REG - Tribal Group PLC - Interim Results for six months ended 30 June 2024
20/08/2024 07:00
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RNS Number : 0087B Tribal Group PLC 20 August 2024
Tribal Group plc
("Tribal" or "the Group")
Interim Results for the six months ended 30 June 2024
Tribal (AIM: TRB), a leading provider of software and services to the
international education market, is pleased to announce its interim results for
the six months ended 30 June 2024.
Results 2024 H1 2023 H1 Change Change %
6 months to 30 June 2023 H1 Reported Constant Currency(3) (Constant Currency) (Constant Currency)
Revenue £44.9m £43.4m £42.7m £2.2m(3) 5.2%(3)
Adjusted EBITDA (2) £7.4m £8.1m £7.9m £(0.5)m(3) (6.8)%(3)
Adjusted EBITDA Margin (2) 16.4% 18.6% 18.5% (2.1)pp(3) -
Annual Recurring Revenue (ARR) £54.4m £54.5m(1) £54.2m(1) £0.2m(3) 0.4%(3)
at period end (1) (versus 31 Dec 2023)
Net (Borrowing)/Cash £(10.0)m £(12.9)m £(12.9)m £2.9m 22.4%
Statutory Profit after Tax £1.4m £4.7m £4.5m £(3.1)m (68.9)%
Statutory Earnings per Share (basic) 0.6p 2.2p 2.1p (1.5)p (71.4)%
Financial performance
· Steady overall financial performance, delivering revenue growth, stable
adjusted EBITDA margins on an underlying basis (ex Nanyang Technology
University (NTU) provision release), a return to positive operating cash
inflow and reduction in net debt.
· ARR remained stable, with core product ARR increasing from £50.9m to £52.1m
on a constant currency basis, offsetting the anticipated decline in non-core
business.
· NRR increased to 107% (H1 2023: 101%) given lower churn, successful upsell to
existing customers and growth in cloud recurring revenues as previously won
ARR on cloud contracts flows through into the P&L.
· Revenue increased 5.2% to £44.9m on a constant currency basis:
o Student Information Systems revenue grew 6.1% to £35.2m, driven by growth in
Cloud revenues and new modules and inflationary increases to Tribal's
Foundation products.
o Etio (formerly Education Services) revenue grew 2.2% to £9.7m from increased
UK revenues.
· Adjusted EBITDA grew 7.2% to £7.4m, a 16.4% margin, on a constant currency
basis versus underlying adjusted EBITDA in H1 2023 of £6.9m, a 16.2% margin,
reflecting growing Cloud revenues and Cloud cost efficiencies. The underlying
H1 2023 comparator excludes the c£1m positive impact from the NTU onerous
contract provision release in H1 2023.
· Statutory Profit after Tax for the year decreased to £1.4m driven by
increased exceptional costs of £3.4m (H1 2023: £0.4m), of which £2.8m
relates to the NTU settlement.
· Operating cash inflow increased to £2.0m (H1 2023: £(3.4)m), despite £1.7m
cash outflow from exceptional costs, mainly due to restructuring charges
recognised in 2023. Free cash outflow, reflecting traditional weighting of
renewals to H2 improved to £(1.9)m (H1 2023: £(9.4)m).
· Net debt at 30 June 2024 reduced to £(10.0)m (H1 2023: £(12.9)m).
· As announced on 21 March 2024, the Board stated that it intended to pay an
interim dividend but deferred its decision on quantum. Given the NTU
settlement has now been finalised and there has been an improved cashflow
performance in FY24, the Board intends to pay an interim dividend to
shareholders of 0.65pps at the end of November 2024.
Operational highlights
· Sales performance impacted by pause in new sales conversations whilst the
Group was in an offer period and universities' ongoing caution in the light of
potential lower international student numbers, but sales pipeline improving in
H2.
· Continued focus on operational efficiency and organisational restructuring to
support the Group's SaaS ambitions, with a cost reduction programme
implemented in 2024 to protect Group profit margins through the transition to
SaaS.
· Continued innovation, with a focus on optimising two of Tribal's leading SIS
solutions, Callista in Australia and SITS for cloud deployment, both of which
focus on transforming the core Student Management System (SMS) products into
enduring, future-proofed software.
· During H1 2024 the Board decided to transition to an industry standard SaaS
pricing model to cover the comprehensive suite of cloud offerings and positive
engagement with all customers remains ongoing to ensure this transition is
successful.
· Education Services rebranded as "Etio" bringing the Group's Education Services
businesses worldwide under a single unified brand that supports international
collaboration and dialogue, and advocates the vision to elevate education,
everywhere.
Outlook
· The Board is confident in achieving FY24 results in line with market
expectations(4), thanks to the Company's solid foundation of recurring revenue
and ongoing emphasis on building operational efficiency and cost control.
Mark Pickett, Chief Executive, commented:
"We delivered a steady overall financial performance in the first half of the
year, while achieving our principal aims of resolving the NTU contract and
refocussing the business following the end of the Offer period. We have
introduced initiatives to accelerate the transformation of Tribal into an
EdTech SaaS business, with a view to growing ARR, safeguarding our operating
profit margins, increasing cash flow generation and enabling the ongoing
reduction in our debt. Our growing suite of sophisticated cloud-based
solutions, market leading position in multiple geographies and foundation of
recurring revenues provide us with a strong position as we seek to empower the
world of education with products and services that underpin student success."
(1 ) Annual Recurring Revenue (ARR) at period end includes Support &
Maintenance fees, Cloud Services and Subscription Licences and is assessed as
contracted ARR at 30 June 2024 and 31 December 2023, of which some is still to
be delivered. NRR is calculated as a 12 month rolling percentage of recurring
revenue retained from existing customers at 1 July including upsells as well
as contract expiry, cancellations or downgrades in the year.
(2 )Adjusted EBITDA and Adjusted EBITDA Margin are in respect of continuing
operations and are calculated by taking the Adjusted EBITDA after the
allocation of Central Overheads and excludes Interest, Tax, Depreciation and
Amortisation and exceptional items of £5.7m (2023: £2.1m).
(3 )2023 H1 results restated to "constant currency" using 2024 rates to
exclude foreign currency impact. All change movements are to prior year
constant currency.
(4) In so far as the Board is aware, prior to this announcement, consensus
market expectations for FY24 were for revenue of £85.75m, adjusted EBITDA of
£14.35m and net debt of £9.35m.
Tribal Group plc Tel: +44 (0) 330 016 4000
Mark Pickett, Chief Executive Officer
Diane McIntyre, Chief Financial Officer & Company Secretary
Investec Bank plc (NOMAD & Joint Broker) Tel: +44 (0) 20 7597 5970
Virginia Bull, Nick Prowting, Alice King
Singer Capital Markets Limited (Joint Broker) Tel: +44 (0) 20 7496 3000
Shaun Dobson, Tom Salvesen, Alex Bond
Alma Strategic Communications Tel: +44 (0) 203 405 0205
Caroline Forde, Hannah Campbell
About Tribal Group plc
Tribal Group plc is a pioneering world-leader of education software and
services. Its portfolio includes Student Information Systems; a broad range of
education services covering quality assurance, peer review, benchmarking and
improvement; and student surveys that provide the leading global benchmarks
for student experience. Working with Higher Education, Further and Tertiary
Education, schools, Government and State bodies, training providers and
employers, in over 55 countries; Tribal Group's mission is to empower the
world of education with products and services that underpin student success.
