15th Sep 2016 08:37
LONDON (Alliance News) - Education support services company Tribal Group PLC said Thursday it intends to continue the simplification of its business with a cost-reduction program, as revenue dropped by 22% year on year in the first half of 2016.
Tribal reported a pretax loss of GBP2.8 million for the six months to the end of June, narrowed from GBP6.0 million loss a year before. Revenue dropped to GBP45.2 million from GBP58.0 million. Tribal said its adjusted operating profit was GBP500,00, down from GBP2.4 million.
Tribal declared no interim dividend, compared to 0.70 pence in 2015, and said it will return to a progressive dividend policy when financial performance has improved.
Tribal said the drop in revenue was driven by a reduction in contract revenue from UK schools inspector Ofsted and a planned withdrawal of non-core activities via the sale of its children's services IT business Synergy in April. The overall workforce was reduced by almost 15% since the end of December 2015. Tribal added that it now intends to deliver annual cost savings of GBP8.5 million by the end of 2016.
The proceeds of the Synergy sale, as well as a rights issue and directors' share subscriptions, generated GBP38.5 million for the company which was used to eliminate GBP33.0 million of bank borrowings. Tribal's net cash at June 30 was GBP5.7 million from a net debt of GBP32.5 million at the end of December 2015.
"I am pleased to report that the first half of the year has seen progress in line with the board's expectations, as we take actions to address the financial and operational challenges the group faced at the beginning of the year," said Chief Executive Ian Bowles.
"As previously highlighted, our profits in 2016 are weighted towards the second half of the year, as we see the H1 cost saving actions flowing through, improved utilisation in the Implementation teams, and seasonal skewing of results in Professional and Business Solutions. Our expectations for the full year are unchanged," Bowles added.
Shares in Tribal were down 0.4% at 55.30p Thursday.
By Adam Clark; [email protected]
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