strawberry Posted July 25, 2011 Posted July 25, 2011 Jobs under threat at RM Education (From thisisoxfordshire) Can't imagine it's going to be a long term problem for them but it does show , as expected, the BSF bubble went pop in a big way.
sparkeh Posted July 25, 2011 Posted July 25, 2011 The headline is a little misleading? The company has said it can't guarantee jobs over the next 12 months, but in this climate not many companies can.
Hightower Posted July 25, 2011 Posted July 25, 2011 How is the headline misleading - there appears to be trouble at rm, at least for those employed by the company?
MK-2 Posted July 25, 2011 Posted July 25, 2011 The headline is a little misleading? The company has said it can't guarantee jobs over the next 12 months, but in this climate not many companies can. no, the company gave no comment about job security in the next 12 months. it says bosses refused to give job security because of a slump in share prices, so its not misleading there really
sparkeh Posted July 25, 2011 Posted July 25, 2011 Ah well guess we are reading it differently. Due to the seasonality of many of the group’s businesses, it is difficult to predict accurately the outcome for the current period until after the summer. Perhaps wait until after this period to see if they are in 'trouble'. Also: following the trading statement, there was no warning to Milton Park staff of redundancies or job losses.
strawberry Posted July 25, 2011 Author Posted July 25, 2011 Not guaranteeing jobs isn't a major suprise, RM had a big clear out the same week BSF was chopped. So any further bad news and they will almost definately adjust the workforce. What is a bigger problem is the 20% share price drop, It seems disproportionate to the results.
CyberNerd Posted July 25, 2011 Posted July 25, 2011 What is a bigger problem is the 20% share price drop, It seems disproportionate to the results. That's not at all disproportionate; RM are on a sliding scale downwards. They do very little to enhance teaching and learning within schools and charge far too much for their services. IMO they are in the pockets of council executives - and lets faces it; when the tories are done, there's not going to be many LEA's intact to pay RM's shareholders. I could say the same for capita, but I see why they charge academies full price to re-buy the lock in fee. 1
EdWhittaker Posted January 5, 2012 Posted January 5, 2012 An update on this thread: Not sure if RM is in trouble? Well, their share price has tumbled over 60% and it's selling off its stake in Lego Education and Dacta Toys Lego buys out partner in schools unit - Business News - Business - The Independent
mb2k01 Posted January 5, 2012 Posted January 5, 2012 Also looking to sell off AMI (Sub who supply cashless catering / e-reg / printing integration etc) 300 people recently made redundant too.
X-13 Posted January 5, 2012 Posted January 5, 2012 The more people talk about how they're "in trouble" the more likely it is that they'll get into trouble. Shareholders jump ship because of the rumours, which makes the rumours true.
EdWhittaker Posted January 5, 2012 Posted January 5, 2012 The more people talk about how they're "in trouble" the more likely it is that they'll get into trouble. Shareholders jump ship because of the rumours, which makes the rumours true. I don't think it rumour. Anyway, have a look at RM's own website RM plc Share Price
MK-2 Posted January 5, 2012 Posted January 5, 2012 The more people talk about how they're "in trouble" the more likely it is that they'll get into trouble. Shareholders jump ship because of the rumours, which makes the rumours true. Well in the case of RM, spread the word, light the beacons, fluffle the pigeons, fire up the wireless and tell people about it 1
CyberNerd Posted January 5, 2012 Posted January 5, 2012 Well in the case of RM, spread the word, light the beacons, fluffle the pigeons, fire up the wireless and tell people about it are you a hedge fund manager?
EdWhittaker Posted January 5, 2012 Posted January 5, 2012 Well in the case of RM, spread the word, light the beacons, fluffle the pigeons, fire up the wireless and tell people about it I'll second that!
MK-2 Posted January 5, 2012 Posted January 5, 2012 are you a hedge fund manager? No no, just someone who despises this particular company and the way they operate 2
EdWhittaker Posted January 5, 2012 Posted January 5, 2012 No no, just someone who despises this particular company and the way they operate I'll second that, too!
