Interim Management Statement

RNS Number : 0838M

Tribal Group PLC

18 May 2010

 



18 May 2010

Tribal Group plc

Interim Management Statement

Tribal Group plc (Tribal), a leading provider of public sector services in the UK and internationally, provides the following update on trading, covering the period from 1 January 2010 to date.  

Trading in the early months of the year has been as anticipated.  Revenue for the four months to 30 April 2010 was ahead of the comparable period last year in our Education and Health businesses.  Revenue in our Government business was, as expected, behind last year, reflecting the impact of the general election on our advisory markets.

During the period, we have secured a number of new contracts and extensions.  These include the five year, £64 million award by Ofsted to manage inspection services for early years providers announced in February, a new £4.2m adult careers service contract, the renewal of our £3m schools 'value for money' contract with the Department for Education and an extension of our commissioning work with Primary Care Trusts in the South of England worth £1.2m.  We have also made good progress overseas in our Education and international development businesses.

Our committed income levels have risen significantly during the period.  At the end of April, committed income stood at £278m, an increase of 28% since the start of the year.  At 1 May 2010, we had delivered or secured 68% of our planned revenue for the year (2009: 65%).

We are increasingly focusing our sales and business development effort on growing our service delivery and technology offerings and developing our international activities.  Our underlying sales pipeline remains encouraging.

Our programme of cost reduction announced in October last year is now largely completed and will deliver annualised cost savings in excess of £7.5m.  We are continuing to focus closely on operational performance and to identify further opportunities to reduce costs and enhance margins.  Since the start of the year, we have completed the reorganisation of our Government business and we expect to see the benefits of operating with a lower cost base and a fully integrated business model in the second half of the year. 

At the end of April, net debt was below £26m. Tribal remains securely financed with total bank facilities of £48m, of which £40m are committed until June 2012.  Our capital reduction plans announced in March are now well-advanced and we will be seeking shareholder consent to our plans at our Annual General Meeting (AGM) on 20 May 2010.  

As previously announced, John Ormerod will become Chairman of Tribal following the AGM.  We are pleased to announce the appointment of Simon Ball as a new, independent non-executive director from 1 June 2010.  Simon will also become Chairman of the Audit Committee and a member of the Remuneration and Nomination Committees from the same date.  Simon is currently Deputy Chairman and Senior Independent Director of Cable & Wireless Communications Plc, having previously served as a non-executive director of Cable and Wireless plc.  He has considerable experience of both the private and public sectors.  Simon was Group Finance Director of 3i Group Plc between 2005 and 2008. Prior to this, Simon held a series of senior finance and operational roles at Dresdner Kleinwort Benson, served as Group Finance Director for the Robert Fleming Group and was Director General, Finance for the Department for Constitutional Affairs between 2003 and 2005. He was also previously a director of Leica Geosystems AG.  No further information is required to be disclosed pursuant to LR 9.6.13 R.

We are continuing to explore the strategic options for each of our three Support services businesses and we will provide a further update on progress in due course.

Peter Martin, Chief Executive, commented:

"A key priority for the new government will be to reduce the budget deficit and reform of the public sector will remain a key plank of policy.  With our focus on service delivery, advisory and technology solutions that improve the delivery of public services, Tribal is very well-positioned to support public sector organisations as they undertake change and to participate in an expected acceleration of outsourcing opportunities that will contribute to the improvement in public sector efficiencies.

"We continue to anticipate that softer conditions in our advisory markets will result in the financial performance in the first half of the year being behind the comparable period last year and that the significant increase in committed income and the benefits of our cost reduction programme should support a stronger second half and our expectations for the full year outcome." 

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For further information, please contact:  

Tribal Group plc                                                                                 Telephone: [phone]  

Peter Martin, Chief Executive  

Steve Breach, Group Finance Director  

Weber Shandwick Financial                                                             Telephone: [phone]

Nick Oborne

Stephanie Badjonat

Clare Thomas                                        

Editors' note:  

Tribal is a leading public sector services company.  We provide service delivery, advisory and technology solutions focused on improving the quality and effectiveness of public services in the UK and internationally. Tribal's core markets are education, health and government.  

Our people are sector experts and we work in partnership with a wide range of organizations, including schools, hospitals, local authorities, housing associations and government departments. Tribal has over 2,000 staff and our work spans 40 countries across the world. Tribal's shares are quoted on the London Stock Exchange (TRB). Links: Tribal Group plc website: www.tribalgroup.com.

 

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