REG - Tribal Group PLC - Preliminary Results for year end 31 December 2024
27/03/2025 07:15
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RNS Number : 3978C Tribal Group PLC 27 March 2025
Tribal Group plc
("Tribal" or "the Group")
Preliminary Results for the year ended 31 December 2024
Tribal (AIM: TRB), a leading provider of software and services to the
international education market, today announces its preliminary results for
the year ended 31 December 2024.
Financial performance
· A solid trading performance with Group revenue, Adjusted EBITDA and
net debt better than market expectations as at the trading update released on
31 January 2025(1).
· Annual Recurring Revenue (ARR) increased 6.5%(2) to £57.0m (2023:
£53.5m at constant currency; £54.5m reported), with a 9.0%(2) growth in the
Group's strategic core products.
· Group revenue increased 6.0%(2) to £90.0m (2023: £84.9m
constant currency; £85.7m reported).
o Student Information Systems (SIS) revenue grew 7.2%(2) to £72.7m, with
25.2% growth in Foundation Cloud revenue and an 8.3% increase in Software
revenue, partly offset by an expected reduction in non-core Other Software and
Services.
o Etio (formerly Education Services) revenue grew 1.3%(2) to £17.3m.
· Adjusted EBITDA(3) increased by 17.8%(2) to £16.7m (2023:
£14.1m constant currency; £14.4m reported), representing an Adjusted
EBITDA(3) Margin of 18.5% (2023: 16.7% constant currency; 16.8% reported).
o Student Information Systems operating margin grew 8.7%(2) to £27.6m
(2023: £25.4m constant currency; £25.7m reported)
o Etio operating margin decreased to £0.6m (2023: £2.4m constant currency;
£2.4m reported)
o Central overheads and forex decreased to £11.5m (2023: £13.6m constant
currency; £13.8m reported)
· Exceptional costs of £5.6m (2023: £3.3m constant currency;
£3.3m reported), comprising £3.0m in respect of the previously announced NTU
settlement, Tribal Data Engine development costs being impaired by
£1.4m with an alternative Tribal product proving more cost effective for
customers and £1.2m of reorganisation and other costs.
· Statutory Profit before tax for the year decreased to £5.9m
(2023: £6.4m constant currency; £6.6m reported) as higher EBITDA performance
was offset by increased exceptional costs.
· Net debt at 31 December 2024 was £3.2m (2023: £7.2m),
reflecting a continued focus on operational efficiency.
o Net cash from operating activities before tax increased to £14.9m (2023:
£9.4m).
o Free cash inflow improved to £7.3m (2023: £(1.4)m) from higher EBITDA
and reduced development spend.
o Operating cash conversion remained above 100% at 101.5% (2023: 113.6%
constant currency; 110.5% reported)
· The Board is proposing an annual dividend of 0.65p per share
expected to be paid at the end of July 2025. Together with the interim
dividend of 0.65p per share paid in November 2024, the total FY24 dividend is
therefore expected to be 1.3p per share.
Operational performance
· ARR increased by £3.5m at constant currency to £57.0m of which
£1.0m was from new customers and Cloud migrations, including one new SITS
contract.
· GRR(4) increased to 93% (2023: 91%) and NRR(4) to 106% (2023:
102%)
· Continued focus on operational efficiency and organisational
structure to support the Group's SaaS ambitions, with a cost reduction
programme implemented in 2024 to support Group profit margins through the
transition to SaaS reducing Full Time Equivalent headcount in SIS by 59, a
9.1% reduction year-on-year.
· Etio's margin was impacted by delays in the sales pipeline due to
the UK and US elections, a mix more weighted to larger lower margin contracts
and investment of £0.6m in business development and marketing costs of
establishing a single global unified brand.
Outlook
· Trading to date in H1 FY25 in line with the Board's expectations.
· Focused on the delivery of our key strategic priority to become a
pureplay EdTech, SaaS business, which involves driving growth in high margin
recurring SaaS revenue and reducing costs, in order to improve profit margins.
· An effective cloud strategy and continued ARR growth projected for
FY25 underpin the Board's confidence in ongoing success.
Mark Pickett, Chief Executive, commented: "Tribal's FY24 performance is a
milestone in the transformation of the Group into an EdTech, SaaS business.
With strong, long-term customer relationships and increasing cloud adoption,
we are set for sustained growth in our core business. Despite market
challenges, we delivered revenue and EBITDA higher than expectations,
significantly reduced debt, and saw impressive ARR growth. Looking ahead, we
are focused on optimising our operations and driving continued growth and
increasing cash flow generation. Following the success of FY24, we are
confident in achieving results in line with the Board's expectations for
FY25."
(1) Market expectations as at 30 January 2025: Net Debt (excluding leases):
£9.4m, Revenue: £85.6m, Adjusted EBITDA: £14.4m
(2) Year on year movement on a constant currency basis. The Group has applied
2024 foreign exchange rates to 2023 results to restate the 2023 comparative to
constant currency.
(3) Adjusted EBITDA is in respect of continuing operations and is calculated
by taking the Adjusted EBITDA after Central Overheads excluding Interest, Tax,
Depreciation and Amortisation and exceptional items.
(4) Gross Revenue Retention (GRR) is calculated as a percentage of recurring
revenue retained from existing customers at 1 January including contract
expiry, cancellations or downgrades in the year. Net Revenue Retention (NRR)
is calculated as a percentage of recurring revenue retained from existing
customers at 1 January including upsells as well as contract expiry,
cancellations or downgrades in the year.
Tribal Group plc Tel: +44 (0) 117 311 5293
Mark Pickett, Chief Executive Officer
Diane McIntyre, Chief Financial Officer & Company Secretary
Investec Bank plc (NOMAD & Joint Broker) Tel: +44 (0) 20 7597 5970
Virginia Bull, Nick Prowting, James Smith
Singer Capital Markets Limited (Joint Broker) Tel: +44 (0) 20 7496 3000
Shaun Dobson, Tom Salvesen, Alex Bond
Alma Strategic Communications Tel: +44 (0) 203 405 0205
Caroline Forde, Hannah Campbell
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.
Chair statement
The Board is pleased to report that the Group delivered an FY24 performance
ahead on revenue and adjusted EBITDA compared to market expectations before
the January trading update. The business is being successfully refocused and
new initiatives commenced, designed to grow ARR, improve profit margins in our
core businesses, boost cash flow, and reduce debt.
Tribal's market leading position in multiple geographies, deep understanding
of the needs of further and higher educational institutions, cloud technology
expertise, and robust recurring revenue base, means we are well positioned to
enable our customer's transition to the cloud. While the financial burden
facing educational institutions around the world has caused caution in
customer decision making, we are confident it is also the spur to adopting
cloud solutions that will deliver sustainable efficiencies in the medium to
long term.
Financial performance
The Results for the year reflect a positive financial performance, with the
reduction in higher margin legacy software contracts offset by strong growth
in cloud-related revenue. A strong performance by the SIS business has offset
a softening in Etio's end markets in the year.
For the year ended 31 December 2024 Tribal reported revenue growth of 6.0% at
constant currency to £90.0m, Adjusted EBITDA growth of 17.8% at constant
currency to £16.7m and closed the year with a reduced net debt position of
£3.2m, reflecting a stringent focus on cost control and operational
efficiency. Importantly, closing ARR of the Core business increased by 9.0% at
constant currency to £54.8m (FY23: £50.3m at constant currency), reflecting
growth in the Group's strategic products and cloud offering, more than
offsetting the anticipated ongoing decline in non-core business ARR,
demonstrating the strength of the business with its established customer base
and respected product set. Whilst customer wins were lower than in prior
years, due to the pause in new business discussions when Tribal was in an
Offer period and general challenging economic backdrop, the Group's delivered
25% growth in cloud revenues and cloud margins are steadily improving, as
anticipated.
Financial results for the Education Services business, now rebranded as
"Etio", were significantly lower than anticipated due to the general election
in the UK leading to a pause in customer decision making and slower activity
in the Middle East. During the Year, Tribal made strategic investments in
Etio's business development and marketing functions, and aligned leadership
expertise within key markets, to more efficiently structure and organise Etio
to drive growth once market activity picks up. The Board continues to closely
monitor Etio's end markets and will respond accordingly should activity
continue to be depressed, however performance is expected to improve in 2025.
Strategy
As part of the transition to a pureplay EdTech, SaaS business, the Group is in
the process of making its existing SIS products available in the cloud, while
continuing the development of select new cloud-based modules to meet the
evolving needs of universities. This includes a major new offering, Tribal
Admissions, which is due for full market availability next year. To support
this, 2024 has started to see the transition to a new subscription-based
pricing model, providing products as a bundle at a single price and the
introduction of a streamlined method of transitioning to the cloud, providing
the pathway for revenue growth and margin appreciation over the medium term.
It is encouraging to note the progress Tribal has made in FY24, successfully
refocusing the business against a challenging economic backdrop. We remain
mindful of the need to continue to improve our cost efficiency and progress
opportunities to grow revenue. It is inevitable that the Australian legacy
business will be a drag on our growth in FY25, however we will be a stronger,
more efficient, business going forward, and are committed to keep advancing
the Group for the benefit of all stakeholders.
Dividend
As noted in the 2023 Annual Report & Accounts the Board deferred its
decision upon the quantum of the dividend in respect of the year-ended 31
December 2023 due to the uncertainty over the outcome of the dispute with NTU.
Following the settlement of the dispute, in November 2024 an interim dividend
0.65p per share was paid totalling £1.4m. The Board is proposing a final
dividend in respect of the year ended 31 December 2024 of 0.65p, pending
approval at the AGM on 27 May 2025. The anticipated payment date of the final
dividend is 24 July 2025, with an associated record date of 27 June 2025 and
an ex-dividend date of 26 June 2025.
Employees
Supporting our employees during our shift to a SaaS business and enabling the
successful adoption of our Full-Service license model is a top priority. Our
staff are already experts in our products and solutions; we are redefining
roles and teams to ensure that this expertise is leveraged to create customer
value at every opportunity. The Board wants to thank the team for their hard
work and dedication to making Tribal and its customers successful.
