16th Aug 2018 13:19
LONDON (Alliance News) - Tribal Group PLC on Thursday reported a sharp rise in interim profit due to increased student management fees, and despite a fall in revenue.
In the six months ended June 30, the education software company's pretax profit increased 83% to GBP4.2 million from GBP2.3 million. Revenue decreased 4.9% to GBP42.0 million from GBP44.2 million the year before.
First half adjusted operating profit increased 26% to GBP6.3 million from GBP5.0 million.
The profit rise was driven the by 6% constant currency profit growth of the Student Management Systems division to GBP9.3 million from GBP8.7 million.
The division increased its licence & development fees by 15% and cloud services by 21%, both at constant currency.
The dip in total revenue came from the end of the company's contract with Ofsted Early Years, which finished in March 2017. Excluding that contract, Tribal's revenue was up 0.5%.
This adjusted revenue growth was driven by the company's Quality Assurance Solutions business, which had 13% constant currency revenue growth, minus the Ofsted contract, to GBP9.6 million from GBP8.5 million.
The unit's revenue also increased due to school inspections contracts in the Middle East, mainly Abu Dhabi, Dubai and northern Emirates.
Tribal is not proposing an interim dividend, like last year, but has reinstated a 1.0 pence per share dividend to be paid following the annual results.
Looking ahead, Tribal believes it has made "good progress" in the half and expects market conditions and demand to remain stable for the rest of the year.
The company's outlook remains unchanged, which includes a 7% to 8% drop in adjusted operating profit due to the adoption of IFRS15.
Chief Executive Officer Ian Bowles said: "The first half results clearly demonstrate our continued execution of the board and management teams' strategy. The first phase of the turnaround started in 2016 is now complete; however, we will continue to focus on driving operational efficiencies with a view to continuing to lower our cost base. Our revitalised sales and marketing efforts have continued to gain market share in our core markets displacing over 20 competitive student management systems and replacing four home grown solutions in universities.
"Our commitment to invest in our product strategy has been well received by our customers; as a group we look forward to the future with confidence."
Shares in Tribal were flat Thursday at 89.40 pence each.
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