Chief Executive's review
With the corporate developments of FY23 now behind us and an agreement reached
with NTU in H1 FY24, our focus is on the reinvigoration of the business,
supporting the continued transformation of Tribal into an EdTech SaaS
business. Customer wins were lower than in prior periods, reflecting the pause
in new business discussions whilst the Group was within an Offer period;
however, our cloud customer base continued to expand their engagements with
us, and we successfully completed several significant customer implementations
and are pleased to report 26% growth in cloud revenues. We continue to
modernise our operational structure and product offerings to align with our
focused SaaS business model and completed the reorganisation of the Education
Services division, now rebranded 'Etio' to better position it for sustained
growth. Group ARR remained stable, and underlying core product ARR increased
from £50.9m to £52.1m on a constant currency basis, offsetting the
anticipated decline in our non-core business.
NTU
As announced on 25 May 2024, we were pleased to confirm that following a
mediation with NTU, Tribal reached a settlement agreement resolving all
outstanding issues in relation to the terminated contract between Tribal and
NTU. Without admission of liability, the Company has agreed to pay to NTU the
sum of £3.1m in full and final settlement, to be paid out of the Company's
cash flow over the 18 months from May 2024. An exceptional charge of £0.6m
was recognised in 2023 and a further exceptional charge of £2.5m has been
recognised during the first half of 2024 The Company continues to explore the
availability of insurance coverage in respect of the amount paid to NTU and
its costs incurred in the dispute.
Whilst we have not taken the decision to settle with NTU lightly, we believe
it is in the best interest of all stakeholders to have drawn a line under this
issue. We are pleased this decision brings an end to the legal uncertainty
created by the dispute and the incurrence of further legal costs in respect of
it. Resolving the matter also relieves the associated demands on management
time, allowing Tribal's management to focus that time on developing the
business.
Strategy
Our strategic focus over the recent years has been the transition of the Group
to a pureplay EdTech, SaaS business, making all of our SIS products available
in the cloud, while developing our new Edge modules to meet the evolving needs
of universities.
During the first half of 2024, the Board made the decision to transition to a
new pricing model for what is now a comprehensive suite of cloud offerings,
providing modules as a bundle at a single price. Through this, we aim to
simplify access to our product suite for customers, while aligning with
industry standard SaaS pricing and supporting a clear transition pathway to
full cloud adoption. We are currently engaging with all customers on this
transition, ensuring they have the support required to make this a success for
all parties.
We believe our pricing strategy will enable customers to take advantage of
modern technology to deliver the experience staff and students deserve,
maximise revenue generation opportunities, ensure cyber resilience and
ultimately provide cost savings to customer through a lower Total Cost of
Ownership of their Student Management System, making it an attractive solution
in a landscape where universities are under increasing financial pressure.
As we develop future modules, they will automatically become available through
the product bundle to our customers, depending on their pricing tier and
providing incentivisation to adopt more Tribal products and upgrade to
subsequent tiers.
With a clear direction of travel, focused on the delivery of our
market-leading products as a cloud-based solution, and educating our customers
on the opportunity and need to transition to the cloud, we are confident in
our ability to continue to deliver top line growth in FY24 and beyond.
Product development and innovation
Innovation continued at pace during H1 2024, with a focus on optimising two of
our leading SIS solutions, Callista in Australia and SITS for cloud
deployment. Both initiatives focus on transforming our core Student Management
System (SMS) products into enduring, future-proofed software. This includes
reimagining the user experience for web platforms, standardising processes and
integrations, enhancing the underlying platform to match modern
interoperability expectations, and delivering via a redesigned infrastructure
that takes advantage of latest cloud technologies. We have commenced migrating
our Callista customers to the Tribal cloud and SITS version 10.8 is now live.
Alongside this, H1 2024 saw the start of the transformation of the scheduling
software we acquired through Semestry, TermTime v9.0 which will be released
later this year.
In FY23, we successfully went live with our first Admissions product, a next
generation, native SaaS solution, built using Edge technology, with Edith
Cowan University. This was a key milestone for Tribal, successfully
implementing a complex solution which is a critical system for a university.
We are continuing to develop Admissions, working on more functional areas and
are on track towards making Tribal Admissions generally available in 2025,
compatible with both Callista, SITS and non-SITS customers.
In H2 2024, we will continue to focus on these projects and also explore new
creative investment opportunities in our Further Education and Vocational
Learning (VL) markets, through our ebs and Maytas products.
Student Information Systems (SIS)
Student Information Systems, our core segment which targets the further and
higher education sectors through our range of software solutions, secured one
new SITS Cloud customer in the half-year, the Institute of Tourism Studies
Malta for a total contract value of £0.7m, adding £0.1m to ARR. In July
2024, post period end, another new SITS customer was secured with SOAS
University signing a 5-year contract with a total contract value of £2.5m,
including ARR of £0.4m. These contracts include implementation of SITS and
hosting on the Tribal Cloud.
We successfully delivered 15 "go-lives" in the half, across our SITS, Cloud,
Dynamics and Maytas solutions in our key geographies following contracts won
in previous years. Highlights include British University Vietnam, The
University of Waikato, and the University of Exeter, which was the most
strategic implementation, delivering a complex SITS Cloud migration project
for the 30,000 student Russell Group university in just eight months.
Delivering this high level of implementation in a short period is a fantastic
achievement for the Group, demonstrating the hard work of our colleagues and
excellent collaboration with our customers globally.
Etio (formerly Education Services)
Last year, we implemented a strategy for the Education Services business,
targeting sustainable growth. The aim of the new strategy was to create a
clear identity for the Education Services business and better articulate the
value it creates for our customers. As part of this aim, the Education
Services business has now rebranded as "Etio", bringing together all our
Education Services' businesses worldwide under a single brand name, creating a
unified brand that supports international collaboration and dialogue, and aid
the business in the vision to elevate education, everywhere.
Etio will continue our work with education institutions, bodies and
governments around the world to help them improve secure better futures for
the populations they serve. We achieve this through four cornerstones of
delivery:
· Education Review: Supporting system-wide knowledge,
accountability, and quality improvement.
· Education Transformation: Accelerating impact through strategic
planning, expanded leadership, and enhanced capability.
· Education Workforce Development: Preparing, equipping and
empowering a high-performing workforce.
· Performance Benchmarking: Driving world-class financial
performance and student experience through evidence and comparative insights.
A principal focus this half has been on developing Etio as a standalone entity
to drive future growth. Etio's performance was slower than prior periods as
the general election in the UK led to a pause in customer decision making.
The business also saw slower activity in the Middle East. However, the
investment in Etio's business development and marketing functions, and
alignment of leadership expertise within key markets, mean Etio is now more
efficiently structured and organised to drive growth once market activity
picks up.
In H1 2024, Etio signed a new £2.1m contract with the Emirates Schools
Establishment for QAS in the UAE, for teacher training online content and a
£0.3m contract with the Massachusetts Department of Elementary and Secondary
Education for QAS to support emergency licence holders.
Operations and people
We continue to remain focused on ensuring the right balance in our people
resources, demonstrating a high degree of change agility in aligning to
company strategy and objectives. This is creating an evolving organisation,
designed to allow us to realise our Full-Service, SaaS strategy, whilst also
shaping business operations which support scalable and profitable growth.