Richard Last
Chair
Chief Executive's review
Tribal's FY24 performance reflects the progress we are making on our journey
to becoming an EdTech, SaaS business. With a growing proportion of our
long-term customer base now committed to a transition to the cloud, alongside
the structural improvements driving success, we are well positioned to drive
growth and improve profitability.
We delivered a strong trading performance in FY24, with adjusted EBITDA
significantly ahead, and revenue ahead of market expectations before the
January trading update. The robust performance of the software-driven SIS
business has more than offset a softening in markets for the Group's education
consultancy business, Etio. The SIS business performance was driven by the
ongoing transition of customers to the Tribal Cloud, resulting in increased
cloud revenue and early signs of margin expansion. At the same time, we remain
focused on optimising the operational structure to maintain cost control and
progress opportunities to grow revenue. This approach contributed to improved
cash generation in the year, with net debt reducing to £3.2m (2023: £7.2m),
well ahead of market expectations. Closing Core ARR grew by 9.0% at constant
currency to £54.8m, reflecting the growing adoption of our cloud solutions.
Overall, ARR increased by 6.5% at constant currency to £57.0m.
Strategy
The transition of Tribal to a pureplay EdTech, SaaS business is at the
forefront of our strategic vision, making all of our SIS products available in
the cloud, while developing our new modules to meet the evolving needs of
universities.
Mitigating risk through the Tribal Cloud
Student Management Systems (SMS) are complex environments, with processes and
architecture that has evolved over many years, to a point where many customers
carry significant risk in their SMS through technical debt, unmodernised
integrations, and inefficient business processes. This is compounded by the
elevated cyber security risks, and challenges in finding and retaining
resources to mitigate these risks effectively.
A key strategy for many customers in mitigating this risk is to move the
environment into the cloud. Over the past five years, Tribal has developed a
cloud offering, Tribal Cloud, which runs the SITS environment successfully for
more than 30% of our customers and is chosen as the default for almost all of
our new customers.
The benefits of moving to the Tribal Cloud are significant risk mitigation,
including a highly cyber-secure environment, responsibility for managing the
SITS environment with Tribal, modernised integrations, and more general cloud
benefits, such as access to innovation and emerging technologies, such as AI
and advanced analytics.
Tribal's "Cloud First" strategy encourages our customers to move into the
Tribal Cloud at the earliest opportunity. At the same time, we continue to
support SITS on premise indefinitely (noting that we are unaware of any
customers who intend to stay on premise as a long-term strategic choice).
Modernising a Student Management System
Although a move to the cloud mitigates the operational risk of running a
Student Management System, it does not address challenges around the Business
Model, the functional processes, such as Admissions, Enrolment, the Academic
Model, etc. which are costly to maintain, and constrain improvements through
inefficiencies in the underlying data quality.
Some efficiency improvements can be made. However, to create long-term
efficiency requires the adoption of a more standardised data model and
changing end-to-end processes.
The benefit of this approach is significantly improved efficiency and lower
cost over time, as a standardised data model across the Higher Education
sector shifts the definition of leading practice process to Tribal, who can
provide a complete solution as-a-service, where all upgrades, maintenance and
configuration changes, are managed by Tribal with no need for a customer to
retain any resource to support the system's business processes.
Tribal has already made good progress in this area, with the standard SITS
Admissions module now live with seven customers.
The SITS functional roadmap will continue to deliver on this strategy, which
is now formalised into a program called "SITS Adopt", a complete, integrated,
fully-tested, end-to-end set of standardised, but configurable, leading
processes. Over time, this will then be coded into the core SITS product as a
standard, preconfigured SaaS version of SITS, available to those customers who
wish to remove the management burden of maintaining their own Student
Management System. Tribal will continue to support those customers who wish to
retain control over their own system and maintain a bespoke version of SITS.
Introduction of subscription pricing and SITS Adopt
As part of this strategy, we have been working with our customers to introduce
a new pricing model for SITS, the Higher Education Full-Service licence, which
involves offering a subscription-based comprehensive package of cloud products
at one transparent price. This licence will help customers move to a
cloud-based SITS-as-a-Service whilst also accommodating those who prefer to
stay on-premise or want to customise SITS more heavily to suit their needs,
helping universities drive efficiency and save cost. The bundling of products
helps drive standardisation and commonality across the customer base. It also
enables additional products to be added in to the bundle at no extra cost to
the customer and, critically, made available to the customer to implement
without the need for long, expensive procurement cycles.
Good progress is already being made with the migration to the cloud of our
customer base. One of the most strategically significant of these in FY24 was
the University of Exeter, which successfully migrated to the SITS Cloud and
then became the first major customer to sign up to our Higher Education
Full-Service bundle. The endorsement from a large Russell Group university
paves the way for other universities to follow. Several conversations with
further universities are also progressing well.
Our cloud migration strategy and subscription packages ensure a steady stream
of reliable recurring revenue for the Group with increased visibility and
secure, long-term customer relationships, which provides us with confidence
that our strategy offers a clear trajectory to deliver growth over time, to
offset the decline following the end of the Australian legacy Government
contracts.
Over the medium term, we see an incremental ARR opportunity of £20m through
transitioning our existing customers to the cloud, a further £5m ARR from the
upsell of additional products and £5m - £10m ARR from the winning of new
customers.
Student Information Systems (SIS)
Student Information Systems, our core segment that targets the further and
higher education sectors through our range of software solutions, has
performed well, securing a significant new five-year SITS contract with a new
customer, SOAS University, for a total contract value of £2.5m, contributing
£0.4m to ARR and a new contract for SITS Cloud with the Institute of Tourism
Studies Malta for a total contract value of £0.7m, adding £0.1m to ARR. We
also added seven new ebs customers during the year, contributing a total
£0.5m ARR, with six contracts in the UK and one in New Zealand.
We have continued to progress the instalment of several key customers on our
SITS, Cloud, Dynamics and Maytas solutions following contract wins in prior
years. The Tribal Dynamics business delivered a particularly strong
performance in 2024, with the launch of new customer projects, including
University College London and Windsor Forest Colleges Group, and secured five
go-lives for existing customer projects, which included the University of
Waikato. Towards the end of 2024, we secured three major projects, with
go-lives scheduled for 2025. This momentum highlights our commitment to
delivering high-quality solutions and expanding our customer base.
Etio
This year we have focused on developing Etio, previously Education Services,
as a standalone business, bringing all our Education Services businesses
worldwide under a single, unified brand. This is part of our strategy for
targeting sustainable growth.
Etio's performance in FY24 was significantly lower than anticipated due to
challenging trading conditions. Both the UK general election and the US
election impacted the pipeline temporarily due to a pause in customer decision
making, and cost pressures on the higher education sector leading to the
slowdown in market activity. In the Middle East, changes to structures in the
state education ministries has also impacted the volume of opportunities
available to bid for in the short term. Time and investment have been devoted
to business development, marketing functions, and reorganisation of leadership
within key markets, to better unify Etio and ensure it is set up to operate
more efficiently going forward. We expect this repositioning in our key
markets and a strong global team to provide solid foundations for Etio to
build growth once market activity returns to normal levels and expect margins
to be closer to historic levels as various one-off investments play through,
and cost controls are implemented. However, we continue to closely monitor the
end market and will make necessary adjustments accordingly.
In FY24, Etio secured a major new project with the Department for Education in
England which launched a three-year project worth £15m to support young
people who are persistently absent from school; a new three-year contract for
£1m with Louisiana Department of Education to review initial teacher
education provision; and a £0.3m contract with the Massachusetts Department
of Elementary and Secondary Education. Etio renewed its keystone contract with
New York State Education Department worth £10m over five years and in the
Middle East, signed a new £2.1m contract with the Emirates Schools
Establishment for QAS in the UAE for teacher training online content.
Operations and people
FY24 has seen continued organisational restructuring to ensure the appropriate
balance in our people resources and capabilities. This has resulted in
improvement in internal efficiencies, whilst also maintaining an attrition
rate well below industry average in our critical talent segments.
The internal restructuring has enabled us to streamline the business and
allowed the cost base to remain steady, while aligning our talent investments
to our business goals and objectives. As a result, there has been a continued
shift in our role-mix, with greater emphasis on talent in engineering and
customer success, where there have been successful initiatives to onboard new
teams, and more of our business support positions located within our offshore
Global Business Services (GBS) organisation. GBS continues to go from strength
to strength in optimising our business processes and delivering continued
efficiency gains and scalability, which we expect to continue.
With the evolution of the pricing strategy has come a necessary change in the
business organisation to meet the differing demands of a Full-Service, SaaS
operation. Whilst our depth of product and solution expertise is unrivalled,
our focus has been on developing the culture and behaviours needed in all our
people to underpin the ethos of full service. Our people have embraced our new
recognition award which exemplifies full service in action and role models the
change, fostering innovations in how we deliver or improve services. In fact,
there is a drive to accelerate innovations in all facets of customer
engagement and delivery, to ensure we are prepared to scale expertise and
connect it to customers. Bringing our customer success and professional
services teams into a single organisation is an important milestone, enabling
us to eliminate friction in the customer journey and remove internal
inefficiencies to maximise the full impact and potential of our people.
Outlook
Tribal's performance in FY24 has been defined by a refocusing of the business
on our transformation into a cloud provider, ensuring we remain at the
forefront of our industry and provide our customers with the technology they
require to be successful. The reduced debt levels and improved EBITDA margin
provide a strengthened foundation entering FY25, which will help to offset the
anticipated continued decline in the non-core business.
We note that the Higher Education sectors in the UK, Australia and New Zealand
are expecting a challenging environment in 2025, with funding gaps driving
programmes of cost reduction and course closure at many universities.
Notwithstanding, trading in the first part of the new year has begun well, and
we are seeing our sales pipeline grow to more normal levels. The longer sales
cycle continues to be a feature of the Higher Education sector; we have
various initiatives running, including more standardised proposals and
pricing, and a simpler legal & contracting process designed to reduce the
length of the sales cycle and improve the customer's time to value.
A key strategic goal for FY25 is to migrate customers onto the new pricing
model, which will drive growth in high margin recurring SaaS revenues and
increase cash flow generation. It will take some time to move customers from
their existing contracts, but there are incentives for customers to move
early.
