1st Mar 2016 09:08
LONDON (Alliance News) - Servelec Group PLC on Tuesday said it has agreed to acquire a unit of education support services company Tribal Group PLC and said it has won a slew of new contracts as its profit and revenue grew in 2015.
The software company said it has agreed to acquire Tribal's Synergy unit, which provides software to local authorities used in managing children's services, for GBP20.3 million in cash. Synergy is implemented in more than 100 local authorities in the UK, Servelec said.
From 2020, legislative changes in children's services in the UK will mean all local authorities will take responsibility for children's community health by 2020 and Servelec said the acquisition will leave it well positioned to benefit from this shift.
Tribal said it will use the proceeds from the sale to cut its debt pile and said the disposal will leave it focused on its core business serving universities, colleges and schools.
In a separate statement on Tuesday, Servelec also said it has won several project contracts for its Technologies division from utilities related to the implementation of the AMP6 regulatory period.
Servelec has won two lots from Southern Water, including the supply of remote telemetry units and business optimisation software, and has won another deal from an unnamed UK water company for software and hardware upgrades to a clean water treatment works plant.
The deals are worth between GBP5.0 million and GBP10.0 million, Servelec said, adding the wins would help position the group well to cope with a downturn in orders from oil and gas customers.
Servelec also published its results for 2015, with pretax profit rising to GBP13.4 million from GBP10.6 million in 2014 and revenue up to GBP63.1 million from GBP51.8 million.
The group said it benefited from a good year of contract wins for its healthcare-focused business and secured an offshore platform contract in its automation unit, along with wins in the power and nuclear sector following an investment made in that business.
Servelec will pay a final dividend of 3.5 pence per share, taking its total payout to 5.15p, up from 4.65p in 2014.
"We are pleased to deliver an overall result that is in line with market expectations. The mix might be slightly different but this demonstrates the benefits of our diversified business model. The outlook is positive for the group in 2016 with a strong order book and improving market conditions," said Alan Stubbs, Servelec's chief executive.
Servelec shares were up 4.6% to 332.50p on Tuesday morning, while Tribal shares were up 16% to 46.00p.
By Sam Unsted; [email protected]; @SamUAtAlliance
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