Our Full-Service strategy gives our people an exciting opportunity to drive
impact and meaningful contribution to a sector they are passionate about. And
as customers gain access to a broader set of solutions and services through
our new license model, their expectations and demands on Tribal rightly
increase. It is with this in mind that we continue to prioritise investment in
Customer Success, for example, to ensure we are ready to rise to the challenge
and deliver unparalleled expertise as the leaders in our sector.
Our Centre of Excellence (Global Business Services) strategy comes into its
own as we scale, building a solid foundation of core business processes which
have been further improved and extended throughout the first half of the year.
We have diversified and extended the scope of business operations delivered
through GBS and are poised to drive further change in the operating model to
unlock more potential to simplify, standardise and optimise.
In June 2024, we celebrated the one-year anniversary since launching our
Tribal Achievers recognition programme. We have been delighted to witness the
impact it has had on building a culture of recognition into our every day,
with all corners of the business regularly and actively engaging in the
programme. Looking ahead, Achievers gives a powerful vehicle to begin to
exemplify the behaviours and outcomes we plan to cultivate and reward, in
order that our customers get to experience the best of Tribal. We believe we
can use recognition as a powerful tool to reinforce meaningful examples of our
new Full-Service model in action, connecting our people initiatives with
business goals and objectives.
Focus for H2 2024 and Outlook
We achieved our principal aims in H1 2024 of resolving the NTU contract and
refocussing the business following the end of the Offer period. Our principal
focus during the second half of 2024 is on developing Tribal into a pureplay
EdTech SaaS business. To achieve this, we are implementing our new pricing
strategy, which will drive growth in high margin recurring SaaS revenue,
safeguarding our operating profit margins, increasing cash flow generation and
enabling the ongoing reduction in our debt. While universities remain cautious
with regards to spending in the face of uncertainty over international student
numbers, we are working hard to reinvigorate our sales pipeline, with the
pipeline showing signs of improvement in H2.
The Company's strong foundation of recurring revenue and continued focus on
cost control provide the Board with confidence in achieving FY24 results in
line with market expectations.
Mark Pickett
Chief Executive Officer
Financial
review
Results
£m 2024 H1 2023 H1 2023 H1(2) Change constant currency Change constant currency %
Reported
Constant currency
Revenue 44.9 43.4 42.7 2.2 5.2%
Student Information Systems 35.2 33.7 33.2 2.0 6.1%
Etio (formerly Education Services) 9.7 9.7 9.5 0.2 2.2%
Gross Profit 21.8 22.7 22.4 (0.6) (2.5)%
Gross Profit Margin 48.5% 52.4% 52.5% (3.8)% (3.8)pp
Adjusted Operating Margin
(Before Central Overheads) 14.4 15.4 15.2 (0.8) (5.3)%
Student Information Systems 13.5 13.4 13.2 0.3 1.9%
Etio (formerly Education Services) 0.9 2.0 1.9 (1.1) (55.5)%
Central Overheads(3) (6.8) (7.0) (6.9) 0.2 (2.4)%
Net Foreign exchange (losses)/gain (0.2) (0.3) (0.3) 0.1 (30.5)%
Adjusted EBITDA(1) 7.4 8.1 7.9 (0.5) (6.8)%
Adjusted EBITDA(1) Margin 16.4% 18.6% 18.5% (2.1)% (2.1)pp
Statutory Profit Before Tax 1.0 5.9 5.7 (4.7) (83.0)%
Statutory Profit After Tax 1.4 4.7 4.5 (3.1) (68.9)%
Annual Recurring Revenue 54.4 54.5 54.2 0.2 0.4%
1. Adjusted EBITDA and Adjusted EBITDA Margin are in respect
of continuing operations and are calculated by taking the Adjusted EBITDA
after the allocation of Central Overheads and excludes Interest, Tax,
Depreciation and Amortisation and exceptional items of £5.7m (2023: £2.1m),
refer to Note 5.
2. 2023 results updated for constant currency - the Group has
applied 2024 foreign exchange rates to 2023 results to present a constant
currency basis. On a constant currency basis there is a decrease in Revenue of
£0.7m and an decrease to Adjusted EBITDA of £0.2m.
3. Central Overheads are made up of costs that are not
directly attributable to either Student Information Systems or Education
Services.
The Group has chosen to present its results on a constant currency basis to
reflect the year-on-year performance and account for the impact of foreign
exchange movements in the year, given 33.2% (H1 2023: 36.0%) of Tribal's
revenue in the year was generated outside the UK.
The financial review presents the reported results for H1 2024 and H1 2023,
and the H1 2023 results restated to 'constant currency' using 2024 rates to
exclude foreign currency impact. The change percentages and comparatives are
shown on the H1 2023 constant currency numbers. In addition to the metrics of
EBITDA and Adjusted EBITDA, the "constant currency" presentation is an
alternative performance measure and not a statutory reporting measure prepared
in line with International Financial Reporting Standards (IFRS).
Revenue in the six months ended 30 June 2024 was up 5.2% to £44.9m (H1 2023:
£42.7m) consisting of £2.0m growth in SIS and £0.2m growth in Etio.
Student Information Systems revenue increased by 6.1% to £35.2m (H1 2023:
£33.2m).
Foundation revenues grew by 7% to £17.0m (H1 2023: £15.9m) with continued
upsell to existing customers, despite no uplift for changes in Higher
Education student numbers, as published data has been delayed into H2, this
contributed £0.8m revenue in the prior period.
Cloud had significant growth of 26% to £6.2m (H1 2023: £4.9m) as revenue
continued to increase with previously won cloud migration contracts together
with two new cloud migrations won since H1 2023 at University of Exeter and
Institute of Tourism Malta.
Edge revenues declined to £2.4m (H1 2023: £2.8m) due to delayed renewals on
several customers which pushed revenues into H2, together with slower sales
activity in H1 of the current year.
Professional Services revenues were stable at £4.9m (H1 2023: £5.0m).
Other Software and Services revenue saw a modest increase to £4.8m (H1 2023:
£4.6m) as project work and inflationary increases offset continued and
expected churn on School Edge. As at 30 June 2024 we anticipate our contract
with the British Council to end within 12 months' time, and as a result £1.0m
of ARR has been removed.
Etio revenue increased by 2.2% to £9.7m (H1 2023: £9.5m). School Inspections
and Related Services increased to £8.4m (H1 2023: £8.0m) driven by the
'Multiply Random Controlled Trial' (Multiply) contract won in November 2023
and additional scope added into the 'National Centre for Excellence in
Teaching Mathematics' (NCETM) contract, both being contracts with the
Department for Education in the UK. Surveys and Data Analytics revenue
decreased to £1.4m (H1 2023 H1: £1.5m) as expected, due to the seasonality
of the Southern Hemisphere International Student Barometer with most
institutions participating every other year.
Adjusted EBITDA decreased £0.5m to £7.4m (H1 2023: £7.9m) and adjusted
EBITDA margin decreased to 16.4% (H1 2023: 18.5%). However, on an underlying
basis operating margin has been steady, as the H1 2023 operating margin would
have been 16.2% excluding a c£1.0m net positive impact of reversing an
onerous contract provision. This is a strong performance with improvements in
Cloud services margin offsetting the decline in high margin non-core software
revenues, as anticipated.