With strong customer relationships, a robust recurring revenue base, and the
success of strategic investment in cloud and SaaS business developments
driving cloud services revenue growth, we are confident in achieving results
in line with the Board's expectations for FY25.
Financial review
Results
£m 2024 2023 Reported Constant Change constant currency Change constant currency %
currency 2023(2)
Revenue 90.0 85.7 84.9 5.1 6.0%
Student Information Systems 72.7 68.6 67.9 4.9 7.2%
Etio (formerly Education Services) 17.3 17.2 17.0 0.2 1.3%
Gross Profit 43.5 42.1 41.6 1.8 4.3%
Gross Profit Margin 48.3% 49.1% 49.0% (0.8)% (0.8)pp
Adjusted Segment EBITDA(1)
(Before Central Overheads) 28.1 28.1 27.8 0.4 1.4%
Student Information Systems 27.6 25.7 25.4 2.2 8.7%
Etio 0.6 2.4 2.4 (1.8) (76.8)%
Central Overheads(3) (12.1) (13.6) (13.5) 1.4 (10.6)%
Net foreign exchange (losses)/gain 0.6 (0.2) (0.1) 0.7 703.7%
Adjusted EBITDA(1) 16.7 14.4 14.1 2.5 17.8%
Adjusted EBITDA Margin(1) 18.5% 16.8% 16.7% 1.9% 1.9pp
Statutory Profit before Tax 5.9 6.6 6.4 (0.5) (8.5)%
Statutory Profit after Tax 5.5 5.3 5.1 0.4 7.7%
Annual Recurring Revenue 57.0 54.5 53.5 3.5 6.5%
1. Adjusted EBITDA and Adjusted EBITDA Margin are in respect
of continuing operations and are calculated by taking the Adjusted EBITDA
after Central Overheads and excludes Interest, Tax, Depreciation and
Amortisation and exceptional items of £5.6m (2023: £3.3m), refer to Note 4.
2. 2023 results updated for constant currency - the Group has
applied 2024 foreign exchange rates to 2023 results to present a constant
currency basis. On a constant currency basis there is a decrease in Revenue of
£0.8m and a decrease to Adjusted EBITDA (before Central Overheads) of £0.3m
compared to 2023 reported.
3. Central Overheads are made up of costs that are not
directly attributable to either Student Information Systems or Etio.
The financial review presents the reported results for 2024 and 2023, together
with the 2023 results restated to 'constant currency' using 2024 foreign
currency exchange rates. The year on year change is shown against the 2023
constant currency numbers. In addition to EBITDA and Adjusted EBITDA, the
presentation disclosed as "Constant currency" is an alternative performance
measure, not a statutory reporting measure prepared in line with International
Financial Reporting Standards (IFRS) and is not included in the audited
financial statements. The Group has chosen to present its results on a
constant currency basis to better reflect the year-on-year performance of the
business and eliminate the translational impact of foreign exchange movements
in the year. 30.5% (2023: 32.7%) of Tribal's revenue in the year was
generated outside the UK and is therefore subject to foreign exchange
movement.
The Group provides software and non-software related services to the
international educational market. These services are managed across two
divisions, SIS and Etio.
Overall Results
Revenue grew by 6.0% to £90.0 million (2023: £84.9 million at constant
currency, £85.7 million reported), driven by a 7.2% increase in SIS, fuelled
by robust Cloud revenues, alongside a 1.3% growth in Etio.
Gross Profit increased 4.3% to £43.5m (2023: £41.6m constant currency,
£42.1m reported) albeit the margin percentage has decreased slightly to 48.3%
(2023: 49.0% constant currency, 49.1% reported). The margin percentage in the
prior year was boosted by 2 percentage points due to the release of the NTU
onerous contract provision following termination of the contract. Ongoing
margin performance improved significantly, in particular from increased scale
and successful efficiency programmes in our Cloud environments.
Central Overheads, representing costs in HR, IT, Finance, Marketing and
Management that aren't directly attributable to lines of business decreased by
£1.4m to £12.1m (2023: £13.5m constant currency; £13.6m reported). The
benefits of standardising our processes around the Group more than offset
inflationary increases, and the prior year included £1.1m of one-off NTU
costs. Foreign exchange movements caused a £0.6m positive impact in the 2024
results, which may reverse in the following year.
Adjusted EBITDA increased £2.5m to £16.7m (2023: £14.1m constant currency;
£14.4m reported). Adjusted EBITDA margin increased to 18.5% (2023: 16.7%
constant currency; 16.8% reported) with growth in the higher margin SIS
business, lower central overheads and a positive foreign exchange movement,
offsetting decline in Etio margin. 2025 is expected to incur an impact of
£0.5 million due to the increase in employers' National Insurance
contributions.
The Statutory Profit after tax for the year increased by £0.4m to £5.5m
(2023: £5.1m constant currency; £5.3m reported) as the increase in EBITDA
was offset by £3.0m relating to the NTU settlement agreement and associated
legal costs. The tax charge was lower than the prior year at £0.4m
(2023: £1.3m constant currency and £1.3m reported) due to an increased
level of deferred tax assets recognised.
Student Information Systems (SIS)
£m 2024 2023 Reported Constant currency 2023 Change constant currency Change constant currency %
Software and Support 41.5 38.6 38.3 3.2 8.3%
Foundation Cloud Services 13.0 10.4 10.4 2.6 25.2%
Professional Services 9.4 9.8 9.7 (0.3) (2.8)%
Core Revenue 63.9 58.8 58.4 5.5 9.5%
Other Software & Services 8.8 9.7 9.5 (0.7) (7.0)%
Total Revenue 72.7 68.6 67.9 4.9 7.2%
Adjusted Segment EBITDA 27.6 25.7 25.4 2.2 8.7%
Adjusted Segment EBITDA Margin 37.9% 37.5% 37.4% 0.5% 0.5pp
SIS focuses on software-related solutions to the Higher Education, Further
Education, Employers and Schools sectors across the main geographic markets
being the UK, Australia, New Zealand, Malaysia, Netherlands and Canada.
SIS revenue increased 7.2% to £72.7m (2023: £67.9m constant currency;
£68.6m reported). Revenue generated from our core product offerings increased
9.5% to £63.9m (2023: £58.4m constant currency and £58.8m reported).
Software and Support includes Support & Maintenance fees and subscription
licence revenue for all Foundation products (SITS, Callista, ebs, Maytas, K2
and SID) and revenues for newer associated cloud native products (such as
Engage, Semestry, Dynamics and Admissions). Given the evolving product and
bundled pricing (HEFS) strategy, all product sets are shown together with the
exception of Cloud revenues associated with Foundation products. Foundation
Cloud Services cover the provision of Tribal Cloud, a fully managed public
cloud service and other hosting services supporting Tribal products, either in
a private cloud, or increasingly in a public cloud.
Software and Support revenue increased 8.3% to £41.5m driven by growth in new
customers across all Foundation products and increases due to inflation and
rising student numbers. Included within Software and Support, Cloud Native
products (on the Edge platform) remained flat during the year at £5.2m
revenue as the focus of attention remained on delivering the HEFS proposition.
£1.5m of perpetual licence revenues are included in 2024 from FTE increases
across the base, which will fall away during 2025 as the SITS customer base
move to the new HEFS proposition.
Foundation Cloud Services revenue have continued to increase and are up 25.2%
to £13.0m mainly due to the delivery of prior year Cloud migration sales, as
existing customers transition their existing on-premise SITS software into the
Tribal Cloud.
Professional Services includes the implementation of all software products,
typically working alongside customer teams. Implementation projects vary in
length and complexity, ranging from a small number of days to more than two
years for complex projects. Revenues are either a day rate fee or performed
under a fixed fee for defined implementation scope. Professional services have
continued to be delivered remotely where appropriate, and the team has been
bolstered by the Global Delivery Centre (GDC) in Kuala Lumpur, Malaysia.
Professional Services revenue decreased by 2.8% to £9.4m (2023: £9.7m
constant currency, £9.8m reported), driven by the British Council and TAFE
projects reducing as the contracts come to an end.
Other Software & Services revenue decreased 7.0% to £8.8m (2023: £9.5m
constant currency, £9.7m reported) due to continued School Edge churn as
expected, and the previously announced termination of the Australian
Department of Education (DoE) contract with schools in New South Wales, in
June 2024. The DoE has worked with schools to allow them to select their own
providers and move away from one overarching contract with Tribal. Looking
forward, the previously announced completion of the Technical and Further
Education Colleges New South Wales (TAFE NSW) contract is now expected in
mid-2025 and in addition the British Council contract finished in February
2025. These three major contracts contributed £5m of revenue in 2024, which
is expected to drop to c£2m in 2025.
Adjusted Segment EBITDA increased by 8.7% to £27.6m (2023: £25.4m constant
currency; £25.7m reported) and Adjusted Segment EBITDA Margin increased to
37.9% (2023: 37.4% constant currency and 37.5% reported). The margin
percentage in the prior year was boosted by 2.5 percentage points due to the
release of the NTU onerous contract provision. Ongoing margin performance
improved significantly, in particular in Cloud revenues driven by increased
scale and successful efficiency programmes.
Etio (formerly Education Services)
£m 2024 2023 Reported Constant currency 2023 Change constant currency Change constant currency %
Revenue 17.3 17.2 17.0 0.2 1.3%
School Inspections & Related Services 14.8 14.2 14.1 0.7 5.0%
i-graduate - Surveys & Data Analytics 2.4 2.9 2.9 (0.5) (16.4)%
Adjusted Segment EBITDA 0.6 2.4 2.4 (1.8) (76.8)%
Adjusted Segment EBITDA Margin 3.2% 14.1% 13.9% (10.7)% (10.7)pp
Etio provides non-software related solutions globally across the same market
sectors. The core offerings are inspection and review services which support
the assessment of educational delivery, performance benchmarking, student
surveys, and data analytics.
Etio revenue increased by 1.3% to £17.3m (2023: £17.0m constant currency;
£17.2m reported) with growth in School Inspections & Related Services
income offsetting a reduction in Surveys and Benchmarking due to the
seasonality of the Southern Hemisphere International Student Barometers in
which most institutions participate every other year.
