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

TribalAnnouncement

31/01/2025 07:00

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RNS Number : 3628V  Tribal Group PLC  31 January 2025

This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation No 596/2014 which is part of English
Law by virtue of the European (Withdrawal) Act 2018, as amended. On
publication of this announcement via a Regulatory Information Service, this
information is considered to be in the public domain.

 

31 January 2025

Tribal Group plc

("Tribal" or "the Group")

 

Trading Update and Notice of Results

 

 Results ahead of market expectations as ARR growth flows through to revenue

 

Tribal (AIM: TRB), 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 2024 ("FY24" or "the Year").

 

Trading performance

 

Tribal expects to deliver a positive trading performance in FY24 with adjusted
EBITDA(1) substantially ahead and revenue ahead of current market
expectations(2). A strong performance by the software-led Student Information
Systems has offset a softening in markets for the Group's education
consultancy business, Etio.

 

Tribal generated higher levels of cash in the Year, resulting in a materially
improved net debt position of £3.2m which is well ahead of current market
expectations(2) (FY23: net debt of £7.2m), reflecting the continuing focus on
cost control and operational efficiency.

 

Closing Annual Recurring Revenue (ARR)(3) of the Core business increased by 9%
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. The FY24 results include
non-core legacy contract revenues of approximately £5m that are not expected
to continue at the same level in FY25. Overall ARR increased by 6.5% to
£57.0m (FY23: £53.5m at constant currency).

 

Subject to completion of the audit, the Board expects to recognise an
impairment to the value of £1.4m related to Tribal Data Engine with an
alternative Tribal product proving more cost effective for customers. This
will have no future cash impact on the Group. This reflects the Board's prior
decision to reduce overall R&D spend and focus sales efforts on a slimmed
down product set, leading with Admissions.

 

Outlook

 

Tribal's positive trading performance in FY24, reduced debt levels and
improved EBITDA margin have provided a strengthened foundation as the business
enters FY25 which will help to offset the anticipated continued decline in the
non-core business and £0.5m impact of higher employers' national insurance.
 

 

Whilst new customer generation was slower in FY24 than in prior years, the
Group has a growing pipeline across the business, an effective cloud strategy,
and continued ARR growth projected for FY25.

 

Notice of Results

 

The Group expects to announce its audited full year results on Thursday, 27
March 2025.

 

Mark Pickett, CEO of Tribal Group, commented: "I am pleased with the
performance delivered in FY24 as we focus on the transformation of Tribal into
a leading cloud provider to the education market. We have delivered EBITDA and
revenue ahead of expectations, alongside a material reduction in our debt, all
amidst a challenging market environment.

 

"The Group thrives on a strong customer base grounded in long-term
relationships. With a growing proportion of that base having now committed to
a cloud transition and structural improvements proving successful, we are
confident that Tribal is well positioned for the future."

 

Notes

(1) Adjusted EBITDA is stated before Exceptional items of £6m, reflecting NTU
settlement, TDE impairment and redundancy costs.

(2) In so far as the Board is aware, as 30 January 2025, consensus market
expectations for FY24 were Revenue of £85.6m, adjusted EBITDA of £14.4m, and
Net Debt of £9.4m.

(3) 'Core ARR' = Foundation, Cloud and Edge product sets.

 

 Enquiries:

 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, Nick Prowting, James Smith

 Singer Capital Markets (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, Emma Thompson

 

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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