Student Information Systems Adjusted Operating Margin increased to £13.5m (H1
2023: £13.2m) and margin decreased to 38.3% (H1 2023: 39.9%). The net benefit
in H1 2023 for NTU was £1.3m, excluding this EBITDA improved by £1.6m driven
by increasing cloud and foundation revenues.
Etio Adjusted Operating Margin decreased £1.0m to £0.9m (H1 2023: £1.9m)
and Adjusted Margin decreased to 8.7% (H1 2023: 20.1%). We have seen slower
decision making in the UK and Middle East, and the mix of contracts and
investments made to the target operating model in preparation for future
growth have impacted the margin.
Central Overheads, representing costs in HR, IT, Finance, Marketing,
Management and Board that aren't directly attributable to lines of business
decreased to £6.8m (H1 2023: £6.9m). Central overheads decreased by £0.3m
due to NTU, as all costs were moved to exceptionals in 2024, following formal
mediation. The remaining net increase of £0.1m is driven by increasing
insurance, audit and software costs as expected. The Group continues to focus
on standardisation of processes across the Group to drive efficiency.
Statutory Profit after Tax
The Statutory Profit after tax for the year decreased by £3.1m to £1.4m (H1
2023: £4.5m), due to £3.4m of exceptional costs. Exceptional costs include
£2.8m for the NTU settlement agreement and associated legal fees, and £0.5m
of restructuring costs.
Product Development Costs
The Group invested £5.3m (H1 2023 reported: £6.7m) in product development
activity, of which £2.5m of Edge costs were capitalised (H1 2023: £4.6m).
Edge investment to date, including Dynamics and Semestry, totals £49.6m.
Annual development spend will continue to reduce from the peak in FY22 to
match product development pace with customer needs. The net P&L charge
after removing capitalised spend was £2.8m (H1 2023: £2.0m).
Key performance indicators (KPIs)
£m H1 2024 H1 2023 Reported H1 2023 Constant Currency Change Constant Currency Change Constant Currency %
Revenue 44.9 43.4 42.7 2.2 5.2%
- Student Information Systems 35.2 33.7 33.2 2.0 6.1%
- Etio 9.7 9.7 9.5 0.2 2.2%
Adjusted EBITDA(1) 7.4 8.1 7.9 (0.5) (6.8%)
Adjusted EBITDA Margin(1) 16.4% 18.6% 18.5% (2.1)pp
Annual Recurring Revenue (ARR)vs Dec 2023(2) 54.4 54.5 54.2 0.2 0.4%
Gross Revenue Retention (GRR)(3) 94% 90% 4pp
Net Revenue Retention (NRR) (3) 107% 101% 6pp
Committed Income (Order Book) vs Dec 2023(4) 152.6 168.8 168.1 (15.5) (9.2%)
Operating Cash Conversion(6) 51.4% 12.1% 12.1% 39.3% 39.3pp
Free Cash (Out)/In Flow (1.9) (9.4) (9.4) 7.5 79.6%
Staff Retention 94.2% 92.8% 92.8% 1.4% 1.4pp
Revenue per Operational FTE(5) £54.9k £52.0k £51.2k £9.3k 18.1%
1. Adjusted EBITDA and Adjusted EBITDA Margin are in respect
of continuing operations and are calculated by taking the Adjusted EBITDA
after the allocation of Central Overheads and excludes Interest, Tax,
Depreciation and Amortisation and exceptional items of £5.7m (2023: £2.1m),
refer to Note 5.
2. Annual Recurring Revenue is a forward-looking metric.
Includes exit rate annualised recurring revenue, plus future contracted
recurring revenue yet be delivered, and known losses within the next 12 months
where customers have given notice
3. GRR is calculated as a 12 month rolling percentage of
recurring revenue retained from existing customers at 1 July including
contract expiry, cancellations or downgrades in the year. NRR is calculated as
a 12 month rolling percentage of recurring revenue retained from existing
customers at 1 July including upsells as well as contract expiry,
cancellations or downgrades in the year.
4. Committed Income (Order Book) refers to the Total Contract
Value of booked sales orders which have not yet been delivered (including two
years Support and Maintenance, where it is contracted on an annual recurring
basis).
5. Revenue per Operational FTE is the average FTE for the year
excluding average FTE associated with capitalised Product Development. In H1
2024 72 FTE were capitalised (H1 2023: 116).
6 Operating cash conversion is calculated as net cash from
operating activities before tax, excluding cash outflow of £0.3m (H1 2023:
£nil) from a lapsed offer, and £1.4m (H1 2023: £nil) of restructuring costs
as a proportion of Adjusted EBITDA excluding the onerous contract provision of
£nil (H1 2023: provision release £4.3m)
Annual Recurring Revenue
ARR is a key forward-looking financial metric of the Group and is an area of
strategic focus. Our aim is to grow ARR in our core products through the
delivery of Software-as-a-Service contracts, providing increased quality of
earnings.
ARR relating to our core product offering increased by 2.4% to £52.1m (FY
2023: £50.9m constant currency, £51.1m reported) with module upsells and
inflationary uplifts driving continued growth.
ARR relating to other software and services has decreased 30.4% to £2.3m (FY
2023: £3.3m constant currency, £3.4m reported), due to the expected
completion of the British Council contract in June 2025.
GRR 94% (H1 2023: 90%) has increased 4pp. In the prior period the loss of NTU,
loss of Victoria University and a material decline in DoE contract values
resulted in 5.6pp churn. In the current period there have been no equivalent
size customer churns, the largest of which was £0.3m for one of our larger
School Edge customers, representing 0.6pp.
NRR 107% (H1 2023: 101%) has increased by 6pp given lower churn compared to
the prior period. Upsell to existing customers has been largely consistent
year on year, with slightly higher growth in cloud recurring revenues as
previously won ARR on cloud contracts flows through into the P&L.
Committed Income (Order Book)
The Committed Income (Order Book) relates to the total value of orders across
SIS and ES, which have been signed on or before, but not delivered by 30 June
2024. This represents the best estimate of business expected to be delivered
and recognised in future periods and includes two years of Support &
Maintenance revenue. At 30 June 2024 this decreased to £152.6m (2023:
£168.1m) as long term contracts continue to unwind across both SIS and ES,
including DoE, TAFE New South Wales, British Council, Callista and all ongoing
ES contracts.
Operating cash conversion
Operating cash conversion has increased to 51% (H1 2023: 12%) due to an
improved working capital position. It is calculated as net cash from operating
activities before tax, excluding cash outflows from exceptionals, as a
proportion of Adjusted EBITDA excluding significant one off items. Exceptional
cash outflows include £1.4m (H1 2023: £nil) of restructuring costs and
£0.3m (H1 2023: £nil) associated with the lapsed offer from Ellucian. In H1
2023 there was a significant one off onerous contract provision release of
£4.3m.
Free cash flow
Free cash flow is included as a key indicator of the cash that is generated
(or absorbed) by the Group and is available for acquisition-related
investment, financing costs or distribution to shareholders. It is calculated
as net cash generated, before dividends, interest and finance charges,
deferred consideration, and investments in subsidiaries. Free cash flow in H1
2024 improved to an outflow of £(1.9)m (H1 2023 outflow of £(9.4)m reported)
as net cash used in operating activities before tax increased to £2.0m (H1
2023: £(3.4)m) and investment in capitalised product development decreased to
£2.5m (H1 2023: £4.6m).
