Hello, and welcome to RM's half year results for 2024. My name is Mark Cook, Chief Executive Officer, and I'm joined by Simon Goodwin, Chief Financial Officer. The agenda for today is split into three segments. Firstly, I will give an overview of the first half. Simon will then cover the financials in more detail, and I will follow with an update on RM's strategy and operations. It is now only three calendar months since I updated on our FY 2023 full year results, where I promised to focus on looking forward and not backwards, and launched our strategic intentions. Since that update, we have made good progress in the first half of 2024 on our strategic execution and assessment contract growth. Overall, the first half of FY 2024 has produced a good strategic performance, significant growth in contracted order book, which signals well for future growth.
Good progress on RM strategy execution, the launch of new services, including AI solutions, as per our portfolio roadmap, and further actions on the future operating model and cost reductions. Revenue from continuing operations of GBP 79.2 million, down 9.6%, reflecting the changing shape of our revenue recognition with contracts won during the first half, for which revenue will be recognized in future periods, and closure of the consulting business at the start of the period. Assessment contracted order book has grown by 51% versus the start of the year, reflecting the strategic International Baccalaureate contract win, which bodes well for future growth, as indeed, it is worth highlighting that given our contracts can be lumpy, we would not expect the order book to grow at a similar level period to period.
All three divisions were profitable in the period, and both our adjusted operating profit and EBITDA was significantly better than the prior period, with adjusted operating profit up 86%, aided by further progress on our cost reduction program. Simon will discuss this in more detail in his update. Our net debt at half year was expected at GBP 52.7 million. In terms of our strategic portfolio roadmap announced in March, we have made excellent progress by securing a long-term contract with the International Baccalaureate, as they plan to transform the delivery of their digital assessments. Given that the future of RM is predicated on the development of a global accreditation platform, this contract with IB, as our foundation customer, is probably the most significant milestone in our recent history.
Our assessment sales pipeline has also grown circa 70% in the first half of the year to GBP 170 million, and we look forward to updating you on our progress. In order to better deliver the digital transformation for assessment, we have launched RM Consulting to enable our customers digital journey planning for both general and professional qualifications. Our portfolio roadmap also signaled the launch of next gen managed services in technology, and I'm very pleased to see the green shoots of success with multiple wins in the second half, which will be reflected in our full year results. We have also launched hundreds of new products to market under the TTS brand, and additionally, we have gone live with RM's large language-driven AI model that combines our products with linkages through to the national curriculum.
This AI human hybrid interface embodies our 50 years of pedagogy, knowledge, and experience, combined with our physical resources that are specifically linked to the educational curriculum content, and we see this as a real USP for RM. I will now hand over to Simon, who will take you through our financial performance for the half.
Thank you, Mark. Moving on then to a more detailed financial summary of the year. Before I begin, I'll just take a second to explain that our headline numbers do still include the Consortium business as a continuing operation. Although we announced in November 2023 our intent to close Consortium, it continued to trade through early December. Headline revenues fell 9.6% to GBP 79.2 million, and like-for-like revenue, excluding Consortium, is down 3.2% to GBP 78.3 million. This decline is explained by several factors. In our assessment business, there was an expected and natural decline as customer-specific legacy projects, such as the Department for Education's National Pupil Data Achievement and Attainment project, as well as the Cloud Connect Plus contract for one of our global accreditation customers, both continued to wind down.
Within the assessment division, this decline was almost entirely offset by growth in underlying contracted revenues of +11.1%. Elsewhere, we continued to be impacted by competing demands for budget expenditure within the U.K. schools market, which experienced further uncertainty in the run-up to the election, causing pauses to some spending decisions. In spite of this, TTS gained U.K. market share and technology revenues stabilized during the period. TTS international revenue also declined in the period, but we have a strong order book of deals to recognize in Q3 and a pipeline giving us confidence of a return to growth by the year-end. Significant assessment contract wins, such as the IB digital contract, reflect the move towards longer-term recurring revenue from our global accreditation platform, with contract order book and assessment up 51% to GBP 66.9 million since the start of the year....
Adjusted operating profit was a small loss of GBP 0.6 million, equating to an adjusted EBITDA profit of GBP 1.9 million, an improvement of GBP 3.4 million on last year. This improvement reflects our decision to close the loss-making Consortium business, and our focus on reducing costs through operational efficiency. We incurred GBP 3.1 million of exceptional costs, largely relating to restructuring initiatives, property rationalization, where we closed our small London office and reduced floor space in our Abingdon head office, as well as third-party advisory fees on strategic projects. Adjusted net debt of GBP 52.7 million was better progress than expected, while also reflecting our normal lower operating cash weighting in H1, due to the school year and exam cycles. On the next slide, we show a summary income statement for the first half year of 2024.
