RM – results and Dacta acquisition
RM have released their half year results which look very positive, although CEO Time Pearson played them down somewhat saying, ‘The first half results are not necessarily a good indicator of full-year outcome’. The relevant highlights are:
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gaining real traction in BSF
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broadening the business, particularly the move into assessment and data services with AQA (£1m) and Cambridge Assessment (£21m)
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beating Findel to supply sports kit to Tesco’s school programme (TTS)
RM also announced it has extended its reach in the educational supplies sector with the £3.99m purchase of DACTA, the European distributor for LEGO and TOLO education products. DACTA’s 2006 revenue was £6.5m with profits of just £570k. To be fair the company as it is now was only created in 2004 and has just 14 employees, the most senior of whom (the two founding directors) have worked for LEGO for a combined total of 32 years.
As is usual with most of RM’s deals they are paying just £2.28m up front and £1.71m in 2010 if the business reaches specified performance targets. The numbers on the deal - a turnover multiple of just 0.6 and a profit multiple of 7 - are far lower than those being paid by private equity firms bidding for education assets.