The revenue from School Inspections & Related Services increased by 5.0%
to £14.8m (2023: £14.1m constant currency; £14.2m reported). Growth was
driven by contracts in the Middle East, particularly the Subject Specific
Teacher Training Online (SSTTO) project for the Emirates Schools
Establishment.
The revenue for Surveys & Data Analytics decreased by 16.4% to £2.4m
(2023: £2.9m constant currency; £2.9m reported). The revenues from Surveys
reduced, as expected, due to the seasonality discussed above.
The Adjusted Segment EBITDA in Etio decreased by 76.8% to £0.6m (2023: £2.4m
constant currency; £2.4m reported), the Adjusted Segment EBITDA Margin also
decreased 10.7pp to 3.2% (2023: 13.9% constant currency; 14.1% reported), this
decrease is largely due to a mix more weighted to larger lower margin
contracts and £0.6m investment in the business development and marketing
costs of establishing a single global unified brand.
Product development
£m 2024 2023 Reported Change
Product Development 10.6 12.4 (15.1)%
Of which capitalised 4.4 8.5 (47.9)%
Software and Support 4.4 8.5 (47.9)%
Of which expensed 6.1 4.0 55.3%
Software and Support 5.6 3.4 64.7%
Other Software and Services 0.5 0.6 (14.2)%
Amortisation 1.9 1.5 28.0%
The Group spent £10.6m on Product Development, of which £4.4m was
capitalised in relation to Admissions, Semestry and Dynamics (2023: £12.4m
spent, £8.5m capitalised).
As previously announced development activities reached their peak during 2022,
and the team was reduced part way through 2023 to align to our development
strategy. During the year the decision was made to put TDE (Tribal Data
Engine) on 'stop sell' with an alternative Tribal product proving more cost
effective for customers. As this asset will not generate future economic
benefit, a £1.4m impairment has been included within Exceptional Items (refer
to Note 4). This will have no future cash impact on the Group. The Board's
prior decision to reduce overall R&D spend and focus sales efforts on a
slimmed down product set, leading with Admissions has continued. Admissions is
expected to be ready for the first UK pilot customers late in 2025.
Expensed product development increased 55.3% to £6.1m (2023: £4.0m) of
which £5.6m (2023: £3.4m) related to our core products and £0.5m (2023:
£0.6m) related to Other Software and Services.
Key performance indicators (KPIs)
£m 2024 2023 Reported 2023 Constant currency Change constant currency Change constant currency %
Revenue 90.0 85.7 84.9 5.1 6.0%
- Student Information Systems 72.7 68.6 67.9 4.9 7.2%
- Etio 17.3 17.2 17.0 0.2 1.3%
Adjusted EBITDA(1) 16.7 14.4 14.1 2.5 17.8%
Adjusted EBITDA Margin(1) 18.5% 16.8% 16.7% 1.9% 1.9pp
Annual Recurring Revenue (ARR)(2) 57.0 54.5 53.5 3.5 6.5%
Gross Revenue Retention (GRR)(3) 93% 91% 91% 2.0% 2.0pp
Net Revenue Retention (NRR)(3) 106% 102% 102% 3.9% 3.9pp
Committed Income (Order Book) (4) 179.7 168.8 167.2 12.6 7.5%
Operating Cash Conversion(6) 101.5% 110.5% 113.6% (12.1)% (12.1)pp
Free Cash (Out)/In Flow 7.3 (1.4) (1.4) 8.7 615.9%
Staff Retention 89.3% 86.2% 86.2% 3.1% 3.1pp
Revenue per Operational FTE(5) £108.8k £103.2k £102.2k £6.6k 6.4%
1. Adjusted EBITDA and Adjusted EBITDA Margin are in respect
of continuing operations and exclude charges reported in 'Exceptional items'
of £5.6m (2023: £3.1m), refer to Note 4. EBITDA is calculated by taking the
Adjusted Operating Profit after the allocation of Central Overheads and
excludes Interest, Tax, Depreciation and Amortisation.
2. Annual Recurring Revenue is a forward-looking metric.
Includes exit rate annualised recurring revenue, plus future contracted
recurring revenue yet be delivered, and known losses within the next 12 months
where customers have given notice.
3. GRR is calculated as a percentage of recurring revenue
retained from existing customers at 1 January including contract expiry,
cancellations or downgrades in the year. NRR is calculated as a percentage of
recurring revenue retained from existing customers at 1 January including
upsells as well as contract expiry, cancellations or downgrades in the year.
4. Committed Income (Order Book) refers to the Total Contract
Value of booked sales orders which have not yet been delivered (including two
years Support and Maintenance, where it is contracted on an annual recurring
basis).
5. Revenue per Operational FTE uses the average FTE for the
year excluding average FTE associated with capitalised Product Development. In
2024 56.0 FTE were capitalised (2023: 107.3).
6 Operating cash conversion is calculated as net cash from
operating activities before tax, excluding cash outflow of £0.2m (2023:
£0.8m) from an aborted takeover, £0.5m (2023:£0.9m) of restructuring costs
and £1.4m of NTU settlement (2023:£nil) as a proportion of Adjusted EBITDA
which in 2023 excluded the onerous contract provision release of £4.3m.
The above Alternative Performance Measures (APM) are not Statutory Accounting
Measures and are not intended as a substitute for statutory measures. A
reconciliation of Statutory Operating Profit and Adjusted EBITDA has been
provided in the financial statements.
Annual recurring revenue (ARR)
2023 Constant currency
£m 2024 Reported 2023 Change Change %
Software and Support 41.1 38.5 37.8 3.3 8.8%
Foundation Cloud Service 13.7 12.6 12.5 1.2 9.5%
Core product ARR 54.8 51.1 50.3 4.5 9.0%
Other Software & Services 2.3 3.4 3.3 (1.0) (31.3)%
Total ARR 57.0 54.5 53.5 3.5 6.5%
ARR is a key forward-looking financial metric of the Group and is an area of
strategic focus. Our aim is to grow ARR in our core products through the
delivery of Software-as-a-Service contracts, providing increased quality of
earnings.
ARR relating to our core product offering increased by 9.0% to £54.8m (2023:
£50.3m constant currency, £51.1m reported) driven by £1.0m from new
customer wins and cloud migrations, and also upsell to existing customers
across our core product offerings. Within our Core products the cloud native
software (such as Engage, Semestry and Dynamics) remained flat at £5.9m.
ARR relating to other software and services has decreased 33.4% to £2.3m
(2023: £3.3m constant currency, £3.4m reported), of which £1.0m relates to
the removal of ARR for the British Council contract which ended early 2025.
All of the major non-core Australian contracts have been removed from ARR, and
the rate of decline will be considerably slower going forward.
NRR 106% (2023: 102%) has increased by 3.9pp highlighting the growth
opportunities within our existing customer base, in particular migrations of
on-premise customers into the cloud.
GRR 93% (2023: 91%) includes churn across our School Edge customers of 0.8ppt
and 2.8ppt for the termination of Department of Education contract in June
2024, leaving a core underlying GRR of 96.6%.
Committed Income (Order Book)
The Committed Income (Order Book) relates to the total value of orders across
SIS and Etio, which have been signed on or before, but not delivered by 31
December 2024. This represents the best estimate of business expected to be
delivered and recognised in future periods and includes two years of Support
& Maintenance revenue. At 31 December 2024 this increased to £179.7m
(2023: £167.2m constant currency, £168.8m reported). Growth is mainly due to
the new Attendance Mentors contract within Etio.
Operating cash conversion
Operating cash conversion is calculated as net cash from operating activities
before tax (excluding the cash outflow of £0.2m (2023: £0.8m) from costs
associated with the lapsed offer from Ellucian, £0.4m (2023: £0.9m) of
restructuring costs and £1.4m in relation to the NTU settlement) as a
proportion of Adjusted EBITDA (in 2023 this excluded the release of the
onerous contract provision of £4.3m due to the end of the NTU contract. In
2024, operating cash conversion was 101.5% (2023: 110.5% reported).
Free cash flow
Free cash flow is included as a key indicator of the cash that is generated
(or absorbed) by the Group and is available for acquisition-related
investment, interest and finance charges, and distribution to shareholders.
Free cash flow in 2024 improved to an inflow of £7.3m (2023: outflow of
£(1.4)m reported) as product development expenditure decreased, net cash flow
from operating activities before tax increased to £14.9m (2023: £9.4m) due
to increased sales and the impact of £3.7m NTU contract cash outflows in
2023, offset by higher tax payments £2.2m (2023: £1.1m).
Full time equivalent (FTE) and staff retention
2024 2023 Change
UK 558 601 (43)
Asia Pacific 291 293 (2)
Rest of world(1) 18 14 4
Full Time Equivalent (FTE) 867 908 (41)
1. Including USA, Canada and Middle East.
Our overall workforce has decreased by 4.5% to a total FTE of 867 from 908 at
31 December 2023.
On an operational FTE basis (excluding Capitalised Product Development), the
revenue per average operational FTE increased to £108.8k (2023: £103.2k).
The reduction in headcount reflects our drive for operational efficiencies and
reduction in product development, whilst growing our global delivery
capability in the Philippines. Staff retention has increased to 89.3% (2023:
86.2%).
Exceptional items
The Group has adopted a policy of disclosing separately on the face of its
Group income statement the effect of any components of financial performance
considered by the Directors to not be directly related to the trading business
or significant one-off events, for which separate disclosure would assist in a
better understanding of the financial performance.
Exceptional items amounted to £5.6m (2023: £3.3m) and a full explanation is
included in Note 4, however the main items are as follows:
· Restructuring and associated costs: Relate the restructuring of the Group's
operations to support the Group's transition to a pureplay Edtech, SaaS
business (2024: £0.7m; 2023: £1.0m).
· Etio restructure costs: Board's strategic review of Etio and establishing Etio
as a standalone entity (2024: £0.3m; 2023: £1.0m).
· NTU Settlement costs, including legals, following the settlement agreement in
May 2024 of £3.0m.
· Impairment of TDE (Tribal Data Engine) intangible asset following the product
being put on stop-sell of £1.4m.