We previously noted the revenue and adjusted operating profit figures from continuing operations. Net finance costs include debt facility interest charges, and net finance income from our DB pension schemes. We have also included details of the progress we have made on our annualized cost savings. The GBP 10 million of savings identified in FY 2023 have now been delivered. In addition, there is GBP 2.7 million of annualized savings in overhead associated with the closure of The Consortium, GBP 2.8 million relating to further headcount reductions, and GBP 0.9 million of other third-party cost reductions as we move towards our new target operating model. GBP 0.3 million of annualized property savings from the London office closure were confirmed in H1, with more to follow from the Abingdon office in H2.
Also included on this slide is a full breakdown of the net GBP 3.4 million of adjusting items. This includes GBP 1.2 million relating to property provisions and impairments as we exit unrequired properties in advance of the contractual breakpoints, GBP 0.6 million of restructuring costs associated with the headcount reductions, and GBP 1.2 million relating to third-party fees on projects such as the closure of Consortium, TTS warehouse consolidation, and other strategic initiatives. Turning to adjusted revenue, here we bridge our decrease compared to the first half of FY 2023, with the most significant factor by far being the GBP 6.7 million revenue reduction from the cessation of trade on Consortium on the 8 of December.
During the period, assessment revenue was broadly flat year-on-year, with a decline in revenue from legacy customer-specific projects being offset by growth in underlying long-term contracted revenue. As I referenced on my opening slide, new contract wins and assessment will largely only be recognized as revenue once customers start to receive services from our global accreditation platform. It is worth noting that the significant wins announced in H1 have had minimal impact on revenue in this period, but they will influence growth in the future. This dynamic has contributed to the 50% increase in order book of future revenues since the start of the year. TTS U.K. revenue was + 0.4% on prior year, outperforming its competitors, resulting in market share growth within a continuingly challenging U.K. schools market.
TTS International declines due to being more reliant on fewer, larger value deals, which this year will be more weighted to the second half. In addition, our order book of unrecognized, but confirmed orders increased at the end of the period, as a material value of orders received at the end of the period were not able to be shipped before the half closed. Technology was down 2.4% on prior year, with school budgets continuing to be tight and further uncertainty in the lead-up to the U.K. election. At the beginning of the period, we launched our next-gen managed services portfolio, which has resulted in an increase in contract wins later in the half, which have also not contributed to revenue during H1.
On this slide, we bridge our adjusted operating loss movements against half year 2023, which was up from a loss of GBP 4.5 million last year to a small loss of only GBP 0.3 million this year, excluding Consortium. Again, we have shown last year's Consortium losses of GBP 6.1 million falling away, which is a big contributor to our improvement. All three of our primary trading divisions were profitable during H1 FY 2024, with some structural changes impacting movements year-on-year. Assessments underlying profitability actually increased by GBP 1 million year-on-year on flat revenues because of the improved operational efficiency.
However, the division now takes a much larger share of allocated central overhead due to its increased size and significance to the group, resulting in a reported statutory operating profit of GBP 2.3 million, which was a reduction of GBP 0.9 million year-on-year. TTS now includes 100% of our Harrier Park warehouse costs, previously occupied by and reported within the results of the Consortium business. The benefits of the warehouse consolidation project will largely impact from H2, so for the majority of H1, the PNL of the TTS business includes costs for both warehouses. Despite this, TTS still reported a small profit in the first half. Underlying TTS profitability benefited from higher gross margins as it maintained prices in the face of strong competition, while also growing market share.
However, a larger share of central overheads were also allocated to TTS due to the closure of Consortium. Technology continues to perform well on the back of previous actions to increase efficiency and to remove loss-making contracts. The division reported a profit of GBP 0.8 million in H1 FY 2024, compared to a GBP 0.5 million loss in the same period last year. Unallocated corporate costs increased largely due to accounting for long-term management incentives and share schemes not in place at the same point last year. On this slide, I will take you through the key drivers of our cash flow in the period, focusing on the impact on adjusted net debt.
H1 2024 saw more normal levels of operating cash flows and working capital movements compared to the significant one-off swings and adjustments in the same period of FY 2023, as we have continued to put the business on a more stable footing. As expected, capital expenditure has increased as the business invests in the development of our global accreditation platform. This increased level of investment is expected to continue into H2 and FY 2025, but is more than supported by the contract wins already announced. Defined benefit pension contributions of GBP 2.1 million in H1 are in line with previous agreements for scheme trustees. These current contribution levels cease at the end of FY 2024 and are much reduced going into FY 2025 and beyond.
