No regeneration at Tribal

27th Oct 2009 16:59

Public sector and education services provider Tribal Group says that trading conditions are becoming more challenging and its shares have fallen by one-sixth. The majority of the regeneration division is being closed because of poor market conditions and lack of recovery prospects. These activities lost £1m in the nine months to September 2009 and it will cost £2.5m to close them plus £4m in goodwill write-offs. Tribal believes that its underlying 2009 profit, excluding the regeneration business, will be similar to the £17.8m, before discontinued activities, reported last year. The education division is performing in line with expectations and has strong levels of committed income. Central government is still spending on consulting but this division is finding it tougher in the housing, health and local authority markets. Business is being delayed and that has put pressure on fees. Tribal is trying to cut annual costs by £5m. Net debt was £19.6m at the end of September 2009 and Tribal has £46m worth of bank facilities. Total committed income was £210m at the end of September 2009, slightly down on the £217m three months earlier. There is a sales pipeline of £266m. Tribal expects continued long-term growth in the public sector and health.