 2022 1.00%
+1 year
The significant actuarial assumptions are the discount rate applied to pension liabilities together with RPI/CPI and mortality
as shown in the above table. Note that every 0.1% movement in discount rate has a £2.7m impact on the net surplus, a 0.1%
movement in RPI has a £2.2m impact and a one-year average life extension has a £4.2m impact.
200200
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
27. Own shares
The RM plc Employee Share Trust (EST) was established in March 2003 to hedge the future obligations of the Group in
respect of shares awarded under the RM plc Co-Investment Plan, RM plc Performance Share Plan and Deferred Bonus Plan.
The EST has waived any entitlement to the receipt of normal dividends in respect of all of its holding of the Company’s
ordinary shares. The EST’s waiver of dividends may be revoked or varied at any time.
Group and Company
At 1 December 2021, 30 November 2022 and 30 November 2023
The valuation of the shares is weighted average cost.
The maximum number of own shares held in the year was 618,796 (2022: 618,796).
Ordinary shares of 22/7p
Number ‘000
619
£000
444
28. Share-based payments
The Group operates the following executive and employee equity-settled share-based payment scheme known as the RM
plc Performance Share Plan 2019 (the PSP Scheme).
During the year ended 30 November 2023, three (2022: two) awards were made under the PSP Scheme. The fair values of
awards made under this Scheme have been assessed using Black-Scholes and Monte-Carlo models, as appropriate to the
scheme, at the date of grant. The fair values of awards are expensed over the period between grant and vesting. The weighted
average fair value of the award made during the year was £0.489 (2022: £0.762) per share and key assumptions include risk
free rate of 3.53% (2022: 0.12%), dividend yield of nil (2022: 1.36%) and volatility of Company share price of 79% (2022: 47%).
Share-based payment awards exercised in the period and disclosed in the statement of changes in equity represents the
impact on retained earnings of releasing the fair value charge accrued under IFRS 2 Share-based payment, which for
deferred bonus scheme is partially matched by the release of own shares held.
RM plc Performance Share Plan 2019 (PSP Scheme)
The Group uses the PSP Scheme for the remuneration of senior executives and senior management. Details of Directors’
awards are contained within the Remuneration Report. Participation has been subject to various vesting conditions, including
EPS, total shareholder return (TSR) and share price conditions. The awards issued in 2023 and 2022 do not include an EPS
vesting condition. If the participants leave the Group’s employment, in most circumstances the award lapses.
Details of performance share plan shares, all of which are nil cost options, are as follows:
Group
At 1 December 2021
Granted during the year
Lapsed during the year
At 30 November 2022
Granted during the year
Lapsed during the year
At 30 November 2023
Ordinary
share options
Market price
on grant
1,636,000
1,312,248
(1,211,000)
1,737,248
2,346,640
(1,616,500)
2,467,388
£1.33
£0.72
The plans outstanding at 30 November 2023, which were all nil cost options or share awards, had a weighted average
contractual life of 2.1 years (2022: 1.7 years).
201201
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
28. Share-based payments continued
The compensation cost included in the consolidated income statement in respect of performance share plan shares was a
credit of £364,000 (2022: charge of £40,000) which comprises equity-settled transactions.
Where total shareholder return (TSR) is used as a performance condition, comparator company volatility is assessed using
annualised, daily historic TSR growth assessed over a period prior to the date of grant that corresponds to the performance
period of three years. The company correlation uses historic pairwise correlations of the companies over a three-year period.
The fair value of the TSR element is based on a large number of stochastic projections of Company and comparator TSR.
Where earnings per share (EPS) is used as a performance condition, the EPS Performance Target is that EPS for the final
Financial Year of the measurement period.
In March 2003 the Company established the RM plc Employee Share Trust to hedge the future obligations of the Group in
respect of share scheme awards. These shares are used to hedge the estimated liability but until vesting represents own
shares held – see Note 27.
Performance conditions
Assigning a fair value charge to share-based payments requires estimation of: the projected share price; the number of
instruments which are likely to vest; other non-market-based performance conditions.