Full time equivalent (FTE) and staff retention
Our overall workforce has decreased by 5.3% to a total FTE of 882 at 30 June
2024 from 931 at 30 June 2023.
On an operational FTE basis (excluding Capitalised Product Development), the
revenue per average operational FTE increased to £54.9k (H1 2023: £52.0k).
The reduction in headcount reflects our drive for operational efficiencies and
reduction in Edge product development, whilst growing our Philippines global
business centre. Staff retention has increased to 94.2% (H1 2023: 92.8%).
Exceptionals
The Group has adopted a policy of disclosing separately on the face of its
Group income statement the effect of any components of financial performance
considered by the Directors to be not directly related to the trading business
or significant one-off events, for which separate disclosure would assist in a
better understanding of the financial performance achieved.
A full explanation of 'Exceptional items' is included in Note 6, however the
main items are as follows:
· NTU Settlement and associated costs: Costs of £2.8m relates to
the settlement agreed in May 2024 and associated legal fees (H1 2023: nil).
· Etio restructuring costs: Board's strategic review of Etio and
establishing Etio as a standalone entity, with costs of £0.3m in 2024 (H1
2023: nil).
· Group restructuring and associated costs: £0.2m relates to
restructuring costs as the operating model transitions to an Edtech SaaS
business (H1 2023: £0.3m).
Net (Borrowings) / Cash and Cash Flow
£m H1 2024 H1 2023 Change
Net cash flow from operating activities before tax 2.0 (3.4) 5.4
Tax paid (1.0) (0.8) (0.2)
Purchases of PPE (0.1) (0.2) 0.1
Net lease payments (0.4) (0.4) (0.1)
Capitalised product development (2.5) (4.6) 2.1
Proceeds from shares 0.1 0.0 0.1
Free cash flow (1.9) (9.4) 7.5
Net cash inflow / (outflow) from other financing activities (2.6) 7.7 (10.3)
Net decrease in cash & cash equivalents (4.5) (1.7) (2.8)
Cash & cash equivalents at beginning of the year 6.8 2.9 3.9
Less: Effect of foreign exchange rate changes (0.3) (0.0) (0.3)
Net cash & cash equivalents at end of period 2.0 1.1 0.8
Borrowings (12.0) (14.0) 2.0
Net (debt)/cash & cash equivalents end of period (10.0) (12.9) 2.8
Net debt and cash equivalents at 30 June 2024 were (£10.0)m (H1 2023:
(£12.9)m).
Operating cash inflow before tax for the period was £2.0m (H1 2023:
£(3.4)m), £5.4m higher than last year despite £1.7m (H1 2023: £0.4m) cash
outflow from exceptional costs mainly from restructuring activities.
Spend on product development decreased to £2.5m (H1 2023: £4.6m) in line
with the Group's product investment programme.
Cash inflow from other financing activities (per table above) decreased to
£(2.6)m (2022: £7.7m), due to £2m repayment of the net loan facility and
bank loan arrangement fees and interest £0.6m (H1 2023: £0.2m).
Funding arrangements
On 29 December 2023 the Group entered a three-year £20m multicurrency
revolving facility with a further £5m accordion with HSBC, with the option to
extend by a further two years. The facility was put in place to cover general
corporate and working capital requirements of the Group and as at 30 June 2024
£12.0m (H1 2023: 14.0m) of the loan was utilised. The Group had a £5m
committed overdraft facility in the UK until 31 July 2024, where this reduced
to £2m and is due to end at the end of August 2025. It also has an AUD $2m
committed overdraft facility in Australia (until October 2024). As at 30
June 2024 £2.9m of the GBP facility was utilised.
Shareholders returns and dividends
In line with the 2023 year end announcements, given the finalisation of the
NTU settlement and solid cashflow performance in FY24, the Board intends to
pay an interim dividend to shareholders of 0.65p on 28 November 2024 to
shareholders on the register at the close of business on 31 October 2024. The
ex-dividend date will be 30 October 2024.
Share options and share capital
On 13 June 2024, 1,766,193 nil-cost share options were granted to Mark Pickett
(1,109,005) and Diane McIntyre (657,188) as part of their ongoing
remuneration.
On 5 June 2024, 552,291 nil-cost share options were granted to eligible
employees under the terms of its 2018 Long-Term Incentive plan.
Diane McIntyre
Chief Financial Officer
Condensed consolidated income statement
For the six months to 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Note 2024 2023 2023
£'000 £'000 £'000
Revenue 4 44,942 43,377 85,750
Cost of sales (23,149) (20,727) (43,628)
Gross profit 21,793 22,650 42,122
Total administrative expenses (20,143) (16,704) (34,861)
Operating profit 4 1,650 5,946 7,261
Analysed as:
Operating profit (before exceptional items) 5,059 6,312 10,581
Exceptional items 6 (3,409) (366) (3,320)
Operating profit (EBIT) 1,650 5,946 7,261
Finance income 1 143 308
Finance costs 7 (628) (204) (939)
Profit before tax 1,023 5,885 6,630
Tax credit/(charge) 8 329 (1,164) (1,336)
Profit attributable to the owners of the parent 1,352 4,721 5,294
Earnings per share
Basic 9 0.6p 2.2p 2.5p
Diluted 9 0.6p 2.2p 2.4p
All activities are from continuing operations
Condensed consolidated statement of comprehensive income and expense
For the six months to 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Profit for the period 1,352 4,721 5,294
Other comprehensive expense
Items that will not be reclassified subsequently to profit or loss:
Re-measurement of defined benefit pension schemes - - (129)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (61) (168) (458)
Other comprehensive expense for the period net of tax (61) (168) (587)
Total comprehensive income for the period attributable to equity holders of 1,291 4,553 4,707
the parent
Condensed consolidated balance sheet
As at 30 June 2024
30 June 30 June 31 December
2024 2023 2023
Note £'000 £'000 £'000
Non-current assets
Goodwill 10 28,354 28,719 28,524
Other intangible assets 11 50,787 47,256 49,894
Property, plant and equipment 655 936 836
Right of use assets 1,998 1,033 2,117
Net investment in lease - 46 21
Deferred tax assets 7,306 5,127 4,960
Retirement benefit scheme assets 81 72 81
89,181 83,189 86,433
Current assets
Trade and other receivables 12 13,369 16,271 13,690
Net investment in lease - 47 49
Contract assets 4,408 6,423 5,918
Current tax assets 212 173 752
Cash and cash equivalents 17 4,853 1,639 6,797
22,842 24,553 27,206
Total assets 112,023 107,742 113,639
Current liabilities
Trade and other payables 13 (7,660) (5,394) (5,902)
Contract liabilities (21,343) (22,790) (27,732)
Accruals (9,524) (9,051) (9,194)
Current tax liabilities (1,741) (1,273) (1,541)
Lease liabilities (685) (584) (713)
Borrowings 17 (2,888) (519) -
Provisions 14 (475) (875) (1,205)
(44,316) (40,486) (46,287)
Net current liabilities (21,474) (15,933) (19,081)
Non-current liabilities
Contract liabilities (165) (17) -
Lease liabilities (1,208) (497) (1,320)
Other payables 13 (975) (168) (212)
Deferred tax liabilities (2,940) (2,766) (2,740)
Borrowings 17 (12,000) (14,000) (14,000)
Provisions 14 (431) (249) (605)
(17,719) (17,697) (18,877)
Total liabilities (62,035) (58,183) (65,164)
Net assets 49,988 49,559 48,475
Equity
Share capital 15 10,679 10,611 10,611
Share premium 83 83 83
Other reserves 29,047 28,786 28,893
Accumulated profits 10,179 10,079 8,888
Total equity attributable to equity holders of the parent 49,988 49,559 48,475
Condensed consolidated cash flow statement
for the six months to 30 June 2024
Six months ended 30 June Six months ended 30 June Year ended 31 December
2024 2023 2023
£'000 £'000 £'000
Note
Net cash from/(used in) operations 16 1,025 (4,192) 8,308
