3

Highlights

Revenue growth of 9% to £113.3m (2007: £103.8m)

Adjusted operating profit up 10% to £9.5m (2007: £8.6m)

Adjusted profit before tax up 38% to £9.1m (2007: £6.6m)

Adjusted diluted EPS up 37% to 7.4p (2007: 5.4p)

Interim dividend of 1.7p

Acquisition of 72% of HELM Corporation completed for £15.1m

Net debt £7.3m

4

Financial review

Simon Lawton

Group Finance Director

Financial performance

Revenue (£m)

102 104 113

194 209

2006 2007 2008

Profit before tax (£m)†

8.46.6

9.1

13.0

15.4

2006 2007 2008

Earnings per share (pence)†

6.45.4

7.4

10.412.2

2006 2007 2008

Note: Historic figures stated for continuing operations only

Full year Interim

† Before amortisation of intangibles, goodwill impairment and financial instrument costs

5

6

Income statement

Revenue increase of 9%

Share-based payments now taken above the line

Operating profit* up 10% to £9.5m

Improved operating margin to 8.4%

Significant fall in interest and bank fees

Effective tax rate of 27.5%

Interim dividend 1.7p

Six months to 30 June 2008

£m

2007

£m

Growth

%

Continuing Operations

Turnover 143.6 127.1 +13%

Revenue 113.3 103.8 +9%

Operating profit* 9.5 8.6 +10%

Operating margin 8.4% 8.3%

Interest (0.4) (2.0)

Profit before tax* 9.1 6.6 +38%

Tax (2.5) (1.6)

Profit after tax* 6.6 5.0 +32%

Adjusted fully diluted EPS* (p) 7.4p 5.4p +37%

No of WA diluted shares (‘000) 84,988 84,756

* Before amortisation of intangibles, goodwill impairment and financial instrument costs

7

Committed revenue growth

£86m

£100m£108m

£124m£133m

2004 2005 2006 2007 2008December June

8

Committed revenue

% of Total

£133m

£22m

£27m

£84m

2010 and beyond

£15m

2009

£50m

2008

£68m

17%Support services

20%Consulting

63%Education £30m £39m £15m

£5m£22m

£16m £6m

At 1 July 2008

9

Current pipeline

Support services

Consulting

Education£131m

£15m

£22m

£16m £6m

At 1 July 2008

£104m

£20m

£12m

£94m

£52m

Jun 08 Dec 07

Total £245m £168m

10

Balance sheet

June2008

£m

December2007

£m

Intangible assets 209.8 191.2

Other non-current assets 10.9 9.1

Net debt (7.3) (6.8)

Dividend payable (1.5) -

Net working capital (21.9) (12.3)

Net assets 190.0 181.2

Share capital 82.4 79.0

Profit and loss reserves 40.8 36.6

Minority interest 1.7 1.1

Other reserves 65.1 64.5

Total equity and reserves 190.0 181.2

Intangible assets increased by £18.6m due to acquisitions

Strong working capital management

Low debt includes benefit from increase in restricted cash of £3.8m

Gearing of 3.9% (June 2007: 4.8%)

11

Group cash flow

Six months ended 30 June 2008

£m

2007

£m

Operating cash flow

- continuing operations 19.6 15.5

- increase in restricted cash 3.8 1.8

- discontinued operations - 2.5

23.4 19.8

Interest (0.4) (1.4)

Tax (2.4) (0.9)

Net cash flow before investing & financing 20.6 17.5

Capital expenditure (2.0) (4.0)

Acquisitions (18.0) (0.3)

Dividends paid (1.2) (1.0)

Disposal of Mercury Health - 34.8

Increase / (repayment) of loans 6.8 (53.4)

Net change in cash 6.2 (6.4)

Operating profit to cash flow conversion (excluding increase in restricted cash) of 207% (2007: 180%)

Capital expenditure of £2.0m (2007: £4.0m) includes product development costs of £0.8m (2007: £1.0m)

Acquisition of HELM, minority interests and two small bolt-ons aggregate to £18.0m

12

Group net debt

£40m bank facility until June 2012 with HBoS and HSBC

June

2008

£m

December2007

£m

Group net debt 14.3 10.0

less restricted cash (7.0) (3.2)