29. Guarantees and contingent liabilities
a) Guarantees
The Company has entered into guarantees relating to the performance and liabilities of certain major contracts of its
subsidiaries. In addition, as set out in Note 26(b), some of the local government pension schemes have a customer
contractual guarantee whereby the Group reimburses the schemes for any IAS 19 deficit when the Group ceases to be a
participating employer. The Directors are not aware of any circumstances that have given rise to any liability under such
guarantees and consider the possibility of any arising to be remote.
During the year ended 30 November 2023, the Group has provided first ranking security to the bank facility lenders (see
Note 31) and provided second ranking security to the Research Machines 1988 Defined Benefit Pension Scheme and the
CARE Pension Scheme (see Note 26(c)).
b) Contingent liabilities
The Group has provided performance guarantees and indemnities relating to performance bonds and letters of credit
issued by its banks on its behalf, in the ordinary course of business. The Directors are not aware of any circumstances that
have given rise to any liability under such guarantees and indemnities and consider the possibility of any arising to be remote.
202202
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
30. Leases and commitments
a) Lease commitments
The outstanding lease commitments for leases that fall within the scope of IFRS 16 are recognised in the balance sheet as
lease liabilities (see Note 22). Other leases that are of low value or less than a year (except properties) are disclosed in the
table below.
Group
Within 1 year
In years 2 to 5 inclusive
The Company has no operating leases.
2023
£000
5
-
5
2022
£000
38
15
53
b) Capital commitments
At 30 November 2023 amounts contracted but not provided for total £nil (2022: £nil). The Company had no capital
commitments during the year.
31. Financial risk management
Group
Financial assets
Trade and other receivables – current
Trade and other receivables – non-current
Cash and short-term deposits
Financial liabilities
Trade and other payables – current
Trade and other payables – non-current
Bank loans and overdrafts
2023
£000
25,227
240
8,062
33,529
(29,378)
(14,297)
(53,651)
(97,326)
2022
£000
28,663
291
1,911
30,865
(50,922)
(15,998)
(48,728)
(115,648)
Company
2023
£000
-
-
-
-
(31,127)
-
(53,651)
(84,778)
2022
£000
1
7,858
-
7,859
(27,390)
-
(48,728)
(76,118)
All assets and liabilities classified as financial assets and financial liabilities are held at amortised cost except for forward
foreign exchange contracts of £278,000 liability (2022: £272,000 liability) which are classified as fair value through other
comprehensive income.
The Directors consider that the carrying amount of all financial assets and financial liabilities approximates their fair value.
It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be
undertaken and the Group does not hold or issue derivative financial instruments for speculative purposes.
The main risks arising from the Company’s financial assets and liabilities are market risk (foreign currency risk and interest
rate risk), credit risk and liquidity risk. The Board reviews and agrees policies on a regular basis for managing the risks
associated with these assets and liabilities.
203203
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
31. Financial risk management continued
Changes in liabilities arising from financing activities
At 1 December
Cash movements
Drawdown of borrowings
Repayment of borrowings
Borrowing facilities arrangement
and commitment fees
Interest paid
Payment of leasing liabilities
Non-cash movements
Interest costs
New leases
Lease break exercised
Other
At 30 November
2023
Borrowings
£000
48,728
Lease liabilities
£000
19,142
2022
Borrowings
£000
19,744
Lease liabilities
£000
20,929
30,167
(24,167)
(1,716)
(4,955)
-
5,724
-
-
(130)
53,651
-
-
-
-
(3,510)
330
490
(87)
126
16,491
73,000
(44,000)
(436)
(2,312)
-
2,439
-
-
293
48,728
-
-
-
-
(3,461)
347
1,414
(87)
-
19,142
Foreign currency risk
a) Translation
The Group is exposed to the translation risk of assets and liabilities held in overseas subsidiaries being translated in the
Group’s results at rates of exchange effective at the balance sheet date. The Group also maintains foreign currency
denominated cash accounts, but only holds balances required to settle its payables.
b) Transaction
Operations are also subject to foreign exchange risk from transactions in currencies other than their functional currency
and, once recognised, the revaluation of foreign currency denominated assets and liabilities. Principally, this relates to
transactions arising in US Dollars and Indian Rupees. Specifically, the Group purchases a proportion of its inventory in US
dollars and operating costs in the Group’s subsidiary RM Education Solutions India Pvt Limited are in Indian Rupees. The
Group also receives US Dollars from certain customers.
