Software firm Tribal reports lower profit following legal settlement
Educational software provider Tribal Group reported lower post-tax profit and earnings per share in its interim results, sending shares down 5.3 per cent at market open on Tuesday.
The Bristol-based company that provides software and services to the international education market, said profit after tax fell 69 per cent to £1.4m in the six months ended 30 June, down from £4.7m in the first half of 2023.
Tribal said this was due to increased exceptional costs of £3.4m, of which £2.8m relates to a settlement with Singapore’s Nanyang Technological University (NTU).
Earlier this year, Tribal said it had reached a settlement agreement over its contract with the NTU which was terminated by the university in March 2023. NTU demanded payment of $9.9m (£7.6m) for damages on account of alleged loss, costs and expenses.
Tribal rejected this demand and has since been engaged in private settlement negotiations with the university. Without admitting liability, Tribal agreed to pay to NTU £3.1m in full and final settlement over 18 months.
Statutory earnings per share dropped from 2.2p last year to 0.6p in 2024, a more than 71 per cent decrease.
Tribal announced an interim dividend of 0.65p per share at the end of November 2024 following the settlement with NTU and improved cashflow of £2m, compared to a negative cashflow of £3.4m the prior year.
Revenue spiked 5.2 per cent year on year to nearly £45m in the first half of 2024 but adjusted earnings before interest, tax, depreciation and amortisation dropped 6.8 per cent to £7.4m, down from £8.1m in 2023.
Chief executive, Mark Pickett, said: “We delivered a steady overall financial performance in the first half of the year, while achieving our principal aims of resolving the NTU contract and refocussing the business following the end of the Offer period.
“We have introduced initiatives to accelerate the transformation of Tribal into an EdTech SaaS business, with a view to growing ARR, safeguarding our operating profit margins, increasing cash flow generation and enabling the ongoing reduction in our debt,” he added.