Tribal Group plc
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Tribal Group plc Preliminary results for the nine months ended 31 December 2007 Peter Martin Chief Executive Simon Lawton Group Finance Director 26 March 2008. Contents. Highlights Financial review Operational review Prospects. Highlights. Nine months to 31 December 2007

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Contents

Tribal Group plcPreliminary results for the nine monthsended 31 December 2007Peter MartinChief ExecutiveSimon LawtonGroup Finance Director26 March 2008


Contents

Contents

  • Highlights

  • Financial review

  • Operational review

  • Prospects


Highlights

Highlights

Nine months to 31 December 2007

  • Revenue growth of 11%

  • Adjusted profit before tax up 98% to £11.1m (2006 : £5.6m)

  • Adjusted diluted EPS up 112% to 8.9p (2006 : 4.2p)

  • Final dividend of 1.8p; annualised increase of 13%

    Pro forma 12 months to 31 December 2007

  • Adjusted profit before tax up 20% to £15.8m (2006 : £13.2m)

  • Adjusted diluted EPS up 20% to 12.7p (2006 : 10.6p)

  • Cash conversion 142%

  • Net debt reduced substantially to £6.8m


Contents

Financial review

Simon Lawton

Group Finance Director


Income statement 9 months

Revenue increase of 11%

Operating profit* up 39% to £11.7m

Significant fall in interest and bank fees

Order book of £124m (2006: £108m)

Bidding pipeline at £168m (interims: £84m)

Final dividend of 1.8p total. Dividend of 2.95p, equivalent annual increase of 13%

Income statement (9 months)

* Before amortisation of intangibles, share option costs, goodwill impairment and financial instrument costs


Pro forma income statement 12 months

Pro forma year ended 31 December

2007

£m

2006

£m

Growth

%

Continuing Operations

Turnover

256.5

233.7

+10%

Revenue

209.2

194.3

+8%

Operating profit*

17.7

17.0

+4%

Operating margin

8.5%

8.7%

Interest

(1.9)

(3.8)

Profit before tax*

15.8

13.2

+20%

Tax

(4.3)

(3.9)

Profit after tax*

11.5

9.3

+24%

Adjusted fully diluted EPS* (pence)

12.7p

10.6p

+20%

No of WA diluted shares (‘000)

84,795

81,398

+4%

Pro forma income statement (12 months)

* Before amortisation of intangibles, share option costs, goodwill impairment and financial instrument costs


Committed revenue growth

Committed revenue growth

£m


Committed revenue

% of Total

Education

£91m

74%

Consulting

£14m

11%

Support Services

£19m

15%

£124m

2008

£84m

2009

£35m

2010 and beyond

£5m

Committed revenue

At 1 January 2008

£5m

£55m

£31m

£1m

£13m

£16m

£3m


Balance sheet

Balance sheet

  • Balance sheet significantly strengthened by profitable sale of Mercury Health

  • Goodwill impairment of £9m for resourcing business (no change to interims)

  • Strong working capital management

  • Deferred consideration of £3m will be settled in cash in May

  • Gearing of 4% (31 March 2007 : 47%)

  • Retained earnings significantly improved to £37m


Group cash flow

Group cash flow

  • Operating profit to cash flow conversion for continuing operations of 142% (2006: 124%)

  • Refund of tax of £1.6m due to prior year one-off HMRC win

  • Capital expenditure of £6.5m (2006: £15.8m)

    includes product development costs of £2.3m (2006: £1.7m)


Contents

Group net debt

  • £40m bank facility until June 2012 with HBoS and HSBC

  • Protected against future interest rate increases by interest rate swaps through to 2010 at 4.99%


Contents

Operational review

Peter Martin

Chief Executive


Analysis

Analysis

Nine months to December 2007


Education

Education


Consulting

Consulting


Support services

Support services


Management

Management

  • Group HR Director appointed November 2007

  • Appointment of COO well-advanced

  • Several senior appointments made or planned

  • Senior Leadership team now fully established

  • Focus on collaboration:

    • Respond to client needs

    • Develop integrated solutions

  • Formal management reviews completed:

    • Succession planning

    • Talent development


Contents

Prospects

Peter Martin

Chief Executive


Macro environment

Macro environment

  • Comprehensive Spending Review (CSR), October 2007

    • Above average awards for education (5.6% p.a.) and health (4.0% p.a.)

  • Budget statement (March 2008)

    • Confirmed CSR spending plans

    • Extra funding for education

  • Gordon Brown (FT, 9 March 2008)

    • “…greater diversity of providers, more choice and …more competition…”

  • Continuing government agenda:

    • Public sector reform

    • Focus on efficiencies

    • Better value for money


Group strategy

Group strategy

Delivery

Consulting

  • Focus on core public sector markets:

    • Education

    • Health

    • Housing & Regeneration

    • Local government

    • Central government

  • Services span consulting, support and delivery

  • Development of integrated service offerings

  • Investment in growth areas

    • Health commissioning

    • BSF

    • Recruitment process outsourcing

  • International development

  • Selective acquisitions

Support


Financial objectives 2008 2010

Financial objectives (2008 – 2010)

  • Target double digit organic growth in annual revenue over the medium-term

  • Progressive improvement in operating margins

  • Increase committed income to 60% of annual revenue (from current ~40%)

  • Enhance earnings growth through selective acquisitions

  • Progressive dividend growth


Current trading

Current trading

  • Trading in line with our expectations since the start of the year

  • Delivered plus committed revenue 55% of 2008 plan at end of February

  • Continuing investment / higher bid activity in H1 2008, particularly in education

  • 2008 will benefit from reduced interest charge

  • Pipeline of opportunities is strong

  • Look forward to 2008 and beyond with confidence


Contents

Tribal Group plcPreliminary results for the nine monthsended 31 December 2007End


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