In order to manage these risks, the Group enters into derivative transactions in the form of forward foreign currency contracts.
To manage the US Dollar to Pounds Sterling risk, the forward foreign currency contracts purchased are designed to cover a
range of 25% to 90% of forecast currency denominated purchases and the contracts are set up to provide coverage over
future fixed price periods, typically up to 12 months. To manage the Indian Rupee to Pounds Sterling risk, the contracts
purchased are designed to cover 25% to 90% of forecast Rupee costs and are renewed on a revolving quarterly basis,
looking out up to 12 months.
During the period from December 2022 to October 2023, hedge accounting was not achieved resulting in changes in the
fair value of derivatives being recognised immediately in profit or loss. From November 2023 onwards, hedge accounting
was achieved and the effective portion of changes in the fair value of derivatives was recognised in other
comprehensive income.
204204
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
31. Financial risk management continued
The total amount of outstanding forward foreign exchange contracts to which the Group was committed was:
Currency
US Dollar
Rupee
Contract type
Buy
Buy
Currency
US Dollar
Rupee
Contract type
Buy
Buy
At 30 November 2023
Forward
contract value
Currency ‘000
Forward
contract value
£000
Mark-to-market value
£000
3,450
961,000
(2,764)
(9,287)
(12,051)
(2,726)
(9,047)
(11,773)
Forward
contract value
Currency ‘000
11,305
1,111,000
At 30 November 2022
Forward
contract value
£000
Mark-to-market value
£000
(9,477)
(11,447)
(20,924)
(9,429)
(11,223)
(20,652)
Fair value
£000
(38)
(240)
(278)
Fair value
£000
(48)
(224)
(272)
The fair value of the derivative financial instruments is estimated by discounting the future contracted cash flow, using
readily available market data and represents a level 2 measurement in the fair value hierarchy under IFRS 7. These fair value
gains/(losses) are included within trade and other receivables and trade and other payables respectively.
Of these, forward foreign currency exchange contracts with a contract value of £12,051,000 (2022: £20,924,000) and fair
value of £278,000 liability (2022: £272,000 liability) have been designated as effective hedges in accordance with IFRS 9
Financial Instruments: Recognition and Measurement. The movement in fair value of hedged derivative financial
instruments during the year was a net debit of £6,000 (2022: debit of £440,000) which has been recognised in Other
Comprehensive Income and presented in the hedging reserve in equity.
No ineffectiveness was identified in the forward foreign currency exchange contracts that have been designated hedges in
accordance with IFRS 9 Financial Instruments: Recognition and Measurement at 30 November 2023 or at 30 November 2022.
Commercially effective hedges may lead to Income Statement volatility in the future, particularly if the hedges do not meet
the criteria of an effective hedge in accordance with IFRS 9 Financial Instruments: Recognition and Measurement.
All Rupee forward contracts are non-deliverable and are settled on a net basis.
205205
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
31. Financial risk management continued
c) Foreign exchange rate sensitivity
The following table details how the Group’s income and equity would increase/(decrease) if there were a 10% increase/
(decrease) in the amount of the respective currency which could be purchased with Pounds Sterling (assuming all other
variables remain constant), for example from $1.26 : £1 to $1.39: £1 at the balance sheet date. The sensitivity analysis
includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for
a 10% change in foreign currency. A reasonably possible 10% weakening of Pounds Sterling against the relevant currency
would be estimated to have a comparable but opposite impact on income and equity.