Investing activities
Purchases of property, plant and equipment (87) (191) (390)
Expenditure on intangible assets 11 (2,517) (4,635) (8,479)
Payment of deferred contingent consideration for acquisitions - (46) (71)
Proceeds from sub-leases 17 25 50
Net gain on forward contracts - 142 175
Net cash outflow from investing activities (2,587) (4,705) (8,715)
Financing activities
Interest paid (612) (166) (717)
Loan arrangement fees 34 (2) (112)
Loan drawdown 17 5,000 7,750 8,750
Loan repayment 17 (7,000) - (1,000)
Gross proceeds on issue of shares 15 68 - -
Equity dividend paid - - (1,377)
Principal paid on lease liabilities (420) (377) (911)
Interest paid on lease liabilities (38) (21) (77)
Net cash (used in)/from financing activities (2,968) 7,184 4,556
Net (decrease)/increase in cash and cash equivalents (4,530) (1,713) 4,149
Net cash and cash equivalents at beginning of period 6,797 2,856 2,856
Effect of foreign exchange rate changes (302) (23) (208)
Net cash and cash equivalents at end of period 17 1,965 1,120 6,797
Condensed consolidated statement of changes in equity
For the six months to 30 June 2024
Share Capital Share Premium Other reserves Accumulated profits Total Equity
£'000 £'000 £'000 £'000 £'000
Balance at 31 December 2022 10,611 83 28,598 5,526 44,818
Profit for the period - - - 4,721 4,721
Other comprehensive expense for the period - - - (168) (168)
Total comprehensive income for the period - - - 4,553 4,553
Credit to equity for share-based payments - - 188 - 188
Contributions by and distributions to owners - - 188 - 188
Balance at 30 June 2023 10,611 83 28,786 10,079 49,559
Profit for the period - - - 573 573
Other comprehensive expense for the period - - - (419) (419)
Total comprehensive income for the period - - - 154 154
Equity dividend paid - - - (1,377) (1,377)
Credit to equity for share-based payments - - 107 - 107
Tax credit on credit to equity for share-based payments - - - 32 32
Contributions by and distributions to owners - - 107 (1,345) (1,238)
Balance at 31 December 2023 10,611 83 28,893 8,888 48,475
Profit for the period - - - 1,352 1,352
Other comprehensive expense for the period - - - (61) (61)
Total comprehensive income for the period - - - 1,291 1,291
Issue of equity share capital 68 - - - 68
Credit to equity for share-based payments - - 154 - 154
Contributions by and distributions to owners 68 - 154 - 222
Balance at 30 June 2024 10,679 83 29,047 10,179 49,988
Notes to the condensed consolidated financial information
for the six months to 30 June 2024
1. General information
The condensed consolidated financial information for the six months ended 30
June 2024 was approved by the Board of Directors on 20 August 2024. This
condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006.
Statutory accounts for the year ended 31 December 2023 were approved by the
Board of Directors on 20 March 2024. A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies. The auditor
reported on those accounts: its report was unqualified, and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
2. Accounting policies
The condensed consolidated set of financial statements included in this
half-yearly financial report has been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Services Authority.
The condensed consolidated financial information should be read in conjunction
with the annual financial statements for the year ended 31 December 2023 which
have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006.
In preparing these condensed interim financial statements, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were as stated within the
consolidated financial statements for the year ended 31 December 2023.
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 December 2023.
3. Going concern
Tribal had net cash and cash equivalents of £2.0m at the end of H1 2024, and
borrowings of £12.0m. The Group has access to a £5.0m committed overdraft
facility in the UK and a $AUD 2.0m committed overdraft facility in Australia.
As at June 2024 there was $2.0m available but undrawn in respect of the AUS
overdraft facility and £2.1m available with £2.9m drawn down in respect of
the UK overdraft facility. Tribal Group plc has undertaken to make adequate
financial resources available to the Group to meet its current and future
obligations as and when they fall due.
Tribal's main business is software related through the provision of Student
Information Systems (SIS) to education institutions globally. Revenue is
generated from the sale of software licenses and related implementation work,
and the ongoing provision of support & maintenance and cloud/hosting
services. The Group benefits from strong annual recurring revenues and cash
generation, it also has a significant pipeline of committed income for the
remainder of 2024 and into 2025 which provides a good level of protection and
certainty to the business. The Group's net current liability position has
decreased to £21.5m from £19.1m, this being driven by the NTU settlement
creditor.
The Group had a positive start to the year, closing several significant sales
to new and existing customers, and expanding its global footprint. The
investments the Group continue to make position Tribal at the forefront of
this evolution in the industry. The start of the year has been cash generative
and although management anticipates an improved cash position by year end, a
net debt position is still expected. Management is monitoring costs closely
and would also introduce cost saving measures to mitigate the impact on profit
and cash if necessary.
The Company has guaranteed the year-end liabilities of its subsidiaries.
In assessing the Group's going concern position the Directors have considered
all relevant facts, latest forecasts, an assessment of the risks faced by the
Group, and considered potential changes in trading performance. In addition,
management have sufficiently stress tested the latest forecasts to the point
where either the Group cannot meet its liabilities or is in breach of banking
covenants and have concluded that this position is highly unlikely, and
therefore does not have a significant impact on the Group's ability to
continue as a going concern. Accordingly, the Directors have a reasonable
expectation that the Group and the Company have adequate resources to continue
in operational existence for at least 12 months from the date of approval of
the financial statements and the foreseeable future. Thus, they continue to
adopt the going concern basis in preparing the financial statements.
4. Segmental analysis
Information reported to the Chief Executive Officer for the purposes of
resource allocation and assessment of segment performance is focused on the
nature of each type of activity. The Group's reportable segments and principal
activities under IFRS 8 are detailed below:
· Student Information ("SIS") represents the delivery of software and
subsequent maintenance and support services and the activities through which
we deploy and configure our software for our customers, including software
solutions, asset management and information managed services; and
· Etio (formerly Education Services) ("Etio") represents inspection
and review services which support the assessment of educational delivery, and
a portfolio of performance improvement tools and services, including
analytics.
In accordance with IFRS 8 'Operating Segments' information on segment assets
is not shown as this is not provided to the Chief Operating decision-maker.
Inter-segment sales are charged at prevailing market prices.