Interest and financial fees paid of GBP 3.2 million are elevated due to the higher average net debt over H1, and also includes facility arrangement and commitment fees linked to the amendment and extension of our GBP 70 million banking facility until July 2026. Moving on to the financial outlook to the end of FY 2024. First half performance was strong and in line with our expectations for profitability and net debt. Second half revenue is expected to significantly outperform H1, in line with historical seasonality, which is linked to the timing of global exam sessions and U.K. back-to-school trading. We also expect that the certainty of government post the U.K. election should enable schools to have more clarity about their spend priorities.
The GBP 6.6 million of identified cost savings initiated during H1 will start to have an increasingly significant impact on profitability from H2 and into FY 2025. On top of this, we will initiate further savings in the second half as we continue to target a total of GBP 10 million of additional annualized cost savings identified this year in the move towards our new target operating model. An accelerated move towards longer-term, recurring, platform-generated revenues away from our more traditional customer-specific, project-based revenue streams in assessment, means that our full-year outlook for revenue is now expected to be broadly flat year-on-year, as we adapt to the changing requirements of revenue recognition on these types of contracts. This is not expected to have a further impact on cash flows and net debt. Our expected adjusted operating profit for the full year remains in line with market expectations.
We fully expect to operate within our agreed banking covenants and, as I said at the start of the year, taking into account the increased capital expenditure required to fund our future growth plans, plus continuing interest payments and committed pension contributions, we are not expecting material change to the net debt position at the end of this financial year compared to last year. Now I would like to pass you over to Mark, who will take you through the forward-looking slides.
Thank you, Simon. Our transformation in RM continues as we move from the turbulence of the stabilization phase into the more stable value creation phase. We are increasing our understanding of the market dynamics in the edtech sector with the needs of our customers, educators, accreditors, and learners, coupled with RM's market-leading IP in educational resources and solutions in order to drive better outcomes for learners. For example, these dynamics will include how to make teachers' time more productive by examining what are the non-value-added activities in a teacher's day that could be better served with their pupils. We also believe the TTS business has strong recognition as a market leader in early years. RM technology in primary and with RM assessment business in secondary and beyond into adult professional services.
For example, we make good use of our position to drive better outcomes in early years, specializing in science, technology, English, mathematics, and special educational needs and disabilities. In assessment, we will drive more solutions in the learning lifecycle of formative assessment, module and mock testing with live feedback, and in technology, delivering next-gen managed services to enable multi-academy trusts to lower their costs, increase capability and experience, and limit exposure to cyber attacks. As a reference point, back to the full-year results, we discussed our strategic pillars. RM has spent the last 50 years in education, and we have five key strengths and USPs to enable our vision, our strategic pillars. We are today a global provider of EdTech products and solutions, and we deliver RM products and solutions to 10 million students, 30,000 schools in 180 countries.
We provide these products and solutions to the entire age range of learners and their lifetime of learning. So TTS in early years, technology in primary, assessment, secondary to adulthood. We have customers today that are accreditors, i.e., awarding bodies, educators, such as teachers and schools, and in future, we will deliver learner-direct solutions. Future learner-direct solutions will be delivered on a subscription revenue model to accompany our long-term contractual revenue base. Our reputation as a leading assessment provider will enable the introduction of the new RM Global Accreditation Platform built for scale. We have a pipeline of GBP 170 million for our new platform, with International Baccalaureate as a foundation customer. 50 years ago, we built computers for schools.
Today, 45% of our revenue is our own IP, and in future, this will increase towards 80% by investing in RM colleagues' knowledge, RM products, and RM solutions. An update on the RM portfolio of products and solutions. The white elements of our portfolio roadmap are what we provide today, and we have highlighted in red those which we've progressed since our full year results presentation in March. So platform and solutions to accreditors, educational resources, product to manage ICT services to educators, but nothing directly to learners as yet. New releases in half one have included the start of the global accreditation platform build and contracted order book with the build of our hybrid development center across U.K. and India. The launch of RM Consulting to help customers transform their digital education journey progress.