The total amount of outstanding forward foreign exchange contracts to which the Group was committed was:
At 30 November 2022
At 30 November 2023
Group
Forward foreign exchange
contracts
Sensitivity
Group
10% increase in foreign exchange
rates against Pounds Sterling:
US Dollar
Australian Dollar
Indian Rupee
Nominal value
£000
12,051
Fair value
£000
(278)
Nominal value
£000
(20,924)
Fair value
£000
(272)
At 30 November 2023
At 30 November 2022
Net income
£000
Equity
£000
Net income
£000
169
(684)
190
(3)
-
(22)
(47)
(122)
79
Equity
£000
(47)
(349)
345
All the forward exchange contracts mature within one year.
In addition, a 10% strengthening of Sterling against the AUD Dollar from the translation of a net investment loan would
result in a decrease of £711k in equity. However there would be no overall effect on equity because there would be an
offset in the currency translation of the foreign operation.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the analysis
does not reflect management’s proactive monitoring methods and processes for exchange risk.
Interest rate risk
The only significant interest-bearing financial assets or liabilities relate to the Group’s borrowings referred to below. During the
year, adjusted average net debt was £55.9m (2022: £46.8m) and the maximum borrowings position was £64.8m (2022: £64.1m).
At 30 November 2023 the Group had a committed revolving credit facility with HSBC Bank plc and Barclays Bank plc,
which was originally signed on 5 July 2019 and in March 2023, the Group secured an agreement with lenders to extend the
existing £70.0m facility to 5 July 2025. Of the funds available, £5.0m is allocated to an on-demand working capital facility
with £5.7m allocated to foreign exchange and guarantee facilities.
Financial covenants from May 2023 to November 2024 were on a rolling 12 months minimum EBITDA basis. From February
2025, these existing financial covenants would have been replaced by a quarterly LTM EBITDA (post IFRS16) leverage test
and interest cover, both of which are required to be below 4x and interest cover over 4x from February 2025. At 30
November 2023 the minimum EBITDA covenant required was £8.6m versus actual EBITDA of £7.2m. For the quarters
ended 31 August 2023 and 30 November 2023 period, a waiver for the minimum EBITDA covenant was granted by the
lenders. In addition, during November 2023, the soft liquidity covenant limit on forecasted liquidity was exceeded for the
first time, resulting in a meeting held with lenders under the terms of the facility. The £55.0m drawn down at 30 November
2023 was not contractually due for repayment until 2025.
206206
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
31. Financial risk management continued
Prior to the end of the year, the Group entered discussions with lenders to extend the facility by a further year to July 2026
and amend the EBITDA and hard liquidity covenants.
Since the year end, the Group has secured an agreement with Lenders, which extends the existing £70.0m facility to July
2026. This agreement is secured against the shares of each of the obligors (other than RM plc) and by way of a fixed and
floating charge over all assets of the obligors, and has reset the covenants under the facility as follows:
•• A quarterly LTM EBITDA (excluding discontinued operations) covenant test from February 2024 to November 2025,
which is then replaced by a quarterly EBITDA leverage test and interest cover, which are required to be below and above
4x respectively from February 2026; and
•• A ‘hard’ liquidity covenant test requiring the Group to have liquidity greater than £7.5m on the last business day of the
month, and liquidity not be below £7.5m at the end of two consecutive weeks within a month, with a step-down period
applying from 15 September 2024 to 24 October 2024 and 1 January 2025 to 21 March 2025, during which the
minimum liquidity requirement is reduced from £7.5m to £5.0m.
Separate to this, the Group has a number of performance bonds relating to potential liabilities arising in connection with
any Local Government Pension Scheme that the Company participates in as a result of its managed services contracts in
the RM Technology Division (which were included in other provisions for the year ended 30 November 2022 and are
included in the net pension surplus for the year ended 30 November 2023). The Group also has financial guarantees
covering payments to suppliers and other performance guarantees for the RM Assessment business.
