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RM PLC shares dropped on Tuesday after the company skipped its interim dividend, reported a swing to loss, and warned on profit in the short-term.
RM shares were trading 31% lower at 68.30 pence on Tuesday morning.
RM is an Abingdon, England-based provider of technology and resources to education sector.
It swung to a pretax loss of £7.2 million in the six months to May 31 from a profit of £2.9 million a year before.
Operating expenses jumped 38% to £40.6 million from £29.4 million, but revenue grew by just 4.4% to £100.3 million from £96.1 million.
The company attributed the revenue growth to strong international sales in its RM Resources unit, as well as a full series of UK school exams.
Nonetheless, RM said revenue was below expectations:
‘It is worth noting that revenue was lower than anticipated, held back by the short-term impact in RM Resources of delayed shipments at the end of the period due to the implementation of the new IT platform.’
RM decided to skip its interim dividend, due to the elevated costs and timeline associated with the deployment of its IT platform. The firm paid an interim dividend of 1.7 pence a year ago.
Looking ahead, the company warned of challenging headwinds, such as inflation and high energy costs.
RM said that the IT implementation coupled with the current macroeconomic challenges will ‘dilute’ profit conversion in the short-term.
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