In the first half, we saw 100 new educational resource products launched via our TTS brand, with 8,000 products being represented by our RM AI Human Education Center interface, which links physical products to the national curriculum. The next proof of concept is to link digital teaching aids, lesson plans, and curriculum content to the physical resources on a subscription basis, and we hope to bring this to market later in FY 2025. Next gen managed services, which is a portfolio approach to managed services in schools, launched in the first half, and we have secured foundation customer wins already in half two, which is very encouraging. StudyKit, helping multi-academy trust and their school pupils becoming digitally enabled, launched, and foundation customer wins. Our mission statement starts with the transformative power of education.
These are the words of the Director General of the IB, Olli-Pekka Heinonen, and I had the pleasure of meeting with him and his team as we discussed extending our long-term relationship. These discussions saw RM and IB as having shared values across education, and I'm delighted that we have announced in the first half, a long-term contract to support IB's move towards fully digital assessment and accreditation. The RM Global Accreditation Platform is being built for growth and scalability, with the new development jobs in our teams in the U.K. to support our global hybrid development operation. IB has nearly 2 million students and 6,000 schools globally and has seen 34% growth over a four-year period.
Over 190,000 of those students received their diploma program and career-related program results last week, and we would like to extend our congratulations to all of those IB graduates. We are therefore delighted that IB's selection of RM as their partner fits perfectly with RM's strategy and portfolio roadmap development to expand the number of concurrent users on our platform and support the digital transformation of assessment and accreditation. We have two important measures to consider as we drive future revenue: pipeline and contracted order book. Pipeline, in our context, is well-advanced opportunities prior to contract completion. Contracted order book is commercially contracted future revenue streams that have not yet flowed through our P&L. RM has three different go-to-market businesses.
A book-to-build model in TTS, where an order is typically dispatched within hours, days of order receipt, and technology, which is a mix of framework, contracted repeatable revenue, historical repeated revenue, and one-off hardware and software project work. Assessment is typically long-term relationships and contracts with predictable revenue streams and an element of volume expansion based on examination volumes and our end customers' expanding customer base. Some of the traditional assessment work was an interim solution step for our customers' own future portfolio roadmap, and this either reaches a conclusion or is insourced by our customers. The new RM portfolio roadmap contains RMIP and is driving solutions towards a global and digital future and will result in revenue mix from being from project-based revenue to long-term recurring contracted revenue.
As a result, RM's contracted order book will grow and strengthen as we build future revenue flows from a healthy pipeline of work. We have talked about a transformation towards a digital education world. This includes digital subscription-based teaching aids, lesson plans, and curriculum materials, and supporting customers on a fully digital assessment and accreditation journey over the coming years. Given RM's experience of these digital transformation journeys, we have launched RM Consulting to help accelerate the pace of change and use technology to drive improvements and innovation. RM has announced a strategic partnership with Searchlight Consulting to help exam assessors and awarding bodies deliver and accelerate their digital transformation journey. This partnership provides a combination of RM's extensive EdTech heritage and digital assessment expertise, and Searchlight's digital transformation design and delivery capabilities. Creating a more sustainable and responsible business is embedded in our ethos.
As such, I'm pleased with several measures as proof points. We carry out regular colleague surveys on important topics, capturing pride, commitment, people attrition, and company referrals. Our half one survey had a high 84% response rate, which was up 4%, and an engagement score of 63, up six points. Almost unilateral improvement, with recognition of executive leadership, communications, understanding of the company direction, company confidence and referrals all improving. New equality and diversity training was carried out, with 88% of our global colleagues completing this work in half one. Environmental and social, we're very pleased to report a 70% reduction in our carbon footprint since the base year, with half one reducing our output by 27%.
Examples of excellent work by our colleagues that we do in the community is our charitable partnership with Second Chance, where we donated laptops and over hundreds of gifts to Barnardo's. In summary, good progress was made on our strategy, execution, and assessment contract growth. A good H1 performance and foundations being put in place to return to growth. Pipeline and contracted order book growth of 70% and 51%, respectively. Traditional project revenue being replaced with long-term contracted revenue. Global accreditation platform wins with foundation customer in International Baccalaureate, and our improvement in profitability by 86%. Half one adjusted operating profit and EBITDA improved by GBP 3.9 million and GBP 3.4 million versus prior year. We made transformation program improvements by identifying GBP 6.6 million of GBP 10 million of cost savings in half one.
All in all, we have a more confident, inspired workforce to deliver an exciting portfolio of new products and solutions. We support 10 million students, 30,000 schools in 180 countries. Our RMIP continues to grow towards our 80% target, and 8,000 educational resources are now live with the first release of the RMAI hybrid solution. We look forward to a further update on our transformation and strategic portfolio development at the full year results presentation.