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Tribal Group’s first half results to 30th June 2013 show a steady growth in its home UK market and encouraging growth in its chosen international markets. The company reported increases in adjusted revenue (up 12% to £62.1m) and adjusted operating profit (up 15% to £4.7m). Total revenue, including discontinued operations revenue of £1.6m in 2012, was up 9%. Growth was boosted by the acquisition of i-graduate in January 2013. In addition strong cash flow enabled Tribal to invest in international sales and business development capacity as well as spending £3.5m on new software products (up from £3m in 2012).
The Systems division (up 24% to £30.6m) continues to show stronger growth than the Solutions division (up only 1% to £31.7m). Systems covers the deployment of the company’s flagship student management system which has proved a big hit with many higher education institutions in the UK (such as Staffordshire University, University of Kent and University of Oxford) and abroad (including the University of Sydney, Royal Melbourne Institute of Technology and University of Queensland). Significantly Tribal has just one its first Systems deal in North America at the University of British Columbia.
On the other hand the Solutions division growth was pretty much flat (up only 1% to £31.7m). Services in the Solutions division includes Benchmarking and Analytics services which were strengthened with the acquisition of i-graduate in January 2013, Review and Evaluation (Ofsted being the main customer of this), Professional Development and Training Support, and Learning and Assessment.
Maintaining steady growth in a challenging UK market is impressive, as is the company’s continued investment and success internationally. Strong relationships with leading customers, including universities will strengthen the company’s credibility here and abroad. That said, our question about whether Tribal should re-organise by vertical industries as a go-to-market model and ditch the ‘Systems’ and ‘Solutions’ approach remains (see Tribal Group: technology key to services growth).
