Chairman's statement
We were pleased by the level of growth in adjusted operating profit (10%) which, combined with a significant reduction in interest costs, resulted in adjusted profit before tax increasing by 38% and adjusted diluted earnings per share by 37%.
Operating cash flow was very strong, which supported the financing of acquisitions made during the period. At 30 June 2008, our net debt was £7.3m.
We have been encouraged by the level of demand for our services across all our principal markets. Both our consulting and support services business streams recorded significant increases in profits. Profits in our education business fell slightly, compared to this time last year, because of particularly strong software sales in the first quarter of last year and planned investments this year in new services and increased business development activity.
Following the change in year end, we have reviewed our dividend policy and expect to pay an interim dividend equal to approximately 40% of the anticipated total dividend. The interim dividend in respect of the six months ended 30 June 2008 will be 1.7p.
Strategic priorities
We continue to focus on the successful implementation of the strategic priorities that we established following our review last year:
- driving collaboration across Tribal in order to develop integrated solutions for our clients
- investing in new areas of opportunity such as health commissioning
- exporting our skills and capabilities into overseas markets
- identifying acquisitions that will strengthen or complement our existing service offering
- attracting and recruiting high quality people.
We have commenced the search for new independent non-executive directors. We have been pleased by the interest shown in the Group and expect to confirm our appointments in the coming months.
Prospects
We are encouraged by current trading. While conditions in the wider economy have clearly deteriorated in recent months, we believe that our core business of working with a broad range of organisations to support the delivery of public services in the UK and, increasingly, overseas should prove resilient. We have secured a wide range of important contract wins and the level of committed income is good. Our clients continue to seek solutions that will improve quality, efficiency and, importantly, value for money. The pipeline of opportunities is improving and the Board is confident about Tribal’s prospects for the remainder of 2008 and beyond.
Strone Macpherson
Chairman
19 August 2008