LSE:RM.

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Solid track record with adequate balance sheet and pays a dividend.

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

1.1%

RM.

4.1%

GB Software

-0.3%

GB Market


1 Year Return

42.1%

RM.

6.5%

GB Software

3.0%

GB Market

Return vs Industry: RM. exceeded the UK Software industry which returned 6.5% over the past year.

Return vs Market: RM. exceeded the UK Market which returned 3% over the past year.


Shareholder returns

RM.IndustryMarket
7 Day1.1%4.1%-0.3%
30 Day7.2%1.6%-0.9%
90 Day20.0%-8.5%-2.0%
1 Year46.7%42.1%12.6%6.5%8.0%3.0%
3 Year130.3%108.5%6.6%-11.1%18.0%3.6%
5 Year131.6%96.5%69.3%35.5%35.8%6.4%

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?

12.75x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: RM. (£2.82) is trading above our estimate of fair value (£1.86)

Significantly Undervalued: 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 (12.7x) compared to the Software industry average (27.9x).

PE vs Market: RM. is good value based on its PE Ratio (12.7x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: Insufficient data to calculate RM.'s PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RM. is overvalued based on its PB Ratio (5.5x) compared to the GB Software industry average (3.1x).


Next Steps

Future Growth

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

-16.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RM.'s earnings are forecast to decline over the next 3 years (-16.3% per year).

Earnings vs Market: RM.'s earnings are forecast to decline over the next 3 years (-16.3% per year).

High Growth Earnings: RM.'s earnings are forecast to decline over the next 3 years.

Revenue vs Market: RM.'s revenue (3.4% per year) is forecast to grow slower than the UK market (3.9% per year).

High Growth Revenue: RM.'s revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: Insufficient data to determine if RM.'s Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has RM performed over the past 5 years?

8.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: RM.'s earnings have grown by 8.6% per year over the past 5 years.

Accelerating Growth: RM.'s earnings growth over the past year (24.1%) exceeds its 5-year average (8.6% per year).

Earnings vs Industry: RM. earnings growth over the past year (24.1%) exceeded the Software industry 7%.


Return on Equity

High ROE: RM.'s Return on Equity (43.4%) is considered outstanding.


Return on Assets

ROA vs Industry: RM. has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: RM.'s Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is RM's financial position?


Financial Position Analysis

Short Term Liabilities: RM.'s short term assets (£66.4M) exceeds its short term liabilities (£62.5M)

Long Term Liabilities: RM.'s short term assets (66.4M) exceeds its long term liabilities (45.0M)


Debt to Equity History and Analysis

Debt Level: RM.'s debt to equity ratio (54.8%) is considered high

Reducing Debt: RM.'s debt to equity ratio has increased from 0% to 54.8% over the past 5 years.

Debt Coverage: RM.'s debt is well covered by operating cash flow (60.5%).

Interest Coverage: RM.'s interest payments on its debt are well covered by EBIT (46.8x coverage).


Balance Sheet

Inventory Level: RM. has a high level of physical assets or inventory.

Debt Coverage by Assets: RM.'s debt is covered by short term assets (assets are 2.896900x debt).


Next Steps

Dividend

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

2.70%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%2.0%markettop25%5.4%industryaverage2.7%forecastin3Years3.3%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: RM.'s dividend (2.7%) is higher than the bottom 25% of dividend payers in the UK market (2.01%).

High Dividend: RM.'s dividend (2.7%) is low compared to the top 25% of dividend payers in the UK market (5.36%).

Stable Dividend: RM.'s dividend payments have been volatile in the past 10 years.

Growing Dividend: RM.'s dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.8%), RM.'s dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RM.'s dividends in 3 years are forecast to be well covered by earnings (34.2% payout ratio).


Next Steps

Management

What is the CEO of RM's salary, the management and board of directors tenure and is there insider trading?

5.7yrs

Average board tenure


CEO

David Brooks (50yo)

6.6yrs

Tenure

UK£982,000

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 ($USD1.26M) is about average for companies of similar size in the UK market ($USD645.43K).

Compensation vs Earnings: David's compensation has increased by more than 20% in the past year.


Board Age and Tenure

5.7yrs

Average Tenure

55yo

Average Age

Experienced Board: RM.'s board of directors are considered experienced (5.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUK£162,39205 Feb 19
Andy Wilson
EntityIndividual
Shares68,089
Max PriceUK£2.39

Ownership Breakdown


Management Team

  • Neil Martin (47yo)

    CFO & Executive Director

    • Tenure: 4.1yrs
    • Compensation: UK£840.00k
  • Greg Davidson

    Company Secretary

    • Tenure: 0yrs
  • David Brooks (50yo)

    CEO & Executive Director

    • Tenure: 6.6yrs
    • Compensation: UK£982.00k

Board Members

  • John Poulter (76yo)

    Non Executive Chairman

    • Tenure: 6.4yrs
    • Compensation: UK£131.00k
  • Pat Martell (55yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£43.00k
  • Deena Mattar (54yo)

    Senior Independent Non-Executive Director

    • Tenure: 5.6yrs
    • Compensation: UK£48.00k
  • Mike Tomlinson (77yo)

    Chairman of Education Advisory Council

    • Tenure: 0yrs
    • Compensation: UK£16.00k
  • Andy Blundell (59yo)

    Independent Non-Executive Director

    • Tenure: 2.4yrs
    • Compensation: UK£39.00k
  • Neil Martin (47yo)

    CFO & Executive Director

    • Tenure: 4.1yrs
    • Compensation: UK£840.00k
  • David Brooks (50yo)

    CEO & Executive Director

    • Tenure: 6.6yrs
    • Compensation: UK£982.00k

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£230.850m
  • Shares outstanding: 81.86m
  • Website: https://www.rmplc.com

Number of Employees


Location

  • RM plc
  • 140 Eastern Avenue
  • Milton Park
  • Abingdon
  • Oxfordshire
  • OX14 4SB
  • 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 Analysis2019/10/18 20:37
End of Day Share Price2019/10/18 00:00
Earnings2019/05/31
Annual Earnings2018/11/30


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.