RM plc: Successful negotiation of bank covenants waiver for August 2023

29 August 2023

 RM plc

Successful negotiation of bank covenants waiver for August 2023

RM plc, a leading international supplier of technology and resources to the education sector (LSE: RM) (RM, the Company), today provides an update on the successful renegotiation of a short-term unconditional covenant waiver with its lenders, and the ongoing discussions with its lenders to extend this covenant waiver to cover the 30 November 2023 covenant test date.

As announced in its half year results on 9 August 2023, the business operated within its existing financial covenants for the first half of 2023 but indicated that it expected to breach the facilitys LTM EBITDA covenant from the third quarter of the FY2023 financial year, albeit the Company is not expected to breach its liquidity covenant test in FY23 or FY24. The Directors therefore concluded that it remained appropriate to prepare the half-year financial statements on a going concern basis.

The Banks currently remain supportive of management, recognising the issues that the business has faced and also the steps taken through this transformation period (cost savings and restructuring) to return to previous levels of financial performance. In light of the continued headwinds and the need for the annualisation of savings to mature, the Company and the Banks entered into discussions to agree suitable waivers and amendments to its existing facility.

RM announces that it has successfully received waivers with its lenders for its August 2023 EBITDA financial covenant and continues to comply with the conditions of each lender with regards to that waiver and the respective facility agreement. The negotiation of a suitable covenant waiver for the period ending 30 November 2023 is ongoing, and we expect to be able to announce its conclusion before the end of the current financial year.

The Company has also commenced the renegotiation of an amendment and extension of its lending facility, which matures in July 2025. The Company is working with its advisers and the Banks, and the Company expects renegotiation to have concluded by the end of Q1 2024. 

Mark Cook, Chief Executive of RM, commented:

"Whilst the last financial year has been extremely challenging, I am grateful for the continuing support of our lenders and the amendment to our facilitys covenants. Both lenders have held long term supportive relationships with the Group over many years and continue to support RM as it implements its Transformation Programme to reduce its net debt and return the Company to growth and profitability."

Enquiries:

RM plc       investorrelations@rm.com

Mark Cook, Chief Executive Officer 

Emmanuel Walter, Chief Financial Officer (interim)

Fiona ONolan, Investor Relations 

Headland Consultancy (Financial PR)                    +44 203 805 4822

Stephen Malthouse (smalthouse@headlandconsultancy.com)

Chloe Francklin (cfrancklin@headlandconsultancy.com)

Jemma Savage (jsavage@headlandconsultancy.com)

Notes to editors

RM provides market-leading products and services to educational institutions, exam bodies and international governments which improve, simplify and support education and learning.

The education sector is transforming, and RM is well positioned to capitalise on this through its three divisions.

• RM Resources is the established provider of education resources for early years, primary schools, and secondary schools across the UK and to 80 countries internationally
• RM Assessment is a leading provider of assessment software, supporting exam awarding bodies, universities, and governments worldwide to digitise their assessment delivery
• RM Technology is a market-leading supplier of ICT software, technology and services to UK schools and colleges