Group debt 7.3 6.8

Bank revolver facilities 40.0 40.0

Bank headroom 32.7 33.2

Actual Covenant

Interest cover x42.6 >x3.0

Debt to EBITA x0.4 <x3.5 Protected against future interest rate

movements by interest rate swap through to 2010 at 4.99%

13

Operational review

Peter Martin

Chief Executive

14

Analysis

Six months to June 2008

Revenue

Consulting33%

Support services

23%

Education44%

* Before central costs

15

Education



Revenue £000 50,527 45,523

Operating profit £000 7,483 7,961

Operating margin (%) 14.8% 17.5%

Financial summary

Revenue increased by 11%

Operating profit fell 6%

Margin impacted by: - high software sales recorded in Q1 2007 - planned revenue investment in 2008

Activities

Learning & Publishing. Programme delivery, learning materials, offender learning, skills training and delivery

Software. Student administration systems, asset management software, information management

Services. Schools inspections, benchmarking, consulting, school improvement, academies and BSF

Business review

Broadening our software offering

Excellent range of contract wins:- school improvement- employability- science, technology, engineering and mathematics- apprenticeships

Strong performance in schools inspections

Outlook

85% of 2008 revenue secured

Major contract opportunities- schools inspections- offender learning- Welfare to Work- BSF

Increasing pipeline of international opportunities

16

Financial summary


Operating profit increased by 27%

Operating margin improved to 8.9%

Activities

Management consulting- Health- Housing, regeneration and local government (“HRLG”)- Central government- Tribal HELM

Business review

Good performance across all practices

Expanded HRLG practice- acquisition of master planner- integration of local government practice- acquisition of local government consultancy

Development of health commissioning

Acquisition of HELM Corporation

Outlook


Good levels of demand

Expansion of frameworks

Focus on margins

International opportunities

Consulting



Revenue £000 37,467 35,247



17

Financial summary


Operating profit up by 35%

Operating margin improved to 7.4%

Activities

Architectural design: health, education and science

Communications & PR

Resourcing

Business review

Strong demand in architecture- appointed to major scheme in Swansea - shortlisted on several significant opportunities

Good progress in communications

Resourcing - ahead of plan - good level of new business wins - markets remain challenging


Excellent order book and pipeline for architecture

Expanding range of clients in communications

Resourcing to perform in line with expectations

Support services

Outlook



Revenue £000 26,182 24,977



18

Acquisitions

Business Activity Rationale Enterprise Value

EBITA

HELM Financial and management consultancy in the UK and overseas

Complementary servicesInternational footprint

£21.0m £3.4m

Urban Studio Master planning and urban design

Strategic gap in portfolio £1.1m £0.2m

RSe Local government consulting

Greater critical mass Broadens service line and client base

£1.0m £0.2m

19

Management

Senior appointments made: Andy Field Chief Operating Officer Stephen Harris International Development Director Matthew Swindells Managing Director, Health

Seeking Non-Executive Director appointments

20

Prospects

Peter Martin Chief Executive

21

Markets

Business model proving resilient Tighter budgetary controls in the public sector but:

Government priorities remain (particularly in health and education) Continued flow of significant contract opportunities:

OFSTED inspections Healthcare commissioning Offender learning Welfare to Work Health facilities

Reform agenda continues: Performance improvement Efficiency and quality Value for money

22

Group strategy

Focus on core public sector markets: Education Health Housing & Regeneration Local government Central government

Services span consulting, support and delivery

Focus on competitive advantages Domain expertise Breadth of capability Enhanced technology offering

International development

Selective acquisitions

Consulting Delivery

Support

23

Financial objectives (2008 – 2010)

Target of 10% organic growth in annual revenue over the medium-term

Progressive improvement in operating margins

Increase committed income to 60% of annual revenue

Enhance earnings growth through selective acquisitions

Progressive dividend

24

Current trading

Trading continues to be in line with our expectations

87% of 2008 planned revenue secured at 31 July 2008

Continued focus on margins

Pipeline of opportunities is good

Confident about prospects for remainder of 2008 and beyond

Tribal Group plc

Half year results for the six monthsended 30 June 2008

End

This presentation is intended only as a summary of key points from Tribal Group plc's announcement of its half year results for the period to 30 June 2008 ("the Half Year Results 2008"). Accordingly, reference should be made to the Half Year Results 2008 and not to this presentation

Contents

Documents

Transcript of Contents