23rd Feb 2023 13:15
(Alliance News) - Tribal Group PLC on Thursday said that significant delays in its Singapore contract hurt its overall trading in 2022, though it noted that it is set to meet expectations for the year.
Tribal is a Bristol-based provider of software and services to the international education market. Shares were down 5.9% at 49.64 pence on Thursday afternoon in London. They are down 45% over the past 12 months.
Tribal has an eight-year contract with Nanyang Technological University in Singapore for the delivery of Tribal's cloud-based SITS:Vision Student Management System and its Tribal Edge solutions. The contract was originally announced back in April 2021.
Tribal explained that its 2022 trading performance was damaged by implementation delays on the Singapore contract, which came as a result of "changing scope and complexity".
This has resulted in "substantially" increased ongoing costs and lower recognisable revenue in the year, Tribal said.
Consequently, the company closed the year with a net debt position of GBP3.4 million, compared to net cash of GBP5.9 million at the end of 2021, reflecting the adverse movement in working capital as a result of issues around the Singapore contract, as well as continued product investment.
The company said it is currently reviewing its investment plans, and aims to reduce capital expenditure in 2023.
Tribal added that that discussions with the Singapore customer have not progressed satisfactorily, with Tribal remaining in "significant" disagreement over the scope of the contract. As a result, Tribal said it no longer expects a resolution in the near term.
"While the delays with the Singapore contract have impacted our overall trading position in 2022, the positive performance across the wider business demonstrates the effectiveness of our cloud strategy and provides the board with confidence in a return to profitable growth in 2023," said Chief Executive Mark Pickett.
Tribal said it expects 2022 results will be in-line with expectations, as continued sales momentum has resulted in increasing levels of recurring revenue.
At year-end, annual recurring revenue increased by 2.6% to GBP52.5 million from GBP51.2 million a year prior. Tribal said this reflected growth in its strategic products and offset expected declining revenue from its non-core legacy and Australian schools' system contracts.
Further, Tribal said that its Education Services division's trading performance continued to improve throughout the year. The division secured several multi-million-pound, multi-year contract renewals and new customer wins in 2022, Tribal said.
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Related Shares:
Tribal Grp.