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Tribal Group Plc (TRB:LSE), the provider of public sector services, has issued an update on trading, covering the period from 1 January 2010 to date.
The group says in a statement "trading in the early months of the year has been as anticipated. Revenue for the four months to 30 April 2010 was ahead of the comparable period last year in our Education and Health businesses. Revenue in our government business was, as expected, behind last year, reflecting the impact of the general election on our advisory markets."
"During the period, we have secured a number of new contracts and extensions. These include the five year, 64 million Pounds award by Ofsted to manage inspection services for early years providers announced in February, a new 4.2 million Pounds adult careers service contract, the renewal of our 3 million Pounds schools 'value for money' contract with the Department for Education and an extension of our commissioning work with Primary Care Trusts in the South of England worth 1.2 million Pounds. We have also made good progress overseas in our Education and international development businesses."
"Our committed income levels have risen significantly during the period. At the end of April, committed income stood at 278 million Pounds, an increase of +28% since the start of the year. At 1 May 2010, we had delivered or secured 68% of our planned revenue for the year (2009: 65%)."
"We are increasingly focusing our sales and business development effort on growing our service delivery and technology offerings and developing our international activities. Our underlying sales pipeline remains encouraging."
"Our programme of cost reduction announced in October last year is now largely completed and will deliver annualised cost savings in excess of 7.5 million Pounds. We are continuing to focus closely on operational performance and to identify further opportunities to reduce costs and enhance margins. Since the start of the year, we have completed the reorganisation of our government business and we expect to see the benefits of operating with a lower cost base and a fully integrated business model in the second half of the year."
"At the end of April, net debt was below 26 million Pounds. Tribal remains securely financed with total bank facilities of 48 million Pounds, of which 40 million Pounds are committed until June 2012. Our capital reduction plans announced in March are now well-advanced and we will be seeking shareholder consent to our plans at our Annual General Meeting (AGM) on 20 May 2010."
As previously announced, John Ormerod will become Chairman of Tribal following the AGM.
Peter Martin, Chief Executive, commented "a key priority for the new government will be to reduce the budget deficit and reform of the public sector will remain a key plank of policy. With our focus on service delivery, advisory and technology solutions that improve the delivery of public services, Tribal is very well-positioned to support public sector organisations as they undertake change and to participate in an expected acceleration of outsourcing opportunities that will contribute to the improvement in public sector efficiencies."
"We continue to anticipate that softer conditions in our advisory markets will result in the financial performance in the first half of the year being behind the comparable period last year and that the significant increase in committed income and the benefits of our cost reduction programme should support a stronger second half and our expectations for the full year outcome."