12th Aug 2015 08:08
LONDON (Alliance News) - Education software and services company Tribal Group PLC saw its shares sink in early trade on Wednesday, even as its loss for the first half narrowed and it hiked its interim dividend, as the group said its profit will be weighted to the second half.
Tribal said its pretax loss in the half was narrowed to GBP5.2 million from GBP7.3 million, as it booked GBP7.3 million in exceptional costs related to writedowns on the run-off of legacy contracts, compared to a similar GBP9.2 million charge a year before. But its adjusted pretax profit for the half, which relates to continuing operations and strips out exceptional costs, fell to GBP2.0 million, 60% lower than the GBP4.9 million it posted a year earlier.
The group reiterated that its profit for the full year will be strongly-weighted to the second half of the year, due to customer buying patterns and the timing of new project implementations, along with the effect of the renegotiation of its New South Wales Student Administration and Learning Management contract in Australia, which resulted in revenue deferrals and extra costs booked by Tribal in the first half.
Revenue in the half was down by 8.0% to GBP58.0 million from GBP63.4 million, as the group increased the proportion of its revenue derived from recurring software maintenance contracts to 26% from 17%.
Still, Tribal said it would pay a 0.7 pence per share dividend, up from 0.6p, and said its expectations for the full year are unchanged.
"As highlighted at the time of our [annual general meeting] in May, our profits in 2015 are expected to be strongly weighted towards the second half of the year. The principal causes are changing software customer buying cycles and software implementation programme profiles, which we believe are likely to become a long-term feature in our markets, and the effect of the SALM contract renegotiation," said John Ormerod, Tribal's chairman.
Ormerod added that the search for a new chief executive for the company is "progressing well". The company's former chief executive, Keith Evans, retired at the end of June, but is staying with the company until the end of the year to oversee the transition to his successor.
Tribal shares were down 6.8% in early trade to 150.73 pence, the worst performer in the FTSE All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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