A sharp fall in demand from the UK education sector - as budget constraints meant a slowdown in procurement and spending decisions - has pushed education services providers Tribal (TRB) to fundamentally reorganise its business. But with half-year underlying operating profit having risen 15 per cent to £5.4m, that reorganisation appears to be paying off.
This progress is being significantly helped by the fact that tribal has increased the proportion of sales generated from outside of its UK market - to nearly a quarter of the total, compared with last year's 18 per cent. Indeed, a strategy of expanding into Australasia and North America helped Tribal's systems division to increase revenues by 24 per cent to £30.6m, while operating profit here rose 14 per cent to £5.8m. That unit now generates 39 per cent of its sales in overseas markets. By contrast, at the solutions business - where international business generated only 9 per cent of divisional sales - revenues and profits were largely flat at £31.7m and £1.9m, respectively.
The group's order book at the half-year stage has fallen to £145m from £168m at end-December, but that significantly reflects a business weighting towards the second half of the year. Broker Canaccord Genuity expects full-year pre-tax profit of £13.5m, giving EPS of 11.3p (from £12.8m and 10.9p in 2012).
TRIBAL (TRB) | ||||
|---|---|---|---|---|
ORD PRICE: | 208p | MARKET VALUE: | £195m | |
TOUCH: | 200-208p | 12-MONTH HIGH: | 208p | LOW: 84p |
DIVIDEND YIELD: | 0.6% | PE RATIO: | 19 | |
NET ASSET VALUE: | 65p* | NET DEBT: | 15% | |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
2012 | 57.0 | 2.76 | 2.20 | 0.40 |
2013 | 62.0 | 4.35 | 4.40 | 0.50 |
% change | +9 | +58 | +100 | +25 |
Ex-div: 16 Oct Payment: 20 Sep *Includes intangible assets of £92.4m, or 99p a share | ||||
