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Tribal beats a different drum

RESULTS: Public sector outsourcer Tribal has finished ditching its lossmaking divisions – although, after rising strongly in recent months, the shares are now up with events

With its lossmaking divisions now sold, public sector outsourcer Tribal grew pre-tax profit 39 per cent in 2011 to £9.5m – after adjusting for various one-off items, including £5.4m of exceptional reorganisation costs. But that successful restructuring effort has helped the shares soar by 70 per cent since December, leaving them up with events.

IC TIP: Hold at 70p

New chief executive Keith Evans says Tribal has now "closed the door" on further exceptional reorganisation costs. That leaves the group free to focus on better performing operations and university student administration software is proving an especially robust growth driver for the technology unit, which generates 43 per cent of group sales. Sales there rose 5 per cent in 2011 to £46.6m, although the divisional operating margin did slip from 24 per cent to 20 per cent. Meanwhile, the services division, which provides schools inspections and teacher training, cut costs, which boosted its operating margin from 3 per cent to 8 per cent. Still, the group forward order book slipped 4 per cent to £178m, with the majority of the weakness coming from UK government contracts.

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