Last checked at 24 Jun 2020 07:00
24th June 2020
Tribal Group plc
("Tribal" or "the Group")
Business Update
Tribal (AIM: TRB), a leading provider of software and services to the international education market, today provides an update with regards to its trading for the current financial year ending 31 December 2020.
The Group expects results in the current year to be in line with market expectations, with revenue expected to be in the region of £70m, and Adjusted EBITDA1 of approximately £13m. Expenditure and cash have been tightly managed with collections stronger than forecast; net cash at 22 June 2020 was £7.2m. Net cash at the end of the first half is expected to be slightly lower than HY2019having fully paid all tax deferrals that were permitted by the UK and Australian governments in relation to COVID-19.
The Group has responded well to the challenges brought by COVID-19, benefitting from the strong annual recurring revenues that have been a key area of growth in recent years. Annual renewals of Support & Maintenance and Cloud Services contracts, which accounted for c50% of FY2019 revenue, have continued with no noticeable attrition. The Group continues to deliver existing software implementation projects globally with minimal interruption, with Tribal and its customers adapting their working practices to a remote delivery model quickly and successfully.
The existing sales opportunities have continued towards closure, and we are pleased to announce that the Group recently won a new five year contract for a full SITS implementation at Chartered Accountants Australia New Zealand (CAANZ) with a TCV of AUD3m. The pipeline of sales opportunities remains strong, with increasing interest from universities and colleges in moving to the Public Cloud, adopting Dynamics CRM and Engage (student engagement) mobile solution. Sales cycles have however lengthened, particularly in Higher Education, as customers consider their future budgets in light of the current uncertainty around student numbers for the 2020/21 academic year.
Education Services (ES) has continued to deliver the training and improvement contracts in the UK and US, with a rapid move to online and remote delivery. As previously announced, the Middle East schools inspections which account for approximately one third of ES revenue have paused for the current academic year due to school closures; we expect the work to resume for future academic years when the schools re-open. Surveys and benchmarking assessments have continued but at lower levels and our International Student Barometer in the Southern hemisphere has been delayed to 2021. ES however remains profitable albeit at a lower level than 2019.
The Group expects to announce its half year results on 13th August 2020.
Mark Pickett, Chief Executive Officer of Tribal, commented:
"I'm pleased with the resilient performance Tribal has shown against the challenging backdrop of COVID-19. We have managed our cost base tightly to preserve cash and have quickly adapted our working methods to deliver our services remotely to ensure and 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.
I would like to thank our staff for their continued commitment and support during this period."
1 Adjusted EBITDA is in respect of continuing operations excluding restructuring costs and share based payments
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Tribal Group plc | Tel: 0117 311 5293 |
Mark Pickett, Chief Executive Officer Paul Simpson, Acting Chief Financial Officer |
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Investec Bank plc | Tel: 020 7597 5970 |
Sara Hale Virginia Bull Will Godfrey
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N+1 Singer Capital Markets Limited
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Shaun Dobson Tom Salvesen Alex Bond |
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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.
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.