Net cash and cash flow
£m 2024 2023 Change
Net cash flow from operating activities before tax 14.9 9.4 5.5
Tax paid (2.2) (1.1) (1.1)
Purchases of PPE (0.3) (0.4) 0.1
Net lease payments (0.8) (0.9) 0.1
Capitalised product development (4.4) (8.5) 4.1
Proceeds from shares 0.1 0.1 0.0
Free cash flow 7.3 (1.4) 8.7
Net cash outflow from acquisition activities 0.0 (0.1) 0.1
Net cash inflow/(outflow) from other financing activities (1) (8.5) 5.6 (14.1)
Net (decrease)/increase in cash & cash equivalents (1.2) 4.1 (5.3)
Cash & cash equivalents at beginning of the year 6.8 2.9 3.9
Less: Effect of foreign exchange rate changes (0.3) (0.2) (0.1)
Cash & cash equivalents at end of period 5.3 6.8 (1.5)
Restricted cash (2) (0.5) - (0.5)
Borrowings (8.0) (14.0) 6.0
Net debt at end of period (3.2) (7.2) 4.0
1. Net cash inflow/outflow from other financing activities
consists of Interest Paid (£1.1)m (2023: (£0.7)m), Net Loan Repayment
(£6.0)m (2023: drawdown of £7.8m) and Dividends paid of (£1.4)m (2023:
(£1.4)m).
2. Restricted cash relates to funds of £0.5m (2023: £nil) to
settle contractual payments under a grant scheme that the Group administers
for the Department of Education.
Net debt and cash equivalents excluding restricted cash of £0.5m at 31
December 2024 were (£3.2)m (2023: (£7.2)m).
Operating cash inflow before tax for the period was £14.8m (2023: £9.4m),
£5.4m higher than last year driven by higher operating profit and the impact
of £3.7m NTU contract cash outflows in 2023. Cash expenditure on exceptionals
was £2.0m, with £1.4m of the NTU settlement and £0.4m of reorganisation
costs.
Capitalised product development decreased to £4.4m (2023: £8.5m) in line
with the Group's product investment programme. The Group made a payment of
£nil for deferred consideration (2023: £0.1m). The 2023 charge was a final
earn-out payment for Eveoh. There were no acquisitions in 2024.
Cash outflow from other financing activities as defined above increased to
£8.5m (2023: inflow of £5.6m). The main impact being the repayment of the
multicurrency revolving facility where a net £6.0m was repaid (2023: drawdown
of £7.8m). The Group paid an interim dividend of 0.65p per share in the year
with £1.4m returned to shareholders. Bank loan arrangement fees and all
interest in the period totalled £1.1m (2023: £0.9m).
Funding arrangements
On 29 December 2023 the Group entered into a three-year £20m multicurrency
revolving facility with a further £5m accordion with HSBC, with the option to
extend by a further two years, in January 2025 the first one year extension
was activated, with the second available later in 2025. The facility was put
in place to cover general corporate and working capital requirements of the
Group; as at 31 December 2024 £8.0m (2023: £14.0m) of the loan was utilised.
The Group has a £2m committed overdraft facility in the UK and an AUD $2m
committed overdraft facility in Australia; both facilities are committed for a
12-month period ending August 2025 and October 2025 respectively. At 31
December 2024 none of the overdraft facilities were drawn.
Shareholders returns and dividends
As noted in the 2023 Annual Report & Accounts the Board deferred its
decision upon the quantum of the dividend in respect of the year-ended 31
December 2023 due to the uncertainty over the outcome of the dispute with NTU.
Following the settlement of the dispute in November 2024, an interim dividend
of 0.65p per share was paid totalling £1.4m. The Board is proposing a final
dividend in respect of the year ended 31 December 2024 of 0.65p, pending
approval at the AGM on 27 May 2025. The anticipated payment date is 24 July
2025, with an associated record date of 27 June 2025 and an ex-dividend date
of 26 June 2025.
Going concern
As at 31 December 2024, the Group had cash and cash equivalents of £5.3m
(2023: £6.8m) and borrowings of £8.0m (2023: £14.0m). The Group has funding
arrangements in place as described earlier, also please see Note 14.
The Group benefits from strong annual recurring revenues and cash generation,
it also has a significant pipeline of committed income as it enters 2025. The
Group's net current liability position has increased to £23.4m from £19.1m
in 2023; the increase mainly driven by net contract liabilities. Net current
liabilities primarily consists of net contract liabilities of £26.3m (2023:
£21.8m) relating to deferred customer revenue recognised in accordance with
IFRS 15.
During the year the NTU contract dispute was settled with remaining payments
to be made in 2025 of £1.7m.
In assessing the Group's going concern position the Directors have considered
all relevant facts, latest forecasts, an assessment of the risks faced by the
Group, and considered potential changes in trading performance. In addition,
management have stress tested the latest forecasts to the point where either
the Group cannot meet its liabilities or is in breach of banking covenants and
have concluded that this position is highly unlikely. Accordingly, the
Directors have a reasonable expectation that the Group and the Company have
adequate resources to continue in operational existence for at least 12 months
from the date of approval of the financial statements and the foreseeable
future. Thus, they continue to adopt the going concern basis in preparing the
financial statements.
Taxation
The corporation tax on profit before tax was £0.4m (2023: £1.3m). This
decrease is primarily driven by increased recognition of deferred tax
assets.
Share options and share capital
On 13 June 2024, 1,766,193 nil-cost share options were granted to Mark Pickett
(1,109,005) and Diane McIntyre (657,188) as part of their ongoing
remuneration.
On 5 June 2024, 552,291 nil-cost share options were granted to eligible
employees on the Executive Board under the terms of its 2018 Long-Term
Incentive plan.
Earnings per share (EPS)
Adjusted basic earnings per share from continuing operations before
exceptional items and intangible asset impairment charges and amortisation,
which reflects the Group's underlying trading performance, increased to 4.7p
due to the improved adjusted profit before tax in the year.
Statutory basic earnings per share increased to 2.6p (2023: 2.5p) as a result
of the statutory profit in the year of £5.5m (2023: £5.3m).
Pension obligations
At 31 December 2024, the Group operated two defined benefit pension schemes
for the benefit of certain deferred employees of its subsidiaries in the UK.
These schemes are administered by separate funds that are legally separated
from the Company. The trustees of the pension funds are required by law to act
in the interest of the funds and of all relevant stakeholders in the schemes.
The trustees of the pension funds are responsible for the investment policy
with regard to the assets of the funds.
The surplus recognised under IAS 19 at the end of the year was £0.1m (2023:
surplus of £0.1m), with gross assets of £7.9m and gross liabilities of
£4.7m (2023: £8.5m and £5.7m respectively). Total actuarial losses
recognised in the consolidated statement of comprehensive income are £0.1m
(2023: losses £(0.1)m). The Company does not have an unqualified right to
apply any surplus on one of the schemes and consequently a surplus of £3.1m
has not been recognised.
Diane McIntyre
Chief Financial Officer
Consolidated Income Statement
For the year ended 31 December 2024
Note Year ended 31 December 2024
Total Year ended 31 December 2023
£'000 Total
£'000
Revenue 2 90,008 85,750
Cost of sales (46,513) (43,628)
Gross profit 43,495 42,122
Total administrative expenses (36,602) (34,861)
Operating profit 3 6,893 7,261
Analysed as: 3 12,465 10,581
Operating profit (before exceptional items)
Exceptional items 4 (5,572) (3,320)
Operating profit (EBIT) 6,893 7,261
Finance income 137 308
Finance costs 5 (1,172) (939)
Profit before tax 5,858 6,630
Tax charge 6 (370) (1,336)
Profit attributable to the owners of the parent 5,488 5,294
Earnings per share
Basic 8 2.6p 2.5p
Diluted 8 2.5p 2.4p
Consolidated statement of comprehensive income
For the year ended 31 December 2024
Note Year ended Year ended
31 December 2024 31 December 2023
£'000 £'000
Profit for the year 5,488 5,294
Other comprehensive expense: (89) (129)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit pension schemes
Deferred tax on measurement of defined benefit pension schemes (8) -
Items that may be reclassified subsequently to profit or loss: (1,453) (458)
Exchange differences on translation of foreign operations
Other comprehensive expense for the year net of tax (1,550) (587)
Total comprehensive income for the year attributable to equity holders of the 3,938 4,707
parent
Consolidated balance sheet
As at 31 December 2024
Note 2024 £'000 2023 £'000
Non-current assets 9 27,600 28,524
Goodwill
Other intangible assets 10 50,041 49,894
Property, plant and equipment 621 836
Right-of-use assets 1,693 2,117
Net investment in lease - 21
Deferred tax assets 6,873 4,960
Retirement benefit scheme assets 102 81
86,930 86,433
Current assets 11 16,197 13,690
Trade and other receivables
Net investment in lease - 49
Contract assets 2 3,441 5,918
Current tax assets 1,206 752
Cash and cash equivalents 12 5,293 6,797
26,137 27,206
Total assets 113,067 113,639
Current liabilities 13 (7,034) (5,902)
Trade and other payables
Accruals (9,193) (9,194)
Contract liabilities 2 (29,783) (27,732)
Current tax liabilities (2,352) (1,541)
Lease liabilities (706) (713)
Provisions (502) (1,205)
(49,570) (46,287)
Net current liabilities (23,433) (19,081)
Non-current liabilities 13 (66) (212)
Other payables
Deferred tax liabilities (2,547) (2,740)
Contract liabilities 2 (26) -
Lease liabilities (903) (1,320)
Borrowings 14 (8,000) (14,000)
Provisions (489) (605)
(12,031) (18,877)
Total liabilities (61,601) (65,164)
Net assets 51,466 48,475
Equity
Share capital 10,693 10,611
Share premium 83 83
Other reserves 29,287 28,893
Accumulated profits 11,403 8,888
Total equity attributable to equity holders of the parent 51,466 48,475
Consolidated statement of changes in equity
For the year ended 31 December 2024
Note Share capital Share premium Other reserves Accumulated Total equity
£'000 £'000 £'000 (losses) /profits £'000 £'000
Balance at 31 December 2022 10,611 83 28,598 5,526 44,818
Profit for the year - - - 5,294 5,294
Other comprehensive expense for the year - - - (587) (587)
Total comprehensive income for the year - - - 4,707 4,707
Equity dividend paid 7 - - - (1,377) (1,377)
Credit to equity for share-based payments - - 295 - 295
Tax credit on credit to equity for share-based payments 6 - - - 32 32
Contributions by and distributions to owners - - 295 (1,345) (1,050)
Balance at 31 December 2023 and 1 January 2024 10,611 83 28,893 8,888 48,475
Profit for the year - - - 5,488 5,488
Other comprehensive expense for the year - - - (1,550) (1,550)
Total comprehensive income for the year - - - 3,938 3,938
Issue of equity share capital 82 - - - 82
Equity dividend paid 7 - - - (1,389) (1,389)
Credit to equity for share-based payments - - 394 - 394
Tax charge on credit to equity for share-based payments 6 - - - (34) (34)
Contributions by and distributions to owners 82 - 394 (1,423) (947)
At 31 December 2024 10,693 83 29,287 11,403 51,466
Consolidated cash flow statement
For the year ended 31 December 2024
Note Year ended Year ended
31 December 2024 31 December 2023
£'000 £'000
Net cash from operating activities 15 12,710 8,308
Investing activities (273) (390)
Purchases of property, plant and equipment
Expenditure on intangible assets 10 (4,427) (8,479)
Payment of deferred consideration for acquisitions - (71)
Proceeds from sub-leases 17 50
Net gain on forward contracts - 175
Net cash outflow from investing activities (4,683) (8,715)
Financing activities (1,066) (717)
Interest paid
Loan arrangement fees - (112)
Loan drawdown 8,000 8,750
Loan repayment (14,000) (1,000)
Proceeds on issue of shares 82 -
Principal paid on lease liabilities (768) (911)
Interest paid on lease liabilities (76) (77)
Equity dividend paid 7 (1,389) (1,377)
Net cash (used in)/from financing activities (9,217) 4,556
Net (decrease)/increase in cash and cash equivalents (1,190) 4,149
Cash and cash equivalents at beginning of year 6,797 2,856
Effect of foreign exchange rate changes (314) (208)
Cash and cash equivalents at end of year 5,293 6,797
1. General information
The basis of preparation of this preliminary announcement is set out below.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2024 or 2023 but is derived
from those accounts. Statutory accounts for 2023 have been delivered to the
Registrar of Companies and those for 2024 will be delivered following the
Company's annual general meeting. The auditor BDO LLP has reported on the
statutory financial statements for the year ended 31 December 2024 and the
audit report was unqualified.
