Tribal Grp. Share News (TRB)

(Sharecast News) - Education software and services provider Tribal Group updated the market on its trading on Wednesday, saying it was expecting results for the year ending 31 December to be in line with market expectations.

It said it was anticipating revenues in the region of £70m, with adjusted EBITDA coming in at around £13m.

Expenditure and cash had been "tightly managed", the board said, with collections stronger than forecast and net cash as at 22 June standing at £7.2m.

Net cash at the end of the first half was expected to be slightly lower than at the same time last year, the company having fully paid all tax deferrals that were permitted by the UK and Australian governments in relation to the Covid-19 pandemic.

The group said it had responded "well" to the coronavirus crisis, benefitting from the strong annual recurring revenues that had been a key area of growth in recent years.

Annual renewals in support and maintenance, and cloud services contracts - which accounted for around 50% of 2019 financial year revenues, had continued with no noticeable attrition reported.

The group said it was still delivering existing software implementation projects with minimal interruption, with Tribal and its customers adapting their working practices to a remote delivery model.

It explained that the existing sales opportunities had continued towards closure, with the board announcing that the firm recently won a new five-year contract for a full SITS implementation at Chartered Accountants Australia New Zealand (CAANZ), with a total contract value of AUD 3m ($1.66m).

The pipeline of sales opportunities remained strong, with increasing interest from universities and colleges in moving to the public cloud, adopting 'Dynamics CRM' and the 'Engage' mobile solution.

Sales cycles had lengthened, however, particularly in higher education, as customers considered their future budgets in light of the current uncertainty around student numbers for the 2020-2021 academic year.

Tribal said education services had continued to deliver its training and improvement contracts in the UK and US, with a "rapid move" to online and remote delivery.

As it had previously indicated, the Middle East schools inspections - which account for around a third of education services revenue - had paused for the current academic year, due to school closures.

Tribal said it expected that work to resume for future academic years when the schools reopened.

Surveys and benchmarking assessments had continued, although at lower levels, and the company's International Student Barometer in the southern hemisphere had been delayed to 2021.

Education services still remained profitable, however, albeit at a lower level than 2019.

"I'm pleased with the resilient performance Tribal has shown against the challenging backdrop of Covid-19," said chief executive officer Mark Pickett.

"We have managed our cost base tightly to preserve cash and have quickly adapted our working methods to deliver our services remotely to ensure an uninterrupted service for our customers.

"We will look to build this flexibility into our ongoing service offerings for the benefit of both Tribal and its customers."

Tribal Group said it expected to announce its half-year results on 13 August.

At 0946 BST, shares in Tribal Group were up 2.55% at 56.4p.