Trading Statement
Tribal Group PLC
25 April 2007
25 April 2007
Tribal Group plc ('Tribal Group' or the 'Group')
Trading Update Statement and Management Changes
Trading update
Tribal Group plc, one of the UK's leading consultancy and professional support
services companies, issues this statement as an update on trading for the year
ended 31 March 2007. The Group's preliminary results will be announced on 4 July
2007.
The board reports a stronger trading performance for the Group in the second
half of the year. Excluding the forecast profit from the Peterborough PFI
hospital scheme, which is now expected to reach financial close during the
summer, we expect adjusted profit before tax and eps for the year to be
comfortably in the range of market forecasts, having fully absorbed the costs of
discontinued businesses and restructuring. Gross revenue exceeded £230m.
Cash generation in the second half was excellent and net debt at the year end
was approximately £57m. Operating profit to cash conversion was over 130%.
The sale of the Group's healthcare delivery business, Mercury Health, to Care UK
Plc was completed on 20 April 2007. The disposal of Mercury Health is a very
successful outcome for the Group enabling us to crystallise the value of the
business and substantially reduce our borrowings. The gross sale proceeds were
£77m, which after deduction of debt and costs, equates to net cash proceeds of
£52m. The profit on disposal was £27m. Following the sale of Mercury Health,
Tribal Group's balance sheet is substantially strengthened with pro forma net
debt reducing to well below £10m.
Throughout the year, we saw strong markets in education, housing and central
government. After a slow start to the year, we have recently seen better market
conditions in health and local government.
Our education division has continued to grow revenue and profits. Tribal is very
well placed in the education and learning market and is winning an increasing
number of significant longer term contracts.
The performance of our consultancy services business was disappointing for the
year as a whole, impacted by market weakness in the early part of the year in
the specific areas of healthcare staff supply, local government consulting and
healthcare PFI. Trading did, however, improve in the second half.
We have made significant reductions to our cost base in consulting services,
exiting peripheral and underperforming businesses and substantially reducing
headcount. We have also made further progress in rationalising our support
infrastructure and achieving benefits from our procurement strategy. We expect
to see the benefits of these changes in the current financial year.
Following the sale of Mercury Health, the Group continues to focus on the
development of our core consulting, support services and emerging service
delivery businesses.
Management changes
Tribal also announces today that Henry Pitman, Tribal Group's founder, has
decided to stand down as Chief Executive with effect from 4 June 2007. He will
remain on the Board as a non executive director. The Board is pleased to
announce that Peter Martin will be appointed as the new Chief Executive with
effect from that date. Peter is a Group executive director who has been involved
with Tribal Group since 2000. He initially led the Group's acquisition and
development strategy and, since early 2004, was Chief Executive of Mercury
Health, until its recent sale.
Simon Lawton will continue as Group Finance Director, a position he has held
since 1999. They will be joined on the executive management team by Jim
Chambers, the current Chief Executive of the education and technology division,
who will become Chief Operating Officer.
The Board would like to thank Henry for his enormous contribution to Tribal
Group over the last seven years during which time Tribal Group has become one of
the major providers of consultancy and outsourced services to the UK public
sector.
Outlook
With record committed income, in the continuing business, of £131m, the Board is
confident about the Group's prospects in the current year and beyond.
End
For further information contact:
Henry Pitman, Chief Executive, Tribal Group plc Tel: 01285 886020
Simon Lawton, Group Finance Director, Tribal Group plc Tel: 01285 886020
Peter Martin, Chief Executive designate, Tribal Group plc Tel: 01285 886020
Colin Browne, Maitland Tel: 020 7379 5151
A presentation will be made to analysts and investors at 9am on 25 April 2007
and a copy of this will be made available later that morning on the Tribal Group
website.
Editors' note:
Tribal Group plc provides a range of consultancy and support services to the UK
public sector. The Group's core markets are in education; local government,
housing and regeneration; health and social care; and central government. The
Group employs 2,000 staff in the UK. Tribal is quoted on the London Stock
Exchange (TRB.L).
Links: Tribal Group plc website: www.tribalgroup.co.uk
This information is provided by RNS
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