Tribal Investors - TRB

Tribal Investors - TRB

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Tribal Group Plc TRB London Ordinary Share GB0030181522 ORD 5P
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 101.00 15:26:17
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a2584728: I have a warm feeling here, I think? They have been doing the rounds in the City and been well received. May see some INstitutional investors coming on board, I would not be surprised to see some suitors at this level as well.
simon gordon: Crystal Amber - 8/9/14: Tribal Group PLC ("Tribal") Tribal is a leading education technology and services company active in the UK, Australasia, the Middle East and North America. Its systems and solutions include student records software, benchmarking services and school inspections. Its products are critical pieces of enterprise software: they support student admissions and manage the academic progress of students through module-based courses. In the most advanced versions, they can generate predictive analytics of student outcomes. They also deliver tangible paybacks to customers: Trinity College Dublin estimates to have improved its cash position by €6 million since it implemented Tribal's electronics admissions and fee collection system. Predictive analytics deployed for another customer should reduce student dropout rate, a drain on universities' revenues. The educational market is populated by companies selling content and delivery mechanisms (e-learning), two fields in which Tribal does not operate, and by companies that have developed student management systems, mainly as an offshoot from HR and Finance software packages. Tribal's competitive advantage is its deep expertise and focus on educational institutions. Education, which like healthcare is dominated by not-for-profit entities, is a favourable market for customer referrals and for sharing of good practice. With virtually no customer attrition, Tribal has grown to dominate the UK higher education market, with around 55 per cent market share. Highly profitable maintenance revenues have been growing progressively and now stand at 15 per cent of total group revenues, or £18.8 million. In the meantime new contract wins and their implementation revenues have grown faster. The 12 to 18 months period that an implementation takes gives an indication of the complexity of the product. From its UK base, five years ago Tribal initiated its international expansion targeting Australasia. Starting with the University of Sydney in 2009, additional wins followed and Tribal now generates around 20 per cent of its total revenues from the region. For the government of New South Wales, Tribal is developing a new model of integrated student and childcare management, extending from early years to higher education. This product will cover children's services, including wellbeing and early intervention programmes. The programme is expected to go live before the end of the year and it has the potential to be rolled out in other Australian states and back into the UK. Early in 2013, Tribal acquired i-graduate, a student satisfaction surveying company. This complements Tribal's benchmarking capabilities and brings relationships with top level officers at more than 500 higher education institutions around the world, many of which are in Tribal's target markets. Until three years ago, Tribal's strengths in education were hidden beneath a conglomerate of public sector related businesses. In 2010, government austerity hit its revenues and forced Tribal to rethink its acquisitive strategy. In 2011, the remaining non-education related businesses were sold. Simultaneously, offers were received for the company, suggesting that the value of the educational assets was being recognised. Tribal was in an offer period for most of 2010. In 2013, Tribal announced a new contract with the University of British Columbia in Canada, which has over 50,000 students. As usual, its value is open ended: the university will order licences for additional modules as the previous ones are installed. The Canadian market is approximately 50 per cent bigger than Australia and gives access to the larger US opportunity. Having regained investors' trust in the solidity of its education assets, Tribal is now winning credence for its growth potential in international markets. Whilst on trailing results Tribal does not appear undervalued, we believe that the current price is not reflecting the growth prospects. Since initiating the investment in March 2010, we have maintained a very positive sustained engagement with the board including discussion of its growth strategy and product roadmaps, issues that in our view require continued monitoring. Since its long offer period, its education business has grown and is more attractive to other business services companies. In our opinion, during this growth phase, the interest of shareholders would be best served by Tribal remaining independent.
johnwise: Blackrock has a substantial holding in this company "Black rock is the world's largest investor: They have 120+ Investment Teems -- 7,000+ portfolios managed and $4.3 Trillion in assets under management..." Blackrock,Inc.: Holding 5,579,038 shares Valued at £10,251,482
simon gordon: Analyst presentation has been uploaded to the TRB site: Http://
interceptor2: I still don't think that many investors are aware of the changed story here, and at first glance might not be able to see past the balance sheet. But much stronger buying today, so maybe there might of been mention of TRB somewhere over the weekend? ic2...
