RPMGlobal Faces Transitional Challenges as Advisory Business Exits
RPMGlobal Holdings reveals a significant reduction in corporate costs for FY2026 following the divestment of its Advisory business, setting the stage for a leaner operational focus on its core software segment.
- Annual corporate costs expected to drop from $15.8M to $11.3M in FY2026
- Public company compliance costs remain stable at $2.7M
- Significant decreases in financial reporting, office lease depreciation, and other corporate expenses
- FY2025 treated as a transitional year with no full-year guidance
- Detailed Software business performance and FY2026 guidance to be provided in August 2025
Context of the Divestment
RPMGlobal Holdings Limited (ASX: RUL), a leader in mining software solutions, has provided an update on its corporate cost structure following the sale of its Advisory business to SLR Consulting Pty Ltd in early April 2025. This divestment marks a strategic shift for RPMGlobal, focusing its resources and operational efforts more tightly on its core software business.
The sale, initially announced in February 2025, led RPMGlobal to withdraw its FY2025 financial guidance due to uncertainties around the transaction's timing and impact. Now, with the deal completed, the company has outlined its expectations for a leaner cost base starting from July 1, 2025.
Projected Cost Savings and Breakdown
RPMGlobal anticipates its annual corporate costs will fall by $4.5 million, from $15.8 million before the sale to $11.3 million in FY2026. This reduction is driven by several factors: a decrease in financial reporting expenses from $3.2 million to $2.7 million, a drop in depreciation on office leases from $3.0 million to $1.7 million, and a significant cut in other corporate costs, from $3.9 million to $1.6 million, now largely reallocated to the software business.
Interestingly, public company compliance costs, including board and audit expenses, are expected to remain steady at $2.7 million, reflecting ongoing regulatory and governance obligations. Third-party software and technology costs are also forecasted to decline modestly, from $1.5 million to $1.3 million.
Implications for FY2025 and Beyond
The current fiscal year remains transitional, with RPMGlobal opting not to provide full-year guidance. Instead, the company plans to deliver a detailed analysis of the software business’s underlying performance alongside FY2026 guidance in August 2025. This cautious approach acknowledges the complexities introduced by the divestment and the transitional services agreements with SLR Consulting.
Additionally, the potential earnings under the corporate executive incentive pool have been adjusted downward from $1.5 million to $1.2 million following the divestment, with no amounts earned to date. This reflects the company’s recalibrated cost and performance expectations post-sale.
Strategic Focus on Software Business
By reallocating $1.6 million of corporate costs to the software segment and reducing overall expenses, RPMGlobal is signaling a sharpened focus on its software solutions, which have been the company’s core strength for over five decades. This realignment could enhance operational efficiency and profitability, positioning RPMGlobal to better serve its global mining clients with innovative technology and professional development services.
Bottom Line?
RPMGlobal’s streamlined cost structure post-divestment sets a clear path toward renewed focus and potential growth in its software business.
Questions in the middle?
- How will the transitional services agreements with SLR impact RPMGlobal’s operations and costs in FY2025?
- What specific performance metrics will RPMGlobal highlight in its August 2025 software business update?
- Could further divestments or restructuring be on the horizon to optimize RPMGlobal’s cost base?
