Tribal Group plc
Trading Update
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Appointment as Preferred Bidder on Student Management System Programme
Trading update
Tribal Group plc ("Tribal" or "the Group"), a leading provider of technology products and services to the education, learning and training markets, provides the following update in advance of the preliminary announcement of its results for the year ended 31 December 2011, which will be released on 22 March 2012.
Current trading
The trading performance of the Group was strong in the final quarter of the year, and adjusted profit before tax for the year ended 31 December 2011 will therefore be significantly ahead of the Board's previous expectations.
Our Technology business traded well during the final quarter of 2011. Changes we made during the second half of the year in our sales and business development capabilities are proving effective. Furthermore, our existing UK customer base has continued to show appetite for upgrades and enhancements to our existing installed student management systems albeit, as previously highlighted, we are experiencing longer purchasing cycles on some higher value contracts. Internationally, we have seen continued demand for our software in New Zealand and Australia, and we have extended the roll out of our student management systems under the previously announced framework agreement with seven polytechnic colleges in New Zealand.
Our Services business, supported by good revenue visibility from our contract base and a close focus on operational efficiency, traded well during the final quarter of 2011.
Across the Group, overheads have remained under tight control, and our cost reduction programme is driving enhancement to our operating margins.
Appointment as Preferred Bidder on International Student Management System Programme
We are pleased to announce that Tribal has been appointed as preferred bidder to supply its student management systems to the Student Administration and Learning Management (SALM) programme currently being implemented by the Department of Education and Communities (DEC) in New South Wales, Australia. The SALM programme will be deployed across the DEC environment in New South Wales.
Subject to conclusion of contractual negotiations, this programme will involve Tribal's student management systems being rolled out, commencing with a series of initial implementations in 2012.
If successfully concluded this contract is expected to have a value in excess of Aus$40m over the multiple year contract term. The contract, if signed, will further underpin our expectations for the medium term.
Financial position
We have focussed closely on improving working capital management across the Group, and net debt at the end of December 2011 was £16m (1 January 2011: £19m). The Group's bank facilities total £40m, of which £30m is committed until 2015.
Outlook
The year ended 31 December 2011 has been a period of considerable change for Tribal. The Group has emerged with a stable financial platform and a streamlined organisational structure. As a result, Tribal is now well positioned to take advantage of opportunities to support education and training providers in the UK and internationally as they seek to adapt to changing market conditions.
Our committed income at 31 December 2011 was £178m (31 December 2010: £186m), and continues to provide good underpinning to our revenue expectations for 2012 and beyond. International demand for our technology products and services continues to grow and the benefits of our cost reduction programmes are now embedded across the Group.
Whilst mindful of continuing uncertain macro-economic conditions, we now plan to increase investment in our sales and business development capabilities in order that we may take better advantage of existing and emerging opportunities. As a result, our overall expectations for 2012 remain unchanged.
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Tribal Group plc | Tel: 020 7323 7100 |
Keith Evans, Chief Executive Officer |
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Steve Breach, Group Finance Director |
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Weber Shandwick Financial Nick Oborne Stephanie Badjonat Robert Cook | Tel: 020 7067 0700 |
Editors' note:
Tribal Group plc (Tribal) is a leading provider of technology products and services to the education, learning and training markets in the UK and internationally.
Our people are sector experts and we work in partnership with a wide range of organizations, including schools, colleges, universities, local authorities and government departments, as well as employers in the private sector. Tribal has over 1,300 staff, and operates in the UK, Australasia, US and Middle East. Tribal's shares are quoted on the London Stock Exchange (TRB). Links: Tribal Group plc website: www.tribalgroup.com
This Statement has been prepared for and is addressed only to our shareholders as a whole and should not be relied on by any other party or for any other purpose. Tribal, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. This Statement may contain forward-looking statements and the financial information is unaudited. Any forward-looking statement has been made by the directors in good faith based on the information available to them up to the time of approval of this Statement and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. To the extent that this Statement contains any statement dealing with any time after the date of its preparation, such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur and therefore the facts stated and views expressed may change. Tribal undertakes no obligation to update these forward-looking statements.
