LSE:RM.

Stock Analysis Report

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Executive Summary

RM plc supplies products, services, and solutions to educational markets in the United Kingdom and internationally. More Details

Rewards

PE ratio (11.4x) is below the UK market (20.4x)

Earnings are forecast to grow 26.45% per year

Risk Analysis

RM. passed our risk checks.


Snowflake Analysis

Flawless balance sheet and good value.

Share Price & News

How has RM's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RM. is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: RM.'s weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

-4.5%

RM.

-3.1%

GB Software

0.0002%

GB Market


1 Year Return

-34.9%

RM.

-10.2%

GB Software

-10.0%

GB Market

Return vs Industry: RM. underperformed the UK Software industry which returned -10.2% over the past year.

Return vs Market: RM. underperformed the UK Market which returned -10% over the past year.


Shareholder returns

RM.IndustryMarket
7 Day-4.5%-3.1%0.0002%
30 Day9.2%-3.8%10.0%
90 Day1.1%-10.5%7.0%
1 Year-34.9%-34.9%-9.0%-10.2%-6.4%-10.0%
3 Year25.9%18.0%-30.1%-38.5%1.3%-11.1%
5 Year32.0%15.2%17.7%-2.7%25.7%-2.9%

Long-Term Price Volatility Vs. Market

How volatile is RM's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is RM undervalued compared to its fair value and its price relative to the market?

11.38x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RM. (£1.9) is trading above our estimate of fair value (£1.07)

Significantly Below Fair Value: RM. is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RM. is good value based on its PE Ratio (11.4x) compared to the GB Software industry average (37.6x).

PE vs Market: RM. is good value based on its PE Ratio (11.4x) compared to the UK market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: RM. is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: RM. is good value based on its PB Ratio (3.3x) compared to the GB Software industry average (3.5x).


Next Steps

Future Growth

How is RM forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

26.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RM.'s forecast earnings growth (26.5% per year) is above the savings rate (1.2%).

Earnings vs Market: RM.'s earnings (26.5% per year) are forecast to grow slower than the UK market (27.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RM.'s revenue (6.1% per year) is forecast to grow slower than the UK market (6.7% per year).

High Growth Revenue: RM.'s revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RM.'s Return on Equity is forecast to be high in 3 years time (21.9%)


Next Steps

Past Performance

How has RM performed over the past 5 years?

7.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RM. has high quality earnings.

Growing Profit Margin: RM.'s current net profit margins (6.6%) are lower than last year (8.2%).


Past Earnings Growth Analysis

Earnings Trend: RM.'s earnings have grown by 7% per year over the past 5 years.

Accelerating Growth: RM.'s has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RM. had negative earnings growth (-24.1%) over the past year, making it difficult to compare to the Software industry average (-3.2%).


Return on Equity

High ROE: RM.'s Return on Equity (29.4%) is considered high.


Next Steps

Financial Health

How is RM's financial position?


Financial Position Analysis

Short Term Liabilities: RM.'s short term assets (£57.1M) exceed its short term liabilities (£50.6M).

Long Term Liabilities: RM.'s short term assets (£57.1M) exceed its long term liabilities (£53.3M).


Debt to Equity History and Analysis

Debt Level: RM.'s debt to equity ratio (39.1%) is considered satisfactory.

Reducing Debt: RM. had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: RM.'s debt is well covered by operating cash flow (103.5%).

Interest Coverage: RM.'s interest payments on its debt are well covered by EBIT (20.2x coverage).


Balance Sheet


Next Steps

Dividend

What is RM current dividend yield, its reliability and sustainability?

2.42%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate RM.'s dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RM.'s dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RM.'s dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RM.'s dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: RM. is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RM.'s dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average board tenure


CEO

David Brooks (51 yo)

7.67yrs

Tenure

UK£553,000

Compensation

Mr. David Brooks has been the Chief Executive Officer of RM Plc since March 01, 2013. Mr. Brooks served as a Chief Operating Officer RM Plc since July 01, 2012 until March 01, 2013. Mr. Brooks joined RM Ed...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD737.27K) is about average for companies of similar size in the UK market ($USD619.78K).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
David Brooks
CEO & Executive Director7.67yrsUK£553.00k0.53%
£ 872.9k
Neil Martin
CFO & Executive Director5.17yrsUK£467.00k0.14%
£ 228.5k
John Poulter
Non Executive Chairman7.5yrsUK£135.00k0.11%
£ 173.2k
Patrick Martell
Senior Independent Director0.25yrUK£44.00k0.0061%
£ 9.9k
Mike Tomlinson
Chairman of Education Advisory Councilno dataUK£16.00kno data
Paul Dean
Independent Non-Executive Director0.75yrno data0.024%
£ 39.6k
Vicky Griffiths
Independent Non-Executive Director0.33yrno data0.0035%
£ 5.7k

3.0yrs

Average Tenure

57.5yo

Average Age

Experienced Board: RM.'s board of directors are not considered experienced ( 3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RM. insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

RM plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: RM plc
  • Ticker: RM.
  • Exchange: LSE
  • Founded: 1973
  • Industry: Application Software
  • Sector: Software
  • Market Cap: UK£163.303m
  • Shares outstanding: 82.48m
  • Website: https://www.rmplc.com

Number of Employees


Location

  • RM plc
  • 142B Park Drive
  • Milton Park
  • Abingdon
  • Oxfordshire
  • OX14 4SE
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RM.LSE (London Stock Exchange)YesOrdinary SharesGBGBPDec 1994
RMP1BST (Boerse-Stuttgart)YesOrdinary SharesDEEURDec 1994
RMlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPDec 1994

Biography

RM plc supplies products, services, and solutions to educational markets in the United Kingdom and internationally. The company operates through three divisions: RM Resources, RM Results, and RM Education....


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/26 19:09
End of Day Share Price2020/11/26 00:00
Earnings2020/05/31
Annual Earnings2019/11/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.