REG - Tribal Group PLC - Trading Update and Notice of Results

TribalAnnouncement

23/02/2023 07:00

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RNS Number : 7739Q  Tribal Group PLC  23 February 2023

23 February 2023

Tribal Group plc

("Tribal" or "the Group")

Trading Update and Notice of Results

Cloud expansion driving growth in ARR

 

Tribal (AIM: TRB, "Group", "Company"), a leading provider of software and
services to the international education market, is pleased to provide an
update on trading for the year ended 31 December 2022 ("the Year").

Trading performance

The Board anticipates FY22 results will be in line with its expectations, set
at the time of the trading update released on 1 December 2022.

Continued sales momentum has resulted in increasing levels of recurring
revenues. Annual Recurring Revenue (ARR) at year end increased by 2.6% to
£52.5m (2021: £51.2m at constant currency), reflecting growth in the Group's
strategic products, offset by declining revenues as anticipated from Tribal's
non-core legacy and Australian schools' systems contracts.

Singapore contract update

As announced on 1 December 2022, the Group's trading performance has been
impacted by implementation delays on the Singapore contract, due to changing
scope and complexity, resulting in substantially increased ongoing costs and
lower recognisable revenue. Discussions with the customer have not progressed
satisfactorily and we remain in significant disagreement over the detailed
scope of the contract. We no longer expect a resolution in the near term and
will provide an update as and when appropriate.

Net debt

The Company closed the year with a net debt position of £3.4m (2021: cash of
£5.9m), which reflects an adverse movement in working capital as a result of
the issues surrounding the Singapore contract, and continued product
investment. The Board continues to review the Group's investment plans, with a
view to a reduction in capital expenditure in 2023. The year-end debt position
was £1m higher than expected due to receivables due by the year end not being
collected until early January.

During the year, payments of £1m on deferred consideration and £2.7m in
dividends were made. The Company's banking facilities consist of a £17m
multicurrency loan facility which expires in December 2024 and £3m of
overdrafts which are committed for a 12-month period ending August 2023 and
October 2023 respectively.

Positive sales momentum

The Group secured multiple new wins throughout the year, including three new
SITS:Vision customers (£0.9m ARR) and five major Tribal:Cloud migrations (ARR
value of £1.7m). During January 2023, a further three Cloud migration deals
have been signed with a combined ARR of £1.1m.

The Education Services division's trading performance continued to improve
throughout the year, securing several multi-million-pound, multi-year contract
renewals and new customer wins, providing a positive basis for growth in 2023.
The Board is considering its strategic options and opportunities for the
Education Services business.

Notice of Results

The Group expects to announce its audited full year results on 22 March 2023.

Mark Pickett, CEO of Tribal Group, commented:

 

"We continue to see momentum across the business, winning multiple cloud deals
along with an improved performance in our Education Services division. While
the delays with the Singapore contract have impacted our overall trading
position in 2022, the positive performance across the wider business
demonstrates the effectiveness of our cloud strategy and provides the Board
with confidence in a return to profitable growth in 2023."

 

 Tribal Group plc                                       Tel: +44 (0) 117 311 5293
 Mark Pickett, Chief Executive Officer
 Diane McIntyre, Chief Financial Officer

 Investec Bank plc (NOMAD & Joint Broker)             Tel: +44 (0) 20 7597 5970
 Virginia Bull, Will Godfrey, Nick Prowting

 Singer Capital Markets (Joint Broker)                Tel: +44 (0) 20 7496 3000
 Shaun Dobson, Tom Salvesen, Alex Bond

 Alma PR                                              Tel: +44 (0)203 405 0205
 Caroline Forde, Hannah Campbell, Will Ellis Hancock

 

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.

 

 

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