Interest is payable either weekly, monthly or quarterly based on the drawdown frequency. The interest payable on loans
under the revolving credit facility is between 3.35% and 4.1% (the Margin) above SONIA for the remainder of the committed
term subject to certain financial ratios. A commitment fee of 40% of the Margin was payable on the unutilised balance and
an arrangement fee of £379,000 (2022: £350,000) and independent business review fees and costs of £1,355,000 (2022:
£nil) were paid in 2023. The fees are recognised in the Consolidated Income Statement on an effective interest rate basis
over the duration of the facility.
The interest and currency profile of cash and cash equivalents is shown below:
Group
Pounds Sterling cash and cash equivalents
US Dollar
Euro
Indian Rupee
Singapore Dollar
Australian Dollar
New Zealand Dollar
Cash and cash equivalents
Floating rate
£000
2,304
10
-
-
-
281
-
2,595
2023
Interest free
£000
2,153
2,529
329
238
210
5
3
Total
£000
4,457
2,539
329
238
210
286
3
Floating rate
£000
898
-
-
-
-
-
-
2022
Interest free
£000
1
320
6
228
41
412
5
Total
£000
899
320
6
228
41
412
5
5,467
8,062
898
1,013
1,911
Borrowings – Pounds Sterling
55,000
-
55,000
49,000
-
49,000
207207
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
31. Financial risk management continued
The weighted average effective interest rates at the balance sheet date on interest bearing financial assets and liabilities
were as follows:
Group
Financial assets
Cash and cash equivalents
Financial liabilities
Overdrafts
Loans
2023
2022
Floating rate
£000
Weighted average
interest rate
%
Floating rate
£000
Weighted average
interest rate
£000
8,062
-
(55,000)
0.11
4.37
9.16
1,911
-
(49,000)
0.20
2.87
4.04
Interest rate sensitivity (assuming all other variables remain constant):
Group
1% increase in interest rates
1% decrease in interest rates
2023
2022
Income sensitivity
£000
Equity sensitivity
£000
Income sensitivity
£000
Equity sensitivity
£000
(550)
550
(550)
550
(490)
490
(490)
490
Credit risk
The Group’s principal financial assets are bank balances and trade and other receivables. The Group’s credit risk is primarily
attributable to its trade receivables and accrued income. Credit checks are performed on new customers and before credit
limits are increased. The amounts presented in the balance sheet are net of allowances for expected credit losses. Note 20
includes an analysis of trade receivables by type of customer and of the ageing of unimpaired trade receivables.
The credit risk on cash and cash equivalents (the geographic risk profile of which is set out above), liquid funds and derivative
financial instruments is limited because the counterparties are investment grade banks rated BBB+ and above. The Group has
no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers and a
large proportion are schools and educational institutions which are ultimately backed by the UK Government.
The carrying amount of financial assets represents the maximum credit exposure. The Group does not hold any collateral
to cover its risks associated with financial assets.
Liquidity risk
Cash is managed to ensure that sufficient liquid funds are available with a variety of counterparties, to meet short, medium
and long-term cash flow forecasting requirements. The Group has access to overdraft and borrowing facilities (see Interest
rate risk section) which mean that the Group can continue to meet its liabilities as they fall due.
The Group has approached its maximum borrowing limits during the year with borrowings under the RCF of £55.0m at
year end and has worked with its lenders to maintain liquidity. The Group believes it can maintain its liquidity, with the
initiatives begun this financial year including the decision to cease trading in RM Consortium business within the RM
Resources division.
Full details of the terms of the Group’s RCF facility, including financial covenants and the Group’s performance under those
financial covenants during the year are set out in Note 23.
208208
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
31. Financial risk management continued
Maturity profile of financial liabilities
The table below highlights the maturity profile of the financial liabilities.