interceptor2: I have been looking at the business again, particulary at what net margins we might see in the future. In H1 2011 the education focussed business made an op margin of 10.1%, which means a net margin appx 6.7%. The revenue is normally evenly spread between H1 and H2, so H1 revenue of 59.4m would likely see appx 120.0m to the full year, and EPS of 8.6p. Brokers consensus forecasts = 7.53p which means they have used net margins of 6%. But I believe margins will improve quickly from now, the business is made up of two divisions which have very different op margins. Fortunately the Technology sector seems to be the area where to most exciting opportunities are, particulary in Australia and New Zealand. Technology sector, Revenue = 22.9m and Op margins = 19% Services sector, Revenues = 36.5m and Op margins - 4% The other reason for margin improvement is the annualised cost savings of 5.1m, which management have stated will improve Op margins. This cost savings have cost 4.2m to implement, but are in place now with the benefits first to be seen in H2, with 2,4m cost savings expected. Takeover target? Worth remembering that last year TRB were in talks about a takeover, now they are a focussed education business they will be acquired at some point imo. Remember EDD Education Development and MLO Melario, both taken over by Pearson's recently. And no wonder with the margins both company's achieved. EDD had Op margin of 31.2% and net margin of 24.6%. MLO had Op margins of 23.2% and net margins of 13.2% Now maybe TRB can't achieve the same levels yet, but even net margin level of 10% would see EPS of 12.8p on 120.0m revenues. Net debt = 16.0m With 5.1m cost savings and appx up to 8.5m still due from two major disposals last year, TRB should move to net cash surprisingly quickly imv. Looks like a classic turnaround to me, once investors look past historic balance sheet issues. The directors know all of the above only too well, just look at the large director buying recently Sep 11, COO, FD and C/Man buying at 47p, 48p. 13 Jan, CEO and FD buying at 55.44p and 57.8p. 20 Jan CEO and FD buying at 61.23p and 61.38p Regards ic2...
interceptor2: I agree TRB does ring a certain EDD bell, I haven't my EDD notes with me because I'm still in Spain, but I when I brought in August 2007 at about 25p the PE was a low single digit. I have a feeling that investors will be surprised at how quickly TRBs 16m pounds net debt falls from here. Disposal of Tribal resourcing Feb 2011 6.0m pounds max over 3 years. Government and Health business disposal in April 2011, 2.5m to come stated in May, not sure if they have received this yet. Will look tonight at a mention on the Zulu thread, but if you have info ready, please then go ahead and post. Regards ic2...
napoleon 14th: Ying + Yang = neutral. So much for the doomsayers. The fundies here are more than sufficient to support the share price for investors (in ISA). It won't take much to drive them up. Punters are another story...
interceptor2: cfro - FOUR thread 5th May "At least i've had a lovely chunky divi added to my account today." Surely you haven't spent it already? :~0 I read New Markets Wizards by Jack Schwager a few years ago, and often go back to re-read certain sections. I have just finnished reading One Up on Wall Street/Peter Lynch, it's not bad but for me it wasn't until the final quarter that it bacame more interesting. Peter Lynch is one of the few investors not to advocate any use of stops or targets, I wouldn't be comfortable investing this way. My next book to read is the classic Benjamin Graham/Intelligent Investor, this should keep me quiet for a while. ic2.......