X-13 Posted January 5, 2012 Posted January 5, 2012 I don't think it rumour. Anyway, have a look at RM's own website RM plc Share Price The share price drops because people are selling shares. They're selling shares because of the rumours they're in trouble. RM now look like they're actually in trouble, so people sell shares. It's a vicious circle. And one type of hostile takeover. A reduced share price makes a company an easier takeover target. When the company gets bought out (or taken private) - at a dramatically lower price - the takeover artist gains a windfall from the former top executive's actions to surreptitiously reduce share price. This can represent tens of billions of dollars (questionably) transferred from previous shareholders to the takeover artist. The former top executive is then rewarded with a golden handshake for presiding over the fire sale that can sometimes be in the hundreds of millions of dollars for one or two years of work. (This is nevertheless an excellent bargain for the takeover artist, who will tend to benefit from developing a reputation of being very generous to parting top executives). This is just one example of some of the principal-agent / perverse incentive issues involved with takeovers.
CyberNerd Posted January 5, 2012 Posted January 5, 2012 it could be worse, they might get bought by capita! 1
EdWhittaker Posted January 5, 2012 Posted January 5, 2012 RM is not selling off its non-core assets because the share price is low, it's selling them them off because because they have lost a lot of income and future business when the plug was pulled on BSF (and don't get me started on THAT gravy train!). The article I linked to above is reporting the fact (not rumour) that RM was selling off non-core assets.
X-13 Posted January 5, 2012 Posted January 5, 2012 RM is not selling off its non-core assets because the share price is low, it's selling them them off because because they have lost a lot of income and future business when the plug was pulled on BSF (and don't get me started on THAT gravy train!). The article I linked to above is reporting the fact (not rumour) that RM was selling off non-core assets. Exactly. They're selling off the bits they don't want/need. It doesn't mean they're in trouble. But people claim that's what it means, which worries some shareholders enought for them to sell shares, which drops the price, which gets RM into trouble.
MK-2 Posted January 5, 2012 Posted January 5, 2012 Exactly. They're selling off the bits they don't want/need. It doesn't mean they're in trouble. But people claim that's what it means, which worries some shareholders enought for them to sell shares, which drops the price, which gets RM into trouble. Exactly...... http://furiousfanboys.com/wp-content/uploads/2011/04/Family-Guy-Beacons.jpg
EdWhittaker Posted January 5, 2012 Posted January 5, 2012 Exactly. They're selling off the bits they don't want/need. It doesn't mean they're in trouble. But people claim that's what it means, which worries some shareholders enought for them to sell shares, which drops the price, which gets RM into trouble. RM is a large, multinational company. Over 60% of its shares are held by institutional shareholders like Aviva, Standard Life, Legal and General, Schroder Investment Management etc. The idea that these hard-headed fund managers can have their investment decisions based on anything other than hard facts is fanciful. RM themselves have issued a profits warning - fact. RM have disposed of assets - fact. RM have had a board reshuffle and taken on Andrew Adonis as non-exec - fact. Companies absolutely do not issue profit warning lightly. The share price has fallen because of these facts, not because of rumour. I rest my case, m'lud.
localzuk Posted January 5, 2012 Posted January 5, 2012 Like many companies in the last 10 years, RM 'diversified' too much. They sort of lost sight of what they do best and tried to be everything to everyone. They need to trim the fat, and get back to their core business. Much like Motorola.
irsprint84 Posted January 5, 2012 Posted January 5, 2012 Like many companies in the last 10 years, RM 'diversified' too much. They sort of lost sight of what they do best and tried to be everything to everyone. They need to trim the fat, and get back to their core business. Much like Motorola. I disagree to a point look at AOL! RM had its time, its holding onto legacy schools I d guess it hasnt took on many new schools for a while plus with the BSF starting a year before elections they took a massive gamble
localzuk Posted January 5, 2012 Posted January 5, 2012 I disagree to a point look at AOL! RM had its time, its holding onto legacy schools I d guess it hasnt took on many new schools for a while plus with the BSF starting a year before elections they took a massive gamble RM are an IT solutions provider. They took on cashless caterers, software makers, low end device/software sellers (TTS) etc... All of these are not core to their business. RM are not just a 'CC3/CC4' provider, and never were really. So, their business should be back to getting schools to do their IT as a whole - ie. cabling, AV, machines, servers, licensing. Extra bits like those peripheral companies are overdiversified. That service is what many schools, especially primaries, want. AOL didn't modernise at all, they stuck to exactly what they'd always done, but they are a very different company in a very different market. I don't say diversifying in itself is bad, but doing too much of it can water down the company's direction and reduce overall performance from the different areas of the business. It really depends on what the core business is and what realistic growth you can expect. Look at BT, they got rid of BT Cellnet/O2 just as the phone market got competitive. So, they did the opposite to what they should have IMO, especially in light of the fact that the landline market was heading towards liberalisation at the time and therefore potential growth and profits in that area were forecast to stagnate somewhat.
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