Group
Financial liabilities
Trade payables
Lease liabilities
Derivative liabilities
Other payables
Accruals
Borrowings1
Lease liabilities due
after 1 year
Group
Financial liabilities
Trade payables
Lease liabilities
Derivative liabilities
Other payables
Accruals
Borrowings1
Lease liabilities due
after 1 year
Within one year
£000
One to two years
£000
At 30 November 2023
Two to five years
£000
More than five years
£000
16,008
2,488
278
2,757
8,141
5,115
34,787
-
-
-
-
-
-
57,984
57,984
2,067
34,787
60,051
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,672
4,672
8,901
8,901
At 30 November 2022
One to two years
£000
Two to five years
£000
More than five years
£000
Within one
year
£000
34,269
3,457
9,702
2,721
10,516
55,068
115,733
-
115,733
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,313
2,313
4,938
4,938
-
-
-
-
-
-
-
10,201
10,201
133,185
Total
£000
16,008
2,488
278
2,757
8,141
63,099
92,771
15,640
108,411
Total
£000
34,269
3,457
9,702
2,721
10,516
55,068
115,733
17,452
1. Borrowings are detailed in Note 23. The profile for the year ended 30 November 2023 reflects the cash flows to the facility extension date of
5 July 2025.
Capital management
The Group’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence as to sustain
future development of the business. Management monitors the return on capital, as well as the level of dividends to
ordinary shareholders and contributions to the defined benefit pension schemes.
209209
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
32. Related party transactions
a) Key management personnel
The remuneration of the Group’s key management personnel during the year, which consisted of the Group’s Directors
and members of the Executive management team, was as follows:
Group
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payment (credit)/expense
Total
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
2,389
67
193
(288)
2,361
2,443
95
173
129
2,840
Share-based payments above include fair value charges for Executive Directors of £102,008 (2022: £nil) in respect of
awards to Mark Cook and £9,656 (2022: £nil) in respect of awards to Simon Goodwin and fair value credits of £(359,565) in
respect of awards to Neil Martin who resigned on 16 January 2023 (2022: £62,135 charge) and £nil (2022: £9,045 credit) in
respect of awards to Mark Berry who resigned on 15 August 2022.
Further information about the remuneration of individual Directors is provided in the audited section of the Remuneration
Report.
b) Transactions between the Company and its subsidiary undertakings
During the year, the Company entered into the following transactions with its subsidiary undertakings:
Company
(Payments)/receipts:
Management recharges
Net intercompany interest payable
Year ended
30 November 2023
£000
Year ended
30 November 2022
£000
(1,175)
(1,048)
(868)
(473)
Total amounts owed between the Company and its subsidiary undertakings are disclosed in Notes 20 and 22 respectively.
c) Other related party transactions
The Group encourages its Directors and employees to be governors, trustees or equivalent of educational establishments.
The Group trades with these establishments in the normal course of its business.
Searchlight Business Services Limited
Mark Cook, an Executive Director, is the Non-Executive Chair of Searchlight Business Services Ltd. Since his appointment
on 16 January 2023, the Group has purchased £423,553 (2022: £nil) relating to recruitment and executive search fees. Mark
was not involved in the commercial discussions relating to this supply. At the year end, there is a balance payable of
£41,040 (2022: £nil).
210210
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
32. Related party transactions continued
Getronics
Mark Cook, an Executive Director, was a Non-Executive Director of Getronics until November 2023. Since his appointment
on 16 January 2023, the Group has purchased £34,573 (2022: £nil) relating to software licences. Mark was not involved in
the commercial discussions relating to this supply. At the year end, there is a balance payable of £nil (2022: £nil).
Wellington College
Helen Stevenson, appointed a Non-Executive Director on 16 February 2022, is a trustee of Wellington College. The Group
made sales of £664 (FY22: £2,338) to this Trust. At the year end, there is a balance of £nil (FY22: £327).
Dulwich College Junior School
The husband of Vicky Griffiths, a Non-Executive Director until 6 October 2023, is Head Teacher of Dulwich College Junior
School. Between the period 1 December 2022 and 6 October 2023, the Group made sales of £1,357 (2022: £1,915) to this
school. At year end there is a balance of £144 outstanding (2022: £1,412).