Whilst the financial information included in this preliminary announcement has
been completed in accordance with International Financial Reporting Standards
(IFRSs), this announcement itself does not contain sufficient information to
comply with IFRSs. The financial information has been prepared on the
historical cost basis, except for financial instruments.
Copies of this announcement can be obtained from the Company's registered
office at St Mary's Court, 55 St Mary's Road, Sheffield S2 4AN.
The full financial statements which comply with IFRSs will be communicated to
shareholders via their selected preference and are available to members of the
public at the registered office of the Company from that date and are now
available on the Company's website: www.tribalgroup.com
(http://www.tribalgroup.com/) .
2. Revenue for contracts with customers
The Group has split revenue into various categories which is intended to
enable users to understand the relationship between revenue streams and
segment information.
31 December 2024 UK £'000 Australia £'000 Other APAC North America and Rest of the world Total £'000
£'000 £'000
Software and Support 30,455 7,089 2,243 1,711 41,498
Foundation Cloud Services 10,785 1,452 546 192 12,975
Professional Services 7,431 561 1,211 241 9,444
Core Student Information Systems (SIS) 48,671 9,102 4,000 2,144 63,917
Other software & services 3,562 5,258 - 5 8,825
Total Student Information Systems (SIS) 52,233 14,360 4,000 2,149 72,742
Schools inspections & other related services (QAS) 9,343 2 6 5,487 14,838
i-graduate survey & data analytics 1,013 117 982 316 2,428
Total Etio 10,356 119 988 5,803 17,266
Total 62,589 14,479 4,988 7,952 90,008
North America and Rest of
31 December 2023 UK £'000 Australia £'000 Other APAC £'000 the world Total £'000
£'000
Software and Support 27,681 6,868 2,207 1,872 38,628
Foundation Cloud Services 8,384 1,432 453 150 10,419
Professional Services 7,969 498 1,164 151 9,782
Core Student Information Systems (SIS) 44,034 8,798 3,824 2,173 58,829
Other software & services 3,316 6,424 - 9 9,749
Total Student Information Systems (SIS) 47,350 15,222 3,824 2,182 68,578
Schools inspections & other related services (QAS) 9,121 - 1 5,104 14,226
i-graduate survey & data analytics 1,214 370 1,076 286 2,946
Total Etio 10,335 370 1,077 5,390 17,172
Total 57,685 15,592 4,901 7,572 85,750
Net contract liabilities
Contract asset/ Contract asset/
(liability) (liability)
2024 £'000 2023 £'000
Opening contract balance (21,814) (19,469)
Of which released to income statement 21,814 19,328
New billings and cash in excess of revenue recognised (26,368) (21,673)
Closing contract balance (26,368) (21,814)
Balances arise on contract assets and liabilities when cumulative payments
received from customers at the balance sheet date do not necessarily equal the
amount of revenue recognised on contracts. Customers are on standard payment
terms, which may result in settlement of invoices prior to the recognition of
associated revenue.
Contract assets inherently have some contractual risks associated with them
related to the specific and ongoing risks in each individual contract with a
customer. The impairment of contract assets reflects provisions recognised
against contract assets in relation to these risks.
The amount of incremental costs to obtain a contract which extends over a
period of more than 12 months has been recognised as an asset in prepayments
totalling £0.1m (2023: £0.3m) and will be released in line with the total
contract revenue. No amount has been impaired at 31 December 2024 or 2023.
Remaining performance obligations
The amount of revenue that will be recognised in future periods on revenue
contracts entered into prior to 31 December when the remaining performance
obligations will be satisfied is analysed as follows:
At 31 December 2024
2025 2026 2027 Thereafter Total
£'000 £'000 £'000 £'000 £'000
Software and Support 39,929 38,854 16,294 563 95,640
Foundation Cloud Services 12,690 12,558 7,911 1,405 34,564
Professional Services 6,519 508 37 - 7,064
Core SIS 59,138 51,920 24,242 1,968 137,268
Other software & services 3,938 2,133 996 268 7,335
Total SIS 63,076 54,053 25,238 2,236 144,603
Schools inspections & other related services (QAS) 13,830 7,488 6,856 4,890 33,064
i-graduate survey & data analytics 1,371 567 78 59 2,075
Total Etio 15,201 8,055 6,934 4,949 35,139
TOTAL 78,277 62,108 32,172 7,185 179,742
At 31 December 2023 2024 2025 2026 Thereafter Total
£'000 £'000 £'000 £'000 £'000
Software and Support 37,810 36,765 22,502 504 97,581
Foundation Cloud Services 11,523 11,219 7,204 1,272 31,218
Professional Services 7,763 1,642 52 - 9,457
Core SIS 57,096 49,626 29,758 1,776 138,256
Other software & services 6,120 2,346 1,066 56 9,588
Total SIS 63,216 51,972 30,824 1,832 147,844
Schools inspections & other related services (QAS) 11,396 6,190 275 22 17,883
i-graduate survey & data analytics 1,764 903 453 - 3,120
Total Etio 13,160 7,093 728 22 21,003
TOTAL 76,376 59,065 31,552 1,854 168,847
An analysis of the Group's revenue, all from continuing operations is as
follows:
2024 2023 £'000
£'000
90,008 85,750
Sales of services
Total revenue 90,008 85,750
Further details of the nature of the services provided are disclosed in Note
3. Sales of goods are not material and are therefore not shown separately.
Included in sales of services is £1.3m (2023: £1.3m) related to software
license revenues recognised as a result of a periodic review of our license
entitlement resulting from changes in our customers' enrolled student numbers.
There is no revenue in respect of discontinued operations.
3. Business Segments
Information reported to the Group's Chief Executive for the purposes of
resource allocation and assessment of segment performance is focused on the
nature of each type of activity. The Group's reportable segments and principal
activities under IFRS 8 are detailed below:
• Student Information Systems (SIS) represents the delivery of software and
subsequent maintenance and support services and the activities through which
we deploy and configure our software for our customers, including software
solutions, asset management and information managed services; and
• Etio (ES) represents inspection and review services which support the
assessment of educational delivery, and a portfolio of performance improvement
tools and services, including analytics.
In accordance with IFRS 8 'Operating Segments', information on segment assets
is not shown, as this is not provided to the chief operating decision-maker,
being the Chief Executive. Inter-segment sales are charged at prevailing
market prices.
Revenue
Adjusted segment operating profit
Year ended Year ended Year ended Year ended
31 December 2024 31 December 2023 31 December 2024 31 December 2023
£'000 £'000 £'000 £'000
SIS 72,742 68,578 24,938 23,412
Etio 17,266 17,172 409 2,254
Total 90,008 85,750 25,347 25,666
Unallocated corporate expenses (11,921) (14,360)
Amortisation of acquired software and customer contracts & relationships (961) (725)
Adjusted operating profit 12,465 10,581
Exceptional items (see Note 4) (5,572) (3,320)
Operating profit 6,893 7,261
Finance income 137 308
Finance costs (1,172) (939)
Profit before tax 5,858 6,630
Tax charge (370) (1,336)
Profit after tax 5,488 5,294
Associated depreciation and amortisation is allocated to segment profits and
is included in adjusted segment operating profit as above. The amount included
in SIS is £2.7m (2023: £2.3m) and within Etio £0.2m (2023: £0.2m). The
accounting policies of the reportable segments are the same as the Group's
accounting policies. Segment profit represents the profit earned by each
segment, without allocation of central administration costs, including
Directors' salaries, finance costs and income tax expense. This is the measure
reported to the Group's Chief Executive for the purpose of resource allocation
and assessment of segment performance.
Within Etio revenues of approximately 9% (2023: 9%) have arisen from the
segment's largest customer; within SIS revenues of approximately 4% (2023: 4%)
have arisen from the segment's largest customer. These percentages are
calculated against total revenue.
