24th Jan 2019 12:26
LONDON (Alliance News) - Tribal Group PLC on Thursday said its 2018 revenue is forecast to be lower than the year before, while earnings are likely to exceed expectations.
The education software and services provider predicted its 2018 earnings before interest, taxation, depreciation, and amortization will be "materially ahead of expectations".
Ebita was hurt by the adoption of the new IFRS15 accounting standard for revenue recognition. Without this, Tibal said, profit would have been "significantly higher".
Tribal's revenue was lower in 2018 than in 2017, as a result, which the company said was expected.
More positively, Tribal said it expects to report a widened operating margin for 2018 due to a combination of cost control and improved operating efficiency.
Tribal has also performed well in the UK higher education and further education colleges sectors, as well as in the Australian and New Zealand higher education sector.
However, the Australian schools sector was described as "challenging" and Tribal has put a restructuring plan in place. An approximately GBP1 million non-trading restructuring charge is expected as a result and revenue growth is not expected from this sector.
Tribal said it is currently "in dispute" with an undisclosed platform software supplier over historic royalty payments. Tribal said the dispute "may potentially lead to a material claim". If so, Tribal plans to "vigorously defend it".
As at December 31, the company's net cash stood at GBP20.0 million, up from GBP14.1 million year-on-year.
"I am pleased with the improved profit performance for the year. Tribal has won significant new customers in a competitive market and has a good pipeline of future opportunities. The improvement in margin through effective cost management continues the programme implemented in 2016. I look forward to continued momentum in 2019 and the years beyond," said Acting Chief Executive & Chief Financial Officer Mark Pickett.
IPickett took over CEO responsibilities in October after the sudden death of former CEO Ian Bowles.
Tribal said it expects to release its full-year results on March 19.
Shares in Tribal were up 1.8% at 78.08 pence on Thursday.
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