Consulting

	Six months ended 30 June 2008 £’000	Pro forma six months ended 30 June 2007 £’000
Revenue	37,467	35,247
Operating profit	3,318	2,604
Operating profit margin	8.9%	7.4%

We have seen further improvement in the performance of our consulting business during the six months ended 30 June 2008, with revenue increasing by 6% to £37.5m (2007: £35.2m) and operating profit increasing by 27% to £3.3m (2007: £2.6m). Operating margins rose to 8.9% (2007: 7.4%) as a result of a tighter focus on pricing and our delivery model and a reduction in overheads.

Health

Our core health business returned a strong performance in the first half of the year. Tribal’s health informatics team won important contracts with NHS Connecting for Health supporting the national programme for IT, with a total value of around £2m.

We have expanded our service planning and performance improvement business and our health planning team is having a successful year as a result of broadening our client base and services across the UK and overseas. New business wins include a £1.1m assignment to support a hospital reconfiguration programme for Sandwell and West Birmingham Hospitals NHS Trust over the next two years.

We have continued to invest in our health commissioning business and have been shortlisted on a number of contracts on the Department of Health’s Framework for procuring External Support of Commissioning (FESC). We believe that we are well-placed to deliver our growth objectives in this key area of government policy.

We are also seeing a growing number of opportunities to develop our core health consulting business. In particular, we believe we are well-positioned to support implementation of the major changes set out in Lord Darzi’s NHS Next Stage Review, published on 30 June 2008. In addition, we see significant potential to increase the amount of work undertaken overseas as governments around the world invest in developing their healthcare systems.

Housing, regeneration and local government

During the period, we transferred our local government consulting activity into an expanded housing, regeneration and local government business. In July, we acquired a niche local government strategy consultancy which will be integrated with our existing practice. The combined business will increasingly allow us to provide end to end solutions from strategy through to implementation and provides us with a significant presence in the market at a time when local authorities are going through a period of intense change.

Our housing and regeneration business performed well during the period and overall demand for our service remains good. We continue to work with the Housing Corporation on the development of the role of the new regulator, the Tenant Services Authority. In Wales, our recent work with Merthyr Tydfil County Borough Council means that our multidisciplinary teams have now advised on 90% of all stock transfers in the Principality. We continue to be a leading adviser on new delivery structures for housing-led regeneration, working on substantial contracts with English Partnerships and a number of local authorities. Whilst the general housing market in the UK is experiencing serious difficulties, we continue to see a good flow of opportunities to provide consulting services to our social housing clients.

The master planning and urban design team we acquired in February has won a number of projects that will draw in expertise from across Tribal, for example, an urban extension in Hampshire that will include housing, community facilities, health centres and schools. We also secured a major research contract looking at the role of housing in supporting future economic growth in four of the North of England’s city regions.

We have completed a series of tourism-based master plans for four historic towns on the Red Sea coast of Saudi Arabia for the Royal Commission for Tourism. Work continues on preparing
long-term strategic master plans for the cities of Najaf and Kirkuk in Iraq.

Central government

In the first half of the year, our central government business experienced significant growth in revenue and profit. There has been further development of key accounts with the Department for Environment, Food and Rural Affairs, Home Office, UK Border Agency, Ministry of Justice, Department for Business Enterprise and Regulatory Reform (BERR) and Foreign and Commonwealth Office.

New business wins include a major contract to support the specification and procurement of communications networks for the UK government. We have also been awarded a three-year,
multi-million pound contract by DCSF to help schools across England and Wales improve their delivery of value for money.

We are continuing to see opportunities to provide a wide range of consulting services including leadership training, IT strategy, corporate status reviews, restructuring, commissioning and procurement. We are actively developing links into other areas of the public sector where Tribal can provide an integrated offering combining specific process skills and capabilities with specialist domain knowledge.

Tribal HELM

In June 2008, we completed the acquisition of a 72% shareholding in the HELM Corporation Limited, now Tribal HELM Corporation Limited (Tribal HELM), for £15.1m. Tribal HELM is a leading consulting business providing financial and management consultancy services to the public sector in the UK and internationally. The acquisition represents an important step in Tribal's strategy of growing its business internationally, developing its UK consultancy offering and increasing the levels of committed income. Approximately 60% of Tribal HELM's revenue is generated outside the UK and much of its international work is associated with long-term development projects that provide high levels of revenue visibility.

Tribal HELM’s overseas experience and strong relationships with major international donor organisations, such as the World Bank, European Union and the Department for International Development, will open up new markets for Tribal's existing services. The integration of the business is proceeding according to plan and a number of joint working opportunities have already been identified.

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