Geographical information
Revenue from external customers, based on the geographical location of the
customer, is shown below:
2024 £'000 2023 £'000
UK 62,589 57,685
Australia 14,479 15,592
Other APAC 4,988 4,901
North America 3,243 3,650
Rest of the world 4,709 3,922
90,008 85,750
Non-current assets (excluding deferred tax)
2024 £'000 2023
£'000
UK 67,796 67,523
Australia 11,719 13,342
Other APAC 435 531
North America 13 27
Rest of the world 94 50
80,057 81,473
4. Exceptional Items
2024 £'000 2023
£'000
Acquisition related costs - 103
Takeover costs (191) (1,420)
Etio restructure (288) (1,003)
NTU settlement and associated costs (3,023) -
Impairment of development costs (1,405) -
Group restructuring and associated costs (665) (1,000)
Total exceptional items (5,572) (3,320)
The exceptional items are not part of the Group's underlying trading
activities and include the following:
Acquisition-related costs: Amounts relating to the consultancy and legal costs
of potential acquisitions (2024: charge of £nil, 2023: credit of £0.1m). The
credit in 2023 arose from the remeasurement of accounting for changes in the
fair value of the contingent deferred consideration as part of the earn-out
agreement with Eveoh BV, and the corresponding gain was recognised in the
income statement.
Restructuring and associated costs relate to the restructuring of the Group's
operations, including properties and the Education Services Restructure.
(2024: £1.0m, 2023: £2.0m). These costs relate to one-off initiatives that
support the Group's transition to a Pureplay EdTech, SaaS business.
Takeover costs: Amounts relating to the lapsed offer for Tribal Group plc by
Ellucian. (2024: £0.2m, 2023 £1.4m) were spent on due diligence and external
advisors.
NTU settlement and associated costs: Amounts payable in respect of the full
and final settlement with Nanyang Technological University ("NTU") resolving
all outstanding issues in relation to the contact between Tribal and NTU which
was terminated on 23 March 2023.
Impairment of development costs: Amounts relating to the impairment of the TDE
("The Data Engine") asset following an impairment review at the end of the
year, see Note 10.
5. Finance Costs
2024 £'000 2023 £'000
Interest on bank overdrafts and loans 1,105 717
Loan arrangement fees (24) 112
Interest expense on lease liabilities 76 78
Unwinding of discounts 15 32
Total finance costs 1,172 939
6. Tax
2024 £'000 2023 £'000
Current tax (72) (117)
UK corporation tax
Overseas tax 2,630 1,999
Adjustments in respect of prior years 9 (493)
2,567 1,389
Deferred tax (2,197) 502
Current year
Adjustments in respect of prior years - (555)
(2,197) (53)
Tax charge on profits 370 1,336
The continuing tax charge can be reconciled to the profit from continuing
operations per the income statement as follows:
2024 £'000 2023 £'000
Profit before tax on continuing operations 5,858 6,630
Tax charge at standard UK rate of 25.0% (2023: 23.5%) 1,465 1,558
Effects of: 274 342
Overseas tax rates
Expenses not deductible for tax purposes (33) 495
Adjustments in respect of prior years 9 (1,048)
Deferred tax on losses not previously recognised (1,204) -
Foreign exchange differences (84) -
Losses not recognised 15 92
Movement in IFRIC 23 tax provision (72) (117)
Effect of changes in tax rates - 14
Tax expense for the year 370 1,336
In addition to the amount charged to the income statement a deferred tax
charge of £34,000 (2023: credit of £32,000) has been recognised directly in
equity during the year in relation to Share Schemes.
A deferred tax charge of £8,000 (2023: £nil) has been recognised in the
Consolidated Statement of Comprehensive Income in relation to defined benefit
pension schemes.
The Group continues to hold appropriate uncertain tax provisions.
The income tax expense for the year is based on the UK statutory rate of
corporation tax for the period of 25.0% (2023: 23.5%).
Tax for other jurisdictions is calculated at the prevailing rates in the
respective jurisdictions.
7. Dividends
2024 £'000 2023 £'000
Amounts recognised as distributions to equity holders in the period: 1,389 1,377
Interim dividend for the year ended 31 December 2023 of 0.65 pence
(Final dividend for the year ended 31 December 2022 of 0.65 pence) per share
Proposed final dividend: 1,390 -
Proposed final dividend for the year ended 31 December 2024 of 0.65 pence
The Board regularly reviews the available distributable reserves of Tribal
Group plc to ensure they are protected for future dividend payments.
8. Earnings per share
Basic earnings per share and diluted earnings per share are calculated by
reference to a weighted average number of Ordinary Shares calculated as
follows:
2024 '000 2023 '000
Weighted average number of shares outstanding: 213,520 214,180
Basic weighted average number of shares in issue
Dilutive weighted average number of employee share options 2,515 1,626
Total weighted average number of shares outstanding for dilution calculations 216,035 215,806
Diluted earnings per share reflects the dilutive effect of LTIP and CSOP share
options for which vesting criteria have been met.
The maximum number of potentially dilutive shares, based on options that have
been granted but have not yet met vesting criteria, is 2,737,673 (2023:
3,300,128).
The adjusted basic and diluted earnings per share figures shown are included
as the Directors believe that they provide a better understanding of the
underlying trading performance of the Group. A reconciliation of how these
figures are calculated is set out below:
2024 £'000
2023
£'000
Net profit 5,488 5,294
Earnings per share 2.6p 2.5p
Basic
Diluted 2.5p 2.4p
Net profit (before exceptional items) * 10,138 8,811
Adjusted earnings per share 4.7p 4.1p
Basic
Diluted 4.7p 4.1p
* Net profit (before exceptional items) is calculated as below: 2024 £'000 2023 £'000
Operating profit (before exceptional items) 12,465 10,581
Finance income 137 308
Finance costs (1,172) (939)
Profit (before exceptional items) before tax 11,430 9,950
Tax charge (before exceptional items) (1,292) (1,139)
Net profit (before exceptional items) 10,138 8,811
9. Goodwill
2024 £'000 2023 £'000
Cost 109,755 110,407
At 1 January
Exchange differences (924) (652)
At 31 December 108,831 109,755
Accumulated impairment losses 81,231 81,231
At 1 January
At 31 December 81,231 81,231
Net book value 27,600 28,524
At 31 December
At 1 January 28,524 29,176
Goodwill acquired in a business is allocated, at acquisition, to CGUs that are
expected to benefit from the business combination. The carrying amount of
goodwill has been allocated as follows:
2024 £'000 2023 £'000
Student Information Systems (SIS) 24,066 24,990
Etio (ES) 3,534 3,534
27,600 28,524
Goodwill is reviewed at least annually for impairment by comparing the
recoverable amount of each CGU with the goodwill, intangible assets and
property, plant and equipment allocated to that CGU.
The recoverable amount of a CGU is determined based on value in use
calculations. These calculations use risk adjusted cash flow projections based
on the financial budget approved by management for the period to 31 December
2025. The budget was prepared based on past experience, strategic plans and
management's expectation for the markets in which they operate including
adjustments for known contract ends, contract related inflationary increases
and planned cost savings. From the budget a forecast was extrapolated by
product over a five-year period to give greater clarity on future cash flows.
Cash flows beyond the budget and extrapolation period were calculated into
perpetuity using a 2% growth assumption. This growth rate is in line with the
expected long-term growth rate of the markets in which the business operates.
The cash flow projections are discounted at a pre-tax discount rate of 13.2%
(2023: 16.0%). The single discount rate, which is consistently applied for
both CGUs, is determined with reference to available industry information and
reflects specific risks relevant to the Group.
Impairment testing inherently involves a number of judgemental areas,
including the preparation of cash flow forecasts for periods that are beyond
the normal requirements of management reporting, the assessment of the
discount rate appropriate to the Group and the estimation of the future
revenue and expenditure of each CGU. Accordingly, management undertook stress
testing to understand the key sensitivities and concluded as follows:
A rise in discount rate to 19.3% in SIS and 28.8% in Etio would trigger an
impairment. A decline in growth rate of EBITDA (6.5%) in SIS and (262.1%) in
Etio would result in an impairment.
Management does not believe a reasonably possible change in the key
assumptions would cause impairment.
10. Other Intangible Assets
Acquired software Acquired Customer contracts & relationships Acquired Development costs £'000 Business systems Software licenses Total £'000
£'000 £'000 Intellectual property £'000 £'000
£'000
Cost 12,582 9,902 1,873 55,314 75 44 79,790
At 1 January 2023
Additions - - - 8,479 - - 8,479
Exchange differences (383) (163) - (170) - - (716)
12,199 9,739 1,873 63,623 75 44 87,553
At 31 December 2023
Additions - - - 4,427 - - 4,427
Impairments - - - (1,526) - - (1,526)
Exchange differences (545) (232) - (229) - (1) (1,007)
At 31 December 2024 11,654 9,507 1,873 66,295 75 43 89,447
Amortisation 9,283 7,189 950 18,657 - 44 36,123
At 1 January 2023
Charge for the year 267 458 97 1,388 7 - 2,217
Exchange differences (383) (129) - (169) - - (681)
At 31 December 2023 9,167 7,518 1,047 19,876 7 44 37,659
Charge for the year 267 694 97 1,813 8 - 2,879
Impairments - - - (121) - - (121)
Exchange differences (545) (222) - (243) - (1) (1,011)
At 31 December 2024 8,889 7,990 1,144 21,325 15 43 39,406
Carrying amount
At 31 December 2024 2,765 1,517 729 44,970 60 - 50,041
At 31 December 2023 3,032 2,221 826 43,747 68 - 49,894
Software, customer contracts and relationships and intellectual property that
have arisen from acquisitions are amortised over their estimated useful lives,
which are 3 to 8 years and 3 to 15 years respectively. The amortisation period
for development costs incurred on the Group's product development is 3 to 15
years, based on the expected life cycle of the product. Amortisation and
impairment of development costs, amortisation for software, customer contracts
and relationships, intellectual property, business systems and software
licenses are all included within administrative expenses.
