Update, board changes & inves
Tribal Group plc
Trading update, board changes and investor presentation
Tribal Group plc ("Tribal" or the "Group"), a leading provider of professional services to the public sector in the UK and internationally, provides the following update in advance of the preliminary announcement of its results for the year ended 31 December 2009 on 23 March 2010.
Current trading
The Group had an encouraging end to the year. The Board now expects that underlying profit before tax for the year ended 31 December 2009 (see Note) will be slightly ahead of the prior year. The Group's effective tax rate is expected to be lower than the prior year.
At 31 December 2009, Tribal had approximately 42% of 2010 planned revenue already committed, with total committed income standing at £217m (31 December 2008: £139m). The sales pipeline at the end of the year totalled £284m (31 December 2008: £297m). In the past three months, the Group has secured a number of important contract wins.
In Education, we have signed a significant extension to our contract to supply the University of Sydney with a new student management system. The total value of the contract will now be £10m over five years.
In Health, we have won several new commissioning contracts, including a major contract with South Central PCT Alliance, worth more than £20m over four years, to support nine primary care trusts in delivering significant productivity savings.
In Government, we have secured a contract with the States of Guernsey worth £3.5m to support the delivery of cost efficiencies and service improvements over the next five years. We have also been successful in renewing our Buying Solutions framework contracts for advisory work across all sectors of government in the UK.
Our architectural design business has been appointed as design lead for the new £840m South Glasgow Hospital campus. Our fees for this project will be more than £15m over five years.
Strategic developments
We have implemented our new corporate structure which will improve the market focus and productivity of our activities. Tribal now operates through four business streams: Education, Health, Government and Support services.
As previously announced, we have completed the acquisition of the outstanding minority interests in our central government advisory practice and our international development business, Tribal HELM. As a result, Tribal now has no remaining deferred consideration or earn-out arrangements and wholly owns all of its principal subsidiaries.
We have completed the closure of our regeneration activities. In addition to the restructuring costs of £1.1m reported in the half year results, exceptional restructuring costs and trading losses after tax associated with the closure totalled approximately £3.1m and related goodwill of £4.0m has been written off.
We are undertaking a review of the carrying value of other goodwill on our balance sheet and will provide further detail in our preliminary statement on 23 March 2010.
We expect our cost reduction programme to realise higher cost savings than originally anticipated. Total annualised savings will now not be less than £7.5m, of which approximately £5m will be realised in 2010. The exceptional costs of approximately £2.5m associated with the programme will be expensed in 2010.
Financial position
The underlying cash performance of the Group during 2009 was strong with operating cash conversion in excess of 125%. Net debt was less than £28m at 31 December 2009. Tribal has total bank facilities of £46m, of which £40m are committed until June 2012.
Board changes
Strone Macpherson, Chairman of the Board, has informed the Board of his intention not to seek re-election at Tribal's Annual General Meeting in May. The process to appoint a successor is underway and a further announcement will be made in due course. John Ormerod, currently Non Executive Director and Chairman of the Audit Committee, has been appointed Deputy Chairman with immediate effect.
Outlook
During 2010, we will face a general election in the UK but the priority for any new government will be the need to develop and implement credible plans to reduce the high levels of government debt. The requirement for the public sector to reform and change will continue to increase, creating opportunities for organisations such as Tribal that are able to offer innovative and cost-effective solutions, particularly in areas such as education and health that will remain policy priorities.
Whilst some of our advisory markets will remain challenging in the coming months, the actions that have been taken to rationalise the corporate structure, close under-performing activities and reduce operating costs, have strengthened Tribal's competitive position both in the UK and internationally. Recent contract wins reflect Tribal's strong market positions in its chosen sectors and the Board is encouraged by the levels of committed income and is confident that the Group can continue to make progress during 2010.
Investor presentation
Tribal is today hosting a briefing event for analysts and institutional investors at the offices of Weber Shandwick Financial in London. The event will focus on the Group's core education, health and government services public sector markets, providing an overview of our approach to these markets and the growth opportunities they offer Tribal both in the UK and internationally. The briefing will also provide the opportunity for analysts and investors to meet Tribal's senior management team and learn more about our operations in these key markets. No material new information about Tribal will be disclosed. A copy of the presentation will be available today on our website at 10.30am: www.tribalgroup.com
Note: Underlying profit before tax (2008: £17.8m) is before restructuring costs; the results of discontinued operations; intangible asset amortisation and impairment charges; and financial instrument charges. Restructuring costs of £1.1m (2008: £nil) were reported in the half year results. The regeneration activity will be reported as a discontinued operation (2009 loss: £1.1m, 2008 profit: £0.8m).
End
For further information, please contact:
Tribal Group plc Tel: 020 7323 7100
Peter Martin, Chief Executive
Steve Breach, Group Finance Director
Weber Shandwick Financial Tel: 020 7067 0700
Nick Oborne
Stephanie Badjonat
Clare Thomas
Editors' note:
Tribal provides professional services focused on improving the delivery of public services in the UK and internationally. Our core markets are education, health and government. Tribal employs over 2,300 staff and its 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. 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.
This information is provided by RNS
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