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Tribal Group PLC: Preliminary Results for the Nine Months Ended 31 December 2007

Tribal Group PLC reported strong preliminary results for the nine months ending December 31, 2007, showcasing an 11% revenue growth and a significant 98% increase in adjusted profit before tax to £11.1 million, compared to £5.6 million in 2006. The adjusted diluted EPS rose 112% to 8.9 pence. Additionally, cash conversion reached an impressive 142%, and net debt was notably reduced to £6.8 million. The Group remains focused on organic growth and enhancing operational efficiency, projecting continued growth in the public sector markets of education and health.

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Tribal Group PLC: Preliminary Results for the Nine Months Ended 31 December 2007

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  1. Tribal Group plcPreliminary results for the nine monthsended 31 December 2007Peter MartinChief ExecutiveSimon LawtonGroup Finance Director26 March 2008

  2. Contents • Highlights • Financial review • Operational review • Prospects

  3. Highlights Nine months to 31 December 2007 • Revenue growth of 11% • Adjusted profit before tax up 98% to £11.1m (2006 : £5.6m) • Adjusted diluted EPS up 112% to 8.9p (2006 : 4.2p) • Final dividend of 1.8p; annualised increase of 13% Pro forma 12 months to 31 December 2007 • Adjusted profit before tax up 20% to £15.8m (2006 : £13.2m) • Adjusted diluted EPS up 20% to 12.7p (2006 : 10.6p) • Cash conversion 142% • Net debt reduced substantially to £6.8m

  4. Financial review Simon Lawton Group Finance Director

  5. Revenue increase of 11% Operating profit* up 39% to £11.7m Significant fall in interest and bank fees Order book of £124m (2006: £108m) Bidding pipeline at £168m (interims: £84m) Final dividend of 1.8p total. Dividend of 2.95p, equivalent annual increase of 13% Income statement (9 months) * Before amortisation of intangibles, share option costs, goodwill impairment and financial instrument costs

  6. Pro forma year ended 31 December 2007 £m 2006 £m Growth % Continuing Operations Turnover 256.5 233.7 +10% Revenue 209.2 194.3 +8% Operating profit* 17.7 17.0 +4% Operating margin 8.5% 8.7% Interest (1.9) (3.8) Profit before tax* 15.8 13.2 +20% Tax (4.3) (3.9) Profit after tax* 11.5 9.3 +24% Adjusted fully diluted EPS* (pence) 12.7p 10.6p +20% No of WA diluted shares (‘000) 84,795 81,398 +4% Pro forma income statement (12 months) * Before amortisation of intangibles, share option costs, goodwill impairment and financial instrument costs

  7. Committed revenue growth £m

  8. % of Total Education £91m 74% Consulting £14m 11% Support Services £19m 15% £124m 2008 £84m 2009 £35m 2010 and beyond £5m Committed revenue At 1 January 2008 £5m £55m £31m £1m £13m £16m £3m

  9. Balance sheet • Balance sheet significantly strengthened by profitable sale of Mercury Health • Goodwill impairment of £9m for resourcing business (no change to interims) • Strong working capital management • Deferred consideration of £3m will be settled in cash in May • Gearing of 4% (31 March 2007 : 47%) • Retained earnings significantly improved to £37m

  10. Group cash flow • Operating profit to cash flow conversion for continuing operations of 142% (2006: 124%) • Refund of tax of £1.6m due to prior year one-off HMRC win • Capital expenditure of £6.5m (2006: £15.8m) includes product development costs of £2.3m (2006: £1.7m)

  11. Group net debt • £40m bank facility until June 2012 with HBoS and HSBC • Protected against future interest rate increases by interest rate swaps through to 2010 at 4.99%

  12. Operational review Peter Martin Chief Executive

  13. Analysis Nine months to December 2007

  14. Education

  15. Consulting

  16. Support services

  17. Management • Group HR Director appointed November 2007 • Appointment of COO well-advanced • Several senior appointments made or planned • Senior Leadership team now fully established • Focus on collaboration: • Respond to client needs • Develop integrated solutions • Formal management reviews completed: • Succession planning • Talent development

  18. Prospects Peter Martin Chief Executive

  19. Macro environment • Comprehensive Spending Review (CSR), October 2007 • Above average awards for education (5.6% p.a.) and health (4.0% p.a.) • Budget statement (March 2008) • Confirmed CSR spending plans • Extra funding for education • Gordon Brown (FT, 9 March 2008) • “…greater diversity of providers, more choice and …more competition…” • Continuing government agenda: • Public sector reform • Focus on efficiencies • Better value for money

  20. Group strategy Delivery Consulting • Focus on core public sector markets: • Education • Health • Housing & Regeneration • Local government • Central government • Services span consulting, support and delivery • Development of integrated service offerings • Investment in growth areas • Health commissioning • BSF • Recruitment process outsourcing • International development • Selective acquisitions Support

  21. Financial objectives (2008 – 2010) • Target double digit organic growth in annual revenue over the medium-term • Progressive improvement in operating margins • Increase committed income to 60% of annual revenue (from current ~40%) • Enhance earnings growth through selective acquisitions • Progressive dividend growth

  22. Current trading • Trading in line with our expectations since the start of the year • Delivered plus committed revenue 55% of 2008 plan at end of February • Continuing investment / higher bid activity in H1 2008, particularly in education • 2008 will benefit from reduced interest charge • Pipeline of opportunities is strong • Look forward to 2008 and beyond with confidence

  23. Tribal Group plcPreliminary results for the nine monthsended 31 December 2007End

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