The Group is required to test annually if there are any indicators of
impairment and perform an impairment test on all assets which are under
development, irrespective of whether there is an indicator of impairment. The
recoverable amount is determined based on value in use calculations of
identified CGUs. The use of this method requires the estimation of future cash
flows based on the Group's mid-range plans; the key assumption that affects
this is revenue growth. This assumption has been sensitised as part of current
year testing.
The discount and growth rates are estimated using a pre-tax weighted-average
cost of capital ("WACC") that is indicative of current market assessments of
the time value of money, based on risks specific to the market in which the
Group operates.
Cash flow projections are prepared for a 15-year period from 31 December 2024
as this is the expected life cycle of the CGUs. The pre-tax discount rate used
in the models is 17.6%.
With respect to the TDE (The Data Engine) asset, this product has been put on
stop sell as the product strategy has shifted and consequently an impairment
review was required and this concluded that the asset should be fully
impaired, with a net impact of £1.4m. This has been included within
Exceptionals (Note 4).
Other products under development have been allocated to CGUs (SITS and
Callista) being the foundation products into which the new modules will be
incorporated.
The impairment testing allocates all assets relating to specific CGUs.
11. Trade and other receivables
2024 £'000 2023 £'000
Amounts receivable for the sale of services 11,637 8,834
Less: Allowance for expected credit loss (819) (665)
10,818 8,169
Other receivables 648 689
Prepayments 4,731 4,832
16,197 13,690
The Group's principal financial assets are cash and cash equivalents and trade
and other receivables which represent the Group's maximum exposure to credit
risk in relation to financial assets. The Group's credit risk is primarily
related to its trade receivables. The credit risk on liquid funds is limited
because the counterparties are banks with high credit ratings assigned by
international credit rating agencies.
All receivables are due within one year in both current and prior years.
The Directors consider that the carrying amount of trade and other receivables
approximates to their fair value.
Trade receivables
Trade receivables are measured at amortised cost. The average credit terms on
sales is 30 days (2023: 30 days). The Group sells the majority of its services
to the public sector or related bodies and institutions, and as such there is
a low incidence of default experience.
Of the total trade receivables balance at the end of the year there were four
customers (2023: three) who held balances outstanding of more than 5% (2024:
£4.0m; 2023: £1.7m). The average age of receivables is 37 days (2023: 29
days).
The Group applies the IFRS 9 simplified approach to measure expected credit
losses using a lifetime expected credit loss allowance for trade receivables
and accrued income. To measure expected credit losses on a collective basis,
trade receivables and accrued income are grouped based on similar credit risk
and ageing.
At 31 December 2024 the lifetime expected loss allowance for trade receivables
is as follows:
Expected loss rate Gross carrying amount Loss provision £'000
£'000
Current 0.4% 8,723 33
30-60 days 1% 563 6
60-90 days 35% 92 32
90-180 days 4% 1,519 61
180+ days 93% 740 687
Total 11,637 819
At 31 December 2023 the lifetime expected loss allowance for trade receivables
is as follows:
Expected Gross carrying amount
Loss provision
loss rate £'000 £'000
Current 1% 7,004 39
30-60 days 9% 715 62
60-90 days 18% 277 50
90-180 days 34% 399 137
180+ days 86% 439 377
Total 8,834 665
Movement in the expected credit loss allowance for trade receivables is as
follows:
2024 £'000 2023 £'000
Balance at the beginning of the year 665 194
IFRS 9 expected credit loss adjustment 583 491
Amounts written off during the year 16 (12)
Movements on unused amounts (445) (8)
Balance at the end of the year 819 665
Contract assets
Contract assets are measured at amortised cost. Contract assets inherently
have some contractual risks associated with them related to the specific and
ongoing risks in each individual contract with a customer. These are subject
to the expected credit loss impairment under IFRS 9.
Revenue provisions recognised in the income statement in respect of contract
assets amount to £0.1m (2023: £Nil).
12. Cash and cash equivalents
2024 £'000 2023 £'000
Cash and cash deposits 4,845 6,797
Other deposits 448 -
Cash and cash equivalents 5,293 6,797
Other deposits relate to restricted funds of £0.4m to settle contractual
payments under a grant scheme that the Group administers for the Department
for Education.
13. Trade and other payables
2024 £'000 2023 £'000
Current 960 1,283
Trade payables
Other taxation and social security 3,450 3,664
Other payables 2,624 955
7,034 5,902
Non-current 66 212
Other payables
66 212
Total 7,100 6,114
The average credit period taken for trade purchases is 30 days (2023: 30
days). For most suppliers, no interest is charged on the trade payables for
the first 30 days from the date of invoice. Thereafter, in some cases,
interest may be charged on the outstanding balances due to certain suppliers
at various interest rates. The Group has financial risk management policies in
place to ensure that all payables are paid within a reasonable time frame. The
Directors consider that the carrying amount of trade and other payables
approximates their fair value.
Other payables are split as follows:
2024 £'000 2023 £'000
Goods received not invoiced - 68
Grant creditor 448 -
Other creditors 509 887
NTU settlement 1,667 -
2,624 955
14. Borrowings
The Group has a £2.0m committed overdraft facility in the UK and a AUD$2.0m
committed overdraft facility in Australia, both facilities are committed for a
12-month rolling period ending August 2025 and October 2025 respectively. At
31 December 2024 none of the overdraft facilities were drawn.
On 29 December 2023 the Group entered into a three-year £20.0m multicurrency
revolving facility with HSBC, plus a £5.0m accordion, with the option to
extend by a further two years. On 10 January 2025 the first extension option
of one year was invoked. The facility was put in place to cover general
corporate and working capital requirements of the Group, as at 31 December
2024 £8.0m (2023: £14.0m) of the loan was utilised.
The facility interest charge is set at SONIA +1.45% and the loan is subject to
two covenants: Senior interest cover (ratio of EBITDA to Senior interest
charge) and Total debt cover (ratio of total debt to EBITDA). The Directors
have reviewed the forecast covenants and do not expect any breach for the
foreseeable future.
15. Notes to the cash flow statement
2024 £'000 2023 £'000
Operating profit from continuing operations 6,893 7,261
Depreciation of property, plant and equipment 433 566
Depreciation of right-of-use assets 889 1,004
Amortisation and impairment of other intangible assets 2,879 2,217
Impairment of development costs 1,405 -
Share-based payments 394 331
Movement in contingent deferred consideration - (115)
Research and development tax charge/(credit) 44 (141)
Net pension credit 13 (9)
Other non-cash items (280) (470)
Operating cash flows before movements in working capital 12,670 10,644
Increase in receivables (81) (423)
Increase/(decrease) in payables 2,273 (853)
Net cash from operating activities before tax 14,862 9,368
Net tax paid (2,152) (1,060)
Net cash from operating activities 12,710 8,308
Net cash from operating activities before tax can be analysed as follows:
2024 £'000 2023 £'000
Continuing operations 14,862 9,368
16. Analysis of net debt
2024 £'000 2023 £'000
Cash and cash deposits (Note 12) 4,845 6,797
Borrowings (8,000) (14,000)
(3,155) (7,203)
Reconciliation of changes in net debt 2024 £'000 2023 £'000
Opening net debt (7,203) (3,394)
Net (decrease)/increase in cash and cash equivalents (1,190) 4,149
Movement in borrowings 6,000 (7,750)
Restricted cash (448) -
Non-cash effect of foreign exchange rate changes (314) (208)
Closing net debt (3,155) (7,203)
Restricted cash relates to funds of £0.4m (2023: £nil) to settle contractual
payments under a grant scheme that the Group administers for the Department of
Education.
17. Alternative performance measures (APM)
A number of non-IFRS adjusted profit measures are used in this preliminary
announcement. Exceptional items are excluded from our headline performance
measures by virtue of their size and nature, in order to reflect management's
view of the underlying performance of the Group (see Note 4).
Summarised below is a reconciliation between statutory results to adjusted
results. The Group believes that alternative performance measures such as
adjusted EBITDA are commonly reported by companies in the markets in which it
competes and are widely used by investors in comparing performance on a
consistent basis without regard to factors such as depreciation and
amortisation, which can vary significantly depending upon accounting methods
(particularly when acquisitions have occurred), or based on factors which do
not reflect the underlying performance of the business. The adjusted profit
after tax earnings measure is also used for the purpose of calculating
adjusted earnings per share.
2024 £'000 2023 £'000
Statutory operating profit 6,893 7,261
Amortisation of development costs and acquired intellectual property 1,910 1,485
Amortisation of other intangibles 8 7
Depreciation of property, plant and equipment 433 566
Depreciation of right-of use assets 889 1,004
Amortisation of software and customer contracts and relationships 961 725
Exceptional items (Note 4) 5,572 3,320
Adjusted EBITDA 16,666 14,368
2024 £'000 2023 £'000
Adjusted EBITDA 16,666 14,368
Exceptional items (Note 4) (5,572) (3,320)
EBITDA after exceptional items 11,094 11,048
Depreciation and amortisation (4,201) (3,787)
Operating profit (EBIT) 6,893 7,261
Net financing costs (1,035) (631)
Profit before tax 5,858 6,630
18. Contingent liabilities and commitments
The Company and its subsidiaries have provided performance guarantees issued
by its banks on its behalf, in the ordinary course of business, totalling
£0.2m (2023: £0.1m). These are not expected to result in any material
financial loss and the likelihood of using these guarantees is assessed as
remote.
Tribal Holdings Limited, Tribal Dynamics Limited, International Graduate
Insight Group Limited and Semestry Limited have taken advantage of the
exemption available under Section 394A/479A of the Companies Act 2006 in
respect of the requirements for audit. As a condition of the exemption, the
Company has guaranteed the year-end liabilities of these subsidiaries until
they are settled in full. In 2023, International Graduate Insight Group
Limited prepared audited statements and did not take advantage of the
exemption. The liabilities of the subsidiaries at the year-end were £82.6m
(2023: £72.8m). These are inclusive of intercompany liabilities of £72.3m
(2023: £69.6m).
The Group delivers complex multi-year projects which from time to time give
rise to significant operational and commercial risks. Such risks may, in
certain circumstances, lead to potential negotiations or disputes with
customers which may give rise to consequential financial or commercial
obligations or liabilities arising.
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