Restore
Charles Bligh, Non-Executive Director of RM plc until 31 October 2023, was the CEO of Restore plc until 6 July 2023, which
is a supplier to the Group of scanning and associated services. During the period 1 December 2023 to 6 July 2023, the
Group purchased services with a value of €2,302 (2022: €242,340) and £1,394,017 (2022: £3,469,412) from Restore Digital
Limited (part of the Restore plc group). At the year end a balance of £nil (2022: £1,066,766) relating to these purchases was
outstanding. Charles was not involved in any discussions relating to the use of Restore plc group.
Spinfield School
Neil Martin, an Executive Director until 1 April 2023, is a governor of Spinfield School. During the period 1 December 2022
to 1 April 2023, the Group made sales of £77 (2022: £1,807) to the school. At the year end there is a balance of £nil (2022:
£239) outstanding.
Informa plc
Patrick Martell, a Non-Executive Director until 31 December 2023, is Chief Operating Officer of Informa plc. During the year
the Group made a payment of £234 (2022: £nil) to Informa Markets (UK) Limited, an indirect subsidiary of Informa plc, in full
settlement of the balance outstanding at 30 November 2022 relating to online subscription for legal guidance in 2021.
33. Prior year restatement
The comparative period Financial Statements have been restated to reflect a revised split of cost of sales and operating
expenses to improve the presentation and comparability of results, as set out below.
Cost of sales and operating expenses
Following a review of costs in the RM Technology division during the year ended 30 November 2023, the split of costs
between cost of sales and operating expenses was amended to align more closely with how the division now operates and
to improve presentation and comparability of results. The results for the year ended 30 November 2022 above have been
adjusted to reflect the impact if this change which was to move £1,215,000 of costs not directly related to the sale of
products and services from cost of sales to operating expenses for the year ended 30 November 2022 (2021: £1,157,000).
211211
RM plc Annual report and financial statements 2023 Financial statements Notes to the financial statements continued
33. Prior year restatement continued
These adjustments have the following impact on the primary statements for the year ended 30 November 2022 and the
year ended 30 November 2021:
Consolidated Income Statement
Year ended 30 November 2022
Year ended 30 November 2021
As reported
£000
Restatement
impact
£000
Restated
£000
As reported
£000
Restatement
impact
£000
Continuing operations
Revenue
Cost of sales
Gross profit
Operating expenses
Increase in allowance for receivables
Impairment losses
(Loss)/profit from operations
Finance income
Other income
Finance costs
(Loss)/profit before tax
Tax
(Loss)/profit from the year from
continuing operations
Profit for the year from
discontinuing operations
214,167
(146,878)
67,289
(85,789)
(850)
(2,236)
(21,586)
614
3,010
(2,825)
(20,787)
4,698
(16,089)
1,590
(Loss)/profit from the year
(14,499)
Earnings per ordinary share on continuing operation
– basic
– diluted
Earnings per ordinary share on
discontinuing operations
– basic
– diluted
Earnings per ordinary share on total
operations
– basic
– diluted
(19.3)p
(19.3)p
1.9p
1.9p
(17.4)p
(17.4)p
1,215
1,215
(1,215)
-
-
-
-
-
-
-
-
-
-
214,167
206,149
(145,663)
(138,771)
68,504
(87,004)
(850)
(2,236)
(21,586)
614
3,010
(2,825)
(20,787)
4,698
(16,089)
67,378
(63,634)
(157)
-
3,587
28
1,399
(1,396)
3,618
(1,424)
2,194
1,590
2,000
(14,499)
4,194
1,157
1,157
(1,157)
-
-
-
-
-
-
-
-
-
-
-
(19.3)p
(19.3)p
1.9p
1.9p
(17.4)p
(17.4)p
2.6p
2.6p
2.4p
2.4p
5.0p
5.0p
Restated
£000
206,149
(137,614)
68,535
(64,791)
(157)
-
3,587
28
1,399
(1,396)
3,618
(1,424)
2,194
2,000
4,194
2.6p
2.6p
2.4p
2.4p
5.0p
5.0p
The prior year adjustment does not impact the Consolidated Statement of Comprehensive Income, Consolidated Balance
Sheet or Consolidated Cash Flow Statement for the year ended 30 November 2022 or year ended 30 November 2021.
