Tribal Group finishes the first four months of the year a very different beast to how it started out on 1st January. The troubled Group (see Tribal FY10 slumps) has completed two disposals over the period – its health and government business ended up in the hands of Capita (see Capita to buy Tribal’s health & government business) and its last support services business, Tribal Resourcing, ended up in the hands of TMP (UK) Ltd). Tribal is now left with a focus purely on the education, learning and training markets.
So far so good it seems. According to its trading update, for the first four months of the year, revenue (we assume from continuing operations) was up 5% and the Group has delivered or secured 78% of planned revenue for the year (compared to 81% at the same time in 2010). There also appear to have been some good wins, particularly internationally, with new clients in New Zealand, China & Turkey.
However, we don’t think Tribal will be breathing a sigh of relief quite yet. There are still elements of the business that are struggling. Despite technology revenues being “resilient” (i.e. just about holding up!), the Group cites low demand for its school advisory services. And things are unlikely to improve quickly considering the continued uncertainty surrounding UK education policy.
In the meantime, Tribal continues with its cost reduction programme with benefits expected in H2 and will be hoping that it can do enough to attract a decent price from a potential suitor. The Group remains in an offer period (announced in December 2010) and will make further announcements should the offer come to anything.