Total Revenue Adjusted segment operating profit
Six months Six months Year Six months Six months Year
ended ended ended ended ended ended
30 June 30 June 31 December 30 June 30 June 31 December
2024 2023 2023 2024 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000
SIS 35,208 33,707 68,578 12,210 12,369 23,412
Etio 9,734 9,670 17,172 768 1,923 2,254
Total 44,942 43,377 85,750 12,978 14,292 25,666
Unallocated corporate expenses (7,236) (7,618) (14,360)
Amortisation of acquired software and customer contracts & relationships
(683) (362) (725)
Adjusted operating profit 5,059 6,312 10,581
Exceptional items (3,409) (366) (3,320)
Operating profit 1,650 5,946 7,261
Depreciation and amortisation is allocated to segment profits and is included
in adjusted segment operating profit as above. The amount included in SIS is
£1.3m (30 June 2023: £1.0m; 31 December 2023 £2.3m) and within Etio £0.1m
(30 June 2023: £0.1m; 31 December 2023: £0.2m). The accounting policies of
the reportable segments are the same as the Group's accounting policies.
Segment profit represents the profit earned by each segment, without the
allocation of central administration costs, including Directors' salaries,
finance costs and income tax expense. This is the measure reported to the
Group's Chief Executive for the purpose of resource allocation and assessment
of segment performance.
Within Etio revenues of approximately 9% (31 December 2023: 2%) have arisen
from the Segment's largest customer: within SIS revenues of approximately 4%
(31 December 2023: 4%) have arisen from the Segment's largest customer. These
percentages are calculated against total revenue.
Geographical information:
Revenue from external customers, based on location of the customer, are shown
below:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
UK 30,040 27,762 57,685
Australia 7,650 7,762 15,592
Other Asia Pacific 2,479 2,509 4,901
North America 2,259 2,238 3,650
Rest of the world 2,514 3,106 3,922
44,942 43,377 85,750
5. Alternative Performance Measures (APM)
A number of non-IFRS adjusted profit measures are used in this Annual Report
and financial statements. Exceptional items are excluded from our headline
performance measures by virtue of their size and nature, in order to reflect
management's view of the underlying performance of the Group.
Summarised below is a reconciliation between statutory results to adjusted
results. The Group believes that alternative performance measures such as
adjusted EBITDA are commonly reported by companies in the markets in which it
competes and are widely used by investors in comparing performance on a
consistent basis without regard to factors such as depreciation and
amortisation, which can vary significantly depending upon accounting methods
(particularly when acquisitions have occurred), or based on factors which do
not reflect the underlying performance of the business. The adjusted profit
after tax earnings measure is also used for the purpose of calculating
adjusted earnings per share.
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Statutory operating profit 1,650 5,946 7,261
Amortisation of Development cost and acquired Intellectual Property 927 656 1,485
Amortisation of other intangibles 4 3 7
Depreciation on Property, Plant & Equipment 233 283 566
Depreciation of right of use assets 445 460 1,004
Amortisation of software and customer contracts & relationships 683 362 725
Exceptional costs 3,409 366 3,320
Adjusted Operating Profit (EBITDA) 7,351 8,076 14,368
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Adjusted EBITDA 7,351 8,076 14,368
Exceptional items (3,409) (366) (3,320)
EBITDA before exceptional items 3,942 7,710 11,048
Depreciation & amortisation (2,292) (1,764) (3,787)
Operating profit (EBIT) 1,650 5,946 7,261
Net financing costs (627) (61) (631)
Profit before tax 1,023 5,885 6,630
6. Exceptional items
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Acquisition related costs - (74) 103
Takeover costs (88) - (1,420)
Education Services restructure (274) - (1,003)
NTU Settlement and associated costs (2,844) - -
Group restructuring and associated costs (203) (292) (1,000)
Total exceptional items (3,409) (366) (3,320)
Exceptional items are not part of the Group's underlying trading activities
and include the following:
Acquisition related costs: Amounts relating to the consultancy and legal costs
of potential acquisitions in the period total £nil. (30 June 2023: charge of
£74,000; 31 December 2023: credit of £103,000). The credit in 2023 arose
from the remeasurement of accounting for changes in the fair value of the
contingent deferred consideration as part of the earn-out agreement with Eveoh
BV, and the corresponding gain has been recognised in the income statement.
Restructuring and associated costs relate to the restructuring of the Group's
operations, including properties and the Education Services Restructure
£477,000. (30 June 2023: £292,000; 31 December 2023: £2,003,000). These
costs relate to one-off initiatives that support the Group's transition to a
Pureplay EdTech, SaaS business.
Takeover costs: Amounts relating to the lapsed offer for Tribal Group plc by
Ellucian. Costs of £88,000 (31 December 2023: £1,420,000) were spent on due
diligence and external advisors.
NTU Settlement and associated costs relates to the mediation costs with
Nanyang Technological University ("NTU") and the settlement agreed which
resolves all outstanding issues in relation to the contract between Tribal and
NTU which was terminated on 17 March 2023.
7. Finance costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Interest on bank overdrafts and loans 613 165 717
Loan arrangement fees (34) 2 112
Interest expense on lease liabilities and dilapidation provisions 49 36 78
Unwinding of - 1 32
discounts
Total finance costs 628 204 939
8. Tax
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Current tax
UK Corporation tax - - (117)
Overseas tax 1,828 1,382 1,999
Adjustments in respect of prior periods - - (493)
1,828 1,382 1,389
Deferred tax
Current period (1,370) (226) 502
Adjustments in respect of prior periods (787) 8 (555)
(2,157) (218) (53)
Tax (credit)/charge (329) 1,164 1,336
The Group continues to hold appropriate Group provisions.
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to expected total annual earnings.
9. Earnings per share
Earnings per share and diluted earnings per share are calculated by reference
to a weighted average of ordinary shares calculated as follows:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
thousands thousands thousands
Basic weighted average number of shares in issue 213,507 213,713 214,180
Dilutive weighted average number of employee share options 2,067 3,117 1,626
Total weighted average number of shares outstanding for dilution calculations 215,574 216,830 215,806
Diluted earnings per share only reflects the dilutive effect of share options
for which performance criteria have been met.
The maximum number of potentially dilutive shares, based on options that have
been granted but have not yet met vesting criteria, is 2,067,428 (31 December
2023: 3,300,128). This includes nil options in the 2019 SAYE Scheme (31
December 2023: 17,937).
The "adjusted" basic and diluted earnings per share figures are included as
the directors believe that they provide a better understanding of the
underlying trading performance of the Group.
A reconciliation of how these figures are calculated is set out below:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Net profit 1,352 4,721 5,294
Earnings per share
Basic 0.6p 2.2p 2.5p
Diluted 0.6p 2.2p 2.4p
Net profit (before exceptional items)* 3,975 5,041 8,811
Adjusted earnings per share
Basic 1.9p 2.3p 4.1p
Diluted 1.8p 2.3p 4.1p
*Net profit (before exceptional items) is calculated as below:
Operating profit (before exceptional items) 5,059 6,312 10,581
Finance income 1 143 308
Finance costs (628) (204) (939)
Operating profit (before exceptional items) before tax 4,432 6,251 9,950
Tax charge (before exceptional items) (457) (1,210) (1,139)
Net profit (before exceptional items) 3,975 5,041 8,811
10. Goodwill
£'000
Cost
At 1 January 2024 109,755
Exchange differences (170)
At 30 June 2024 109,585
Accumulated impairment losses
At 1 January 2024 81,231
At 30 June 2024 81,231
Net book value
At 30 June 2024 28,354
At 31 December 2023 28,524
The Group tests annually for impairment, or more frequently if there are
indicators that goodwill could be impaired. At the half year, a review has
been undertaken to ascertain if any indicators have arisen of potential
impairments. Based on the review performed, no impairment indicators that
would require an impairment review have been noted.
