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Long-standing British PC manufacturer RM has announced that following a review of its Education Technology division – the focus of a major rescue plan at the education services provider – it will cease production of PCs.
Its exit from the market brings to an end more than 35 years of PC building by RM, and will see around 300 people, including some temporary staff, lose their jobs in the coming 12 months.
Founded as a mail order components supplier in the early ‘70s, RM expanded into the personal computing market in 1977. In the 1980s – along with rival Acorn – it became a key player in the government’s Microelectronics Education Programme, with models such as the 380Z helping to establish PCs in the nation’s classrooms.
However the business ran into trouble following the 2008 recession and was hit hard by Coalition spending cuts three years ago, especially by the closure of the Building Schools for the Future (BSF) project, and has struggled to regain its footing in leaner times.
In a statement today, RM said that the declining and low margin sale of PC devices was no longer a priority, and that the Education Technology unit will now focus on expanding its existing software and services offering.
The division is expected to see a 50% reduction in sales over the next two fiscal years as a result – although the conclusion of its remaining BSF projects is also a factor in that figure – and will book a one off charge of £10m, which will show up in its fiscal 2013 results due on 30 November.
RM predicted that in 2014, the Education Technology business would trade around breakeven as a result of the timing mismatch between revenue decline and cost elimination, but by 2015, should be delivering much improved margins, albeit still on significantly lower sales.
Despite the sad end to an historic business, RM remains in cautiously optimistic mood, and in an interim management statement last month said it saw a number of successful managed services contracts starting to bear fruit. Its RM Unify cloud platform is performing particularly strongly, and the firm was recently awarded preferred bidder status to provide it to all Scottish schools through 2015.