There's definitely potential in educational apps business RM (RM.), the struggle is extracting it in a meaningful way. You possibly already understand the whole issue with previous government's failed 'Building Schools for the Future' (BSF) programme in the early 2000's, if not, there's a handy box explaining it in brief below.

We've said before that CEO David Brooks' strategy of flogging its hardware business added up, yes, it provided some vanity revenue, but precious little profit. But we've had two summers and two winters since, and not much has happened, nor does that look like changing.

RM chart

The company switched nomad last year, neither Peel Hunt nor Numis Securities was able to drum uip investor interest in the company or the stock, now it's FinnCap's turn to wave a flag, but I don't fancy the chances of analyst Harold Evans. Even he cannot see anything better than flat progress (at best) in the foreseeable future, just look at these desperate forecasts.

Clinging to that attractive dividend looks about the only reason to own the shares,


Perhaps the best thing for RM and its rather beleaguered shareholders would be to hitch itself to a bigger learning tech business, because going it alone sure hasn't worked so far.

RM books kids reading

What was Building Schools for the Future?

The Building Schools for the Future (BSF) programme was the last Labour government?s £55 billion grand plan to rebuild every secondary school in England. Announced by Tony Blair in 2004, the programme was about much more than replacing classrooms with leaking roofs or buildings with crumbling brickwork, it was designed to spark a step-change in children?s education.

Not only were pupils to be provided with inspirational buildings that made them feel valued and worthwhile, but they were to be given access to new ways of learning fit for the 21st Century, involving state of the art computer technology and learning space lay-outs, turning old fashioned classrooms into modern wi-fi enabled learning hubs, with students using their own laptops and tablets to carry out independent research and study.

The BSF programme was finally scrapped in 2010 by then Conservative education minister, Michael Gove.

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Issue Date: 03 Feb 2016