11. Other intangible assets
Acquired Software Acquired Customer Development Business Software Total
£'000 contracts and costs systems licences £'000
relationships Acquired intellectual property £'000 £'000 £'000
£'000 £'000
Cost
At 1 January 2024 12,199 9,739 1,873 63,623 75 44 87,553
Additions - - - 2,517 - - 2,517
Exchange differences (98) (42) - (44) - - (184)
At 30 June 2024 12,101 9,697 1,873 66,096 75 44 89,886
Amortisation
At 1 January 2024 9,167 7,518 1,047 19,876 7 44 37,659
Charge for the period 133 550 49 878 4 - 1,614
Exchange differences (98) (32) - (44) - - (174)
At 30 June 2024 9,202 8,036 1,096 20,710 11 44 39,099
Carrying amount
At 30 June 2024 2,899 1,661 777 45,386 64 - 50,787
At 31 December 2023 3,032 2,221 826 43,747 68 - 49,894
Software and customer contract and relationships have arisen from
acquisitions, and are amortised over their estimated useful lives, which are 3
to 8 years and 3 to 15 years respectively. The amortisation period for
development costs incurred on the Group's product development is 3 to 15
years, based on the expected life-cycle of the product. Amortisation and
impairment of development costs, amortisation for software, customer contracts
and relationships, intellectual property, business systems and software
licences are all included within administrative expenses.
12. Trade and other receivables
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Amounts receivable for the sale of services 8,490 10,467 8,834
Less: loss allowance (493) (203) (665)
7,997 10,264 8,169
Other receivables 976 1,165 689
Prepayments 4,396 4,842 4,832
13,369 16,271
13,690
13. Trade and other payables
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Current 1,662 2,003 1,283
Trade payables
Other taxation and social security 3,848 2,646 3,664
Other payables 2,150 745 955
7,660 5,394 5,902
Non-current
Other payables 975 168 212
Total 8,635 5,562 6,115
14. Provisions
Property
related Restructuring Other Total
£'000 £'000 £'000 £'000
At 1 January 2024 850 779 181 1,810
Net movement in provision 12 - 23 35
Utilisation of provision (153) (773) - (926)
Exchange rate movement (3) - (10) (13)
At 30 June 2024 706 6 194 906
The provisions are split as follows:
Within one year 275 6 194 475
More than one year 431 - - 431
Total 706 6 194 906
Provisions are recognised when the Group has a present obligation as a result
of a past event, and it is probable that the Group will be required to settle
the obligation. Provisions are measured at the Directors' best estimate of the
expenditure required to settle the obligation at the balance sheet date, and
are discounted to present value where the effect is material.
Property related provision relates to the estimated future dilapidation costs
arising from exiting leasehold properties, under IAS 37. This provision is
discounted by property and is between 2.65% and 6.25%.
Other provision relates to the recoverability of input VAT in the Philippines.
This provision is not discounted.
Restructuring provision represents amounts provided in respect of the Group's
restructuring and reorganisation and principally reflects redundancy costs.
15. Share capital
Six months Six months Six months Six months Year
ended ended ended ended ended Year ended
30 June 30 June 30 June 30 June 31 December 2023 31 December
2024 2024 2023 2023 number 2023
number £'000 number £'000 £'000
Allotted, called up and fully paid
At beginning of the period 212,221,746 10,611 212,221,746 212,221,746 212,221,746 212,221,746
Issued during the period 1,357,429 68 - - - -
At end of the period 213,579,175 10,679 212,221,746 212,221,746 212,221,746 212,221,746
The Company has one class of ordinary shares of 5p which carry no right to
fixed income. 1,357,429 shares were issued during the period in order to
satisfy exercises of share-based payment schemes. The exercise costs of 53p
and 57p per share for the LTIPs resulted in cash receipts of £nil.
16. Notes to the cash flow statement
Six months
ended Six months Year
30 June ended ended
2024 30 June 31 December
£'000 2023 2023
£'000 £'000
Operating profit from continuing operations 1,650 5,946 7,261
Depreciation of property, plant and equipment 233 283 566
Depreciation of right of use assets 445 460 1,004
Amortisation and impairment of other intangible assets 1,614 1,021 2,217
Share-based payments 163 213 331
Research and development tax credit (50) (97) (141)
Movement in contingent deferred consideration - - (115)
Net pension credit - - (9)
Other non-cash items (63) (44) (470)
Operating cash flows before movements in working capital 3,992 7,782 10,644
Decrease/(increase) in receivables 1,787 (3,436) (423)
(Decrease) in payables (3,736) (7,698) (853)
Net cash from/(used in) operating activities before tax 2,043 (3,352) 9,368
Net tax paid (1,018) (840) (1,060)
Net cash from/(used in) operating activities 1,025 (4,192) 8,308
Net cash from/(used in) operating activities before tax can be analysed as
follows:
Continuing operations 2,043 (3,352) 9,368
17. Analysis of net debt
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Cash 4,853 1,639 6,797
Overdrafts (2,888) (519) -
Borrowings (12,000) (14,000) (14,000)
(10,035) (12,880) (7,203)
Net debt
Reconciliation of changes in net debt
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Opening net debt (7,203) (3,394) (3,394)
Movement in borrowings 2,000 (7,750) (7,750)
Net (decrease)/increase in cash and cash equivalents (4,530) (1,713) 4,149
Non-cash effect of foreign exchange rate changes (302) (23) (208)
Closing net debt (10,035) (12,880) (7,203)
18. Contingent liabilities
The Company and its subsidiaries have provided performance guarantees issued
by their banks on their behalf, in the ordinary course of business totalling
£0.1m (30 June 2023: £1.3m, 31 December 2023: £0.1m). These are not
expected to result in any material financial loss and the likelihood of using
these guarantees is assessed as remote.
19. Related party disclosures
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
The remuneration of the key management personnel of the Group is set out below
in aggregate for each of the categories specified in IAS 24 'Related Party
Disclosures'. The members of the Group Board and the Group's Executive Board
are considered to be the key management personnel of the Group.
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Salaries and short-term employee benefits 1,413 1,327 2,765
Share-based payments 121 186 327
1,534 1,513 3,092
20. Seasonality
There is limited annual seasonality within the Group. Our SIS customers are on
an annual billing cycle with implementation projects being invoiced based on
milestones being met. There is some seasonality within the ES business as
Surveys revenue is reduced as institutions only participate in the Southern
Hemisphere International Student Barometer every other year.
Responsibility statement
The Directors confirm that these condensed interim financial statements have
been prepared in accordance with the Disclosure and Transparency Rules (DTR)
of the Financial Services Authority and that the interim management report
includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
• An indication of important events that have occurred during the first six
months and their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
• Material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report
The Directors of Tribal Group plc are listed in the Tribal Group plc Report
and accounts for the 12 month period ended 31 December 2023. A list of
current Directors is maintained on the Tribal Group plc website:
www.tribalgroup.com (http://www.vernalis.com) .
The Directors are responsible for the maintenance and the integrity of the
Group's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
By order of the Board
Mark
Pickett
Chief
Executive
20 August 2024
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