212212
RM plc Annual report and financial statements 2023
Financial statements Notes to the financial statements continued
34. Post balance sheet events
On 6 March 2024, the Group announced the extension and amendment of the banking facility with its lenders to 5 July
2026, with key changes disclosed in Note 31.
There are no other post balance sheet events.
213213
RM plc Annual report and financial statements 2023 Shareholder information
Shareholder information
Shareholder information
Glossary
The use of Company refers to RM plc. The use of Group
refers to RM plc and its subsidiary undertakings covered by
the consolidated accounts.
Investor information
Information for investors is available at www.rmplc.com.
Enquiries can be directed to Daniel Fattal, Company
Secretary, at the Group head office address or at
companysecretary@rm.com.
Registrars and shareholding information
Shareholders can access the details of their holdings in RM
plc via the Shareholder Services option within the investor
section of the corporate website at www.rmplc.com.
Shareholders can also make changes to their address
details and dividend mandates online. All enquiries about
individual shareholder matters should be made to the
Company’s registrar, Link Asset Services, either via email at
shareholderenquiries@linkgroup.co.uk or by telephone to
0371 664 0300. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international
rate. Lines are open between 09:00 - 17:30, Monday to
Friday excluding public holidays in England and Wales.
To help shareholders, the Link Asset Services’ Share Portal
at www.signalshares.com contains a frequently asked
questions section for shareholders.
Electronic communication
Shareholders are able to receive Company communication
via email. By registering your email address, you will receive
emails with a web link to information posted on our website.
This can include our report and accounts, notice of meetings
and other information we communicate to our shareholders.
Electronic communication brings numerous benefits, which
include helping us reduce our impact on the environment,
increased security (your documents cannot be lost in the
post or read by others) and faster notification of information
and updates. To sign up to receive e-communications go to
Link Asset Services’ Share Portal at www.signalshares.com.
All you need to register is your investor code, which can be
found on your share certificate or your dividend tax voucher.
The Share Portal is a secure online site where you can manage
your shareholding quickly and easily. You can check your
shareholding and account transactions, change your name,
address or dividend mandate details online at any time and
vote online via the Share Portal.
Beneficial shareholders with ‘information
rights’
Please note that beneficial owners of shares who have been
nominated by the registered holders of those shares to receive
information rights under section 146 of the Companies Act
2006 are required to direct all communications to the
registered holder of their shares rather than to Link Asset
Services, or to the Company directly.
Multiple accounts on the shareholder
register
If you have received two or more copies of this document,
it may be because there is more than one account in your
name on the shareholder register. This may be due to either
your name or address appearing on each account in a slightly
different way. For security reasons, Link Asset Services will
not amalgamate the accounts without your written consent.
If you would like to amalgamate your multiple accounts
into one account, please write to Link Asset Services.
214214 RM plc Annual report and financial statements 2023
Shareholder information
Company information
Company Secretary
Daniel Fattal RM plc
142B Park Drive
Milton Park
Abingdon
Oxfordshire OX14 4SE
Group head office and registered office
142B Park Drive
Milton Park
Abingdon
Oxfordshire OX14 4SE
Telephone: +44 (0)1235 645 316
Registered number
RM plc’s registered number is 01749877
Corporate website
Information about the Group’s activities is available from
www.rmplc.com.
Auditor
Deloitte LLP
Four Brindleyplace
Birmingham B1 2HZ
Financial advisors and stockbrokers
Investec Bank plc
30 Gresham Street
London EC2V 7QP
Financial Public Relations
Headland PR Consultancy LLP
1 Suffolk Lane
London EC4R 0AX
Registrar
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Legal advisor
Osborne Clarke
One London Wall
London EC2Y 5EB
215215
RM plc Annual report and financial statements 2023 plc
142B Park Drive
Milton Park
Milton
Abingdon
Oxfordshire
OX14 4SE
Telephone: +44 (0)1235 645 316
Stock code: RM.
www.rmplc.com