RM plc (LON:RM), a global leader in EdTech and digital assessment solutions, is entering an exciting new era with the official launch of RM Ava, a pioneering platform set to redefine the future of education technology. This milestone arrives on the heels of a transformative FY24, which saw the company make significant strides across operations and financial performance, as detailed in a recent report by Singer Capital Markets.
A Year of Strategic Growth
According to Singer Capital Markets, FY24 marked “another period of significant progress” for RM, with a notable surge in bottom-line performance. Adjusted Operating Profit (AOP) rose from just £0.3 million to £8.6 million, while unlevered free cash flow swung from a negative £15.1 million to a positive £0.3 million. These figures underscore the company’s success in streamlining operations and enhancing efficiency.
Looking ahead to FY25, Singer’s analysts maintain a bullish outlook, forecasting a return to revenue growth and continued benefit from cost-saving measures. They emphasise RM’s strong visibility for achieving “continued material progress” and predict an improving net debt position.
RM Ava: A Strategic Milestone
The headline development for RM is undoubtedly the launch of RM Ava, formerly known as the Global Accreditation Platform. With a £6 million investment in FY24 and an equivalent commitment for FY25, RM Ava represents a bold leap into the future of digital assessment.
RM Ava consolidates RM’s existing assessment tools into a single cloud-based platform, offering an end-to-end solution that spans the entire assessment lifecycle—from content creation and secure online testing to AI-driven marking and feedback. Crucially, it’s modular, scalable, and designed for global deployment, aligning perfectly with RM’s long-term strategy.
As CEO Mark Cook puts it, “The official launch of RM Ava represents a major step forward in our transformation and growth strategy. RM Ava brings together our world-class tools onto a single, end-to-end solution, with a clear, new identity. The platform will cover everything from assessment creation to AI-enhanced marking, with the opportunity to develop new features for the platform in the future.”
Cook added, “Looking ahead, RM Ava is primed to be a significant driver of customer growth while simultaneously expanding our margin. Our focus remains on enabling the improvement of educational outcomes around the world and I am confident that RM Ava will open up avenues for our customers to make learning more engaging, accessible and impactful.”
Backed by Major Contract Wins
The confidence in RM Ava’s potential is bolstered by two of the most substantial contract wins in RM’s history. In 2024, RM secured long-term deals with the International Baccalaureate (IB) and Cambridge University Press and Assessment (CUPA), both of which will use RM Ava as they transition to fully digitalised assessments beginning in 1H25. These agreements have propelled RM’s Assessment contracted order book to a record £96 million, up from £41 million in FY23.
Singer Capital Markets highlighted this in their analysis, stating, “These major contract wins provide long-term revenue visibility and really validate RM’s new Assessment platform and its multi-year growth potential.”
Strong Forecasts and Strategic Options
RM is currently valued at a share price of 100.5p with a 12-month target of 140p, representing a potential 39.3% upside. However, Singer Capital Markets believes this could be just the beginning. The analysts suggest that further upside could be realised through either outperformance against current forecasts or successful execution of a deleveraging strategy, including potential divestments of the Resources and Technology divisions.
Under such a scenario, RM’s core Assessment business could be valued significantly higher, with Singer noting that the platform might trade at just 4.9x EV/EBITDA and yield a 13% free cash flow return by FY26.
Highlights from RM’s FY24 Results
- Revenue: £166.1 million
- Adjusted EBITDA: £13.1 million
- Adjusted Operating Profit (AOP): £8.6 million (up from £0.3 million)
- Assessment Order Book: Record £96 million
- Major Contracts: International Baccalaureate and Cambridge University Press & Assessment
- Free Cash Flow: Improved from -£15.1 million to +£0.3 million
On a Final Note
RM plc is clearly gaining momentum. The launch of RM Ava, bolstered by landmark contracts and a sound financial base, signals a new chapter of growth and innovation. The strategic clarity and execution witnessed over FY24 suggest RM is not just adapting to change but leading it within the EdTech sector.
As RM continues its transition from a legacy paper-based assessment provider to a digital-first platform innovator, both investors and educators should be watching closely. The journey ahead looks promising, with RM Ava poised to become a cornerstone in modern educational delivery.
