25th Apr 2007 07:00
Tribal Group PLC25 April 2007 25 April 2007 Tribal Group plc ("Tribal Group" or the "Group") Trading Update Statement and Management Changes Trading update Tribal Group plc, one of the UK's leading consultancy and professional supportservices companies, issues this statement as an update on trading for the yearended 31 March 2007. The Group's preliminary results will be announced on 4 July2007. The board reports a stronger trading performance for the Group in the secondhalf of the year. Excluding the forecast profit from the Peterborough PFIhospital scheme, which is now expected to reach financial close during thesummer, we expect adjusted profit before tax and eps for the year to becomfortably in the range of market forecasts, having fully absorbed the costs ofdiscontinued businesses and restructuring. Gross revenue exceeded £230m. Cash generation in the second half was excellent and net debt at the year endwas approximately £57m. Operating profit to cash conversion was over 130%. The sale of the Group's healthcare delivery business, Mercury Health, to Care UKPlc was completed on 20 April 2007. The disposal of Mercury Health is a verysuccessful outcome for the Group enabling us to crystallise the value of thebusiness and substantially reduce our borrowings. The gross sale proceeds were£77m, which after deduction of debt and costs, equates to net cash proceeds of£52m. The profit on disposal was £27m. Following the sale of Mercury Health,Tribal Group's balance sheet is substantially strengthened with pro forma netdebt reducing to well below £10m. Throughout the year, we saw strong markets in education, housing and centralgovernment. After a slow start to the year, we have recently seen better marketconditions in health and local government. Our education division has continued to grow revenue and profits. Tribal is verywell placed in the education and learning market and is winning an increasingnumber of significant longer term contracts. The performance of our consultancy services business was disappointing for theyear as a whole, impacted by market weakness in the early part of the year inthe specific areas of healthcare staff supply, local government consulting andhealthcare PFI. Trading did, however, improve in the second half. We have made significant reductions to our cost base in consulting services,exiting peripheral and underperforming businesses and substantially reducingheadcount. We have also made further progress in rationalising our supportinfrastructure and achieving benefits from our procurement strategy. We expectto see the benefits of these changes in the current financial year. Following the sale of Mercury Health, the Group continues to focus on thedevelopment of our core consulting, support services and emerging servicedelivery businesses. Management changes Tribal also announces today that Henry Pitman, Tribal Group's founder, hasdecided to stand down as Chief Executive with effect from 4 June 2007. He willremain on the Board as a non executive director. The Board is pleased toannounce that Peter Martin will be appointed as the new Chief Executive witheffect from that date. Peter is a Group executive director who has been involvedwith Tribal Group since 2000. He initially led the Group's acquisition anddevelopment strategy and, since early 2004, was Chief Executive of MercuryHealth, until its recent sale. Simon Lawton will continue as Group Finance Director, a position he has heldsince 1999. They will be joined on the executive management team by JimChambers, the current Chief Executive of the education and technology division,who will become Chief Operating Officer. The Board would like to thank Henry for his enormous contribution to TribalGroup over the last seven years during which time Tribal Group has become one ofthe major providers of consultancy and outsourced services to the UK publicsector. Outlook With record committed income, in the continuing business, of £131m, the Board isconfident about the Group's prospects in the current year and beyond. End For further information contact: Henry Pitman, Chief Executive, Tribal Group plc Tel: 01285 886020Simon Lawton, Group Finance Director, Tribal Group plc Tel: 01285 886020Peter Martin, Chief Executive designate, Tribal Group plc Tel: 01285 886020Colin Browne, Maitland Tel: 020 7379 5151 A presentation will be made to analysts and investors at 9am on 25 April 2007and a copy of this will be made available later that morning on the Tribal Groupwebsite. Editors' note: Tribal Group plc provides a range of consultancy and support services to the UKpublic sector. The Group's core markets are in education; local government,housing and regeneration; health and social care; and central government. TheGroup employs 2,000 staff in the UK. Tribal is quoted on the London StockExchange (TRB.L). Links: Tribal Group plc website: www.tribalgroup.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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