davebowler: Stock to Watch: Tribal Group Fri, 15/04/2011 - 00:00 | Edmond Jackson This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. Event-driven investors may find it interesting to keep an eye on Tribal (TRB), a small cap support services company which has just restructured to leave a worthwhile ongoing business that also remains a bid play. This group has had a chequered history with the UK public sector as its mainstay, however, the future is all that counts and everything has its price. Tribal's long-term chart shows a de-rating from over 150p in 2007/08, amid deteriorating trading statements, as low as 24p late last year when a shocker of an update revealed "significantly more challenging trading conditions" than anticipated in its UK advisory activities hence a profit outlook substantially below expectations. Government cuts were biting. While the education side was continuing well, for example software and schools' inspection/improvement, weaker government and health business were prompting downsizing to reduce costs. Some £27.5 million net debt was however in context of £48 million total banking facilities. Bid speculation has rumbled since last August when there were "expressions of interest which may or may not lead to an offer for Tribal" and on 7 April press reports cited an offer for Tribal's education side by software and IT services group Civica. This is in addition to approaches for the healthcare-related business which on 11 April was confirmed by way of a sale to Capita Group (CPI), also including Tribal's government business, for £15.7 million. Management's rationale was the government and health businesses needing significant investment over time to generate worthwhile profitability and it does indeed look sensible for this smaller plc to focus investment on its most worthwhile activity. According to the 2010 prelims released on 30 March, this division accounted for virtually all of group operating profit, contributing £14.1 million on £106.6 million revenue. It is involved, for example, with technology/administrative systems, inspections, teacher training, careers advisory and apprenticeships - and given the political priority education enjoys, ought to be relatively resilient. Management is hedging its UK exposure with initiatives abroad such as winning first software clients at universities in New Zealand and China, also schools improvement in Tennessee and EU-funded special education needs provision in Turkey. It does not as yet appear significant enough to justify detailing by way of foreign turnover, at least within the 2010 prelims. The overseas initiative helps explain why the education side's operating margin of 13.2% was slightly down on 15.0% in 2009. "The pipeline now contains a larger proportion of higher value contracts than a year ago and includes an increasing overseas component." The 11 April update clarified that at end-February, education had committed income of £187 million with two-thirds of 2011 planned revenue secured and a sales pipeline of £161 million. Net cash proceeds of £12.5 million from the sale of health and government will cut debt and enable further investment and development of education. The overall impact of the disposals is expected to be broadly earnings neutral in 2011. One broker, Shore Capital, estimates 2011 pre-tax profit of £7.7 million for earnings per share of 6.1p and no dividend, rising to £8.9 million profit in 2012 for EPS of 7.1p and a 1.5p dividend. I would be surprised to see the directors interrupt their dividend policy as this could prompt some (institutional) investors to sell automatically, although the strength of earnings and how they are rated is really the crux for medium-term valuation. If the refocused Tribal can prove sound financial performance then the shares' price-earnings multiple ought to improve from single figures. The analyst involved at Shore Capital speculates that a deal to buy the rest of the group has now become more likely, with a possible sale value of £75-90 million. This compares with a current market value of £44 million, Tribal shares having risen from just below 40p to about 47p on the disposal news. While I would be cautious of bid speculation, it is a useful addition to what looks a reasonably sound investment case. As tends to be the case with service-oriented businesses, Tribal's end-2010 balance sheet had a lot of goodwill and intangibles; although the £102.9 million involved was down on £166.8 million at end-2009 after a £51.6 million goodwill impairment charge was taken with respect to the health and government businesses. This is in context of £69.8 million net assets (or 74.5p a share), down from £136.5 million at end-2009. While such asset backing reduces with the disposals, management says "the carrying value of goodwill for our education business has significant headroom." Current liabilities of £58.9 million slightly exceeded end-2010 current liabilities although there was £14.7 million cash. Debt was principally longer-term with £33.2 million bank loans making for £1.4 million finance costs relative to £7.4 million operating profit before exceptional charges. Such liabilities will reduce following disposals. A smaller sale came on 9 February: the disposal of Tribal Resourcing, a recruitment company serving the UK public sector which contributed £37,000 operating profit with gross assets of £10.8 million, so there will also be a balance sheet effect. The initial consideration was a nominal £1, but management has struck an earn-out deal for 20% of the revenue for three years with a maximum deferred consideration of £6 million; proceeds to be applied to continue to reduce debt. So the divestments look overall encouraging for both fundamentals and perception of Tribal. It will be necessary to keep an eye on how educational spending holds up, but the risk/reward profile looks to have improved now making Tribal more worthy of attention. For more information, visit
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