NTU Contract Update and Trading Outlook
1 December 2022
Tribal Group plc
("Tribal" or the "Company")
NTU Contract Update and Trading Outlook
Tribal (AIM: TRB), a leading provider of software and services to the international education market, today provides an update on the Nanyang Technology University ("NTU") contract and Group trading for the year ending 31 December 2022 ("FY22").
NTU Contract Update
Trading for FY22, excluding the NTU contract, is in line with Board expectations. However, the issues flagged within the Group's Interim Results regarding the changes to the scope and delays to implementation and delivery of the NTU contract have continued, resulting in substantially increased ongoing costs and lower recognisable revenue in FY22 than originally anticipated. Consequently, the NTU contract is now expected to generate a loss of c£12m over the life of the contract. Commercial discussions are ongoing with NTU to determine the level of additional revenue due to Tribal in relation to these scope changes and resultant delays to delivery and implementation. These discussions are unlikely to be resolved this financial year.
As a result, the Board now anticipates a negative impact on EBITDA for FY22 of approximately £9m. Therefore, while a continued positive sales performance means Group revenue for the year is expected to be in line with Board expectations, EBITDA will be substantially below for FY22.
The NTU contract combined with extra cost and wage inflation is expected to reduce anticipated EBITDA performance in the year ending 31 December 2023 by c£4m.
Contract Wins
Tribal continues to sign contracts with both new and existing customers, including a seven year SITS:Vision contract with the University of Plymouth, a five year Cloud contract with the University of East Anglia, an existing customer, and a four year Semestry contract with the University of Birmingham. Together, these contracts have a total value of £8.3m, adding £1.1m in incremental Annual Recurring Revenue.
The Board continues to expect the Company to close FY22 with a reduced net debt position, remaining comfortably within the Company's current banking facilities.
The Company will provide a further update on trading for FY22 in January 2023.
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
Enquiries:
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Tribal Group plc |
Via Alma |
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Richard Last, Chairman |
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Mark Pickett, Chief Executive Officer
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Diane McIntyre, Chief Financial Officer |
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Investec Bank plc (NOMAD & Joint Broker) |
Tel: +44 (0)20 7597 5970 |
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Virginia Bull, Will Godfrey, Nick Prowting |
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Singer Capital Markets Limited (Joint Broker) |
Tel: +44 (0)20 7496 3000 |
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Shaun Dobson, Tom Salvesen, Alex Bond
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Alma PR |
Tel: +44 (0)203 405 0205 |
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Caroline Forde, Hannah Campbell |
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About Tribal Group plc
Tribal Group plc is a pioneering world-leader of education software and services. Its portfolio includes Student Information Systems; a broad range of education services covering quality assurance, peer review, benchmarking and improvement; and student surveys that provide the leading global benchmarks for student experience. Working with Higher Education, Further and Tertiary Education, schools, Government and State bodies, training providers and employers, in over 55 countries; Tribal Group's mission is to empower the world of education with products and services that underpin student success.
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