Tribal Group plc had a successful year in 2008, with revenue increasing 12% to £234.0m and adjusted profit before tax rising 21% to £18.6m. The Board is recommending a final dividend of 2.65p per share, bringing the total dividend for 2008 to 4.35p per share. Tribal strengthened its senior management team and integrated recent acquisitions during the year. While general economic conditions remain challenging, Tribal is well positioned in key public sector markets such as education and health.
1. TRIBAL
T R I B A L
Report and Accounts 2008
Tribal Group plcTribal Group plc
87-91 Newman Street
London
W1T 3EY
T 020 7323 7100
E info@tribalgroup.co.uk
www.tribalgroup.co.uk
TribalGroupplcReportandAccounts2008
2. Our business
Tribal provides consultancy, support and delivery services
focused on improving the delivery of public services in the
UK and internationally. Our broad offering combines an
in-depth understanding of our chosen markets with
professional expertise and a strong technology capability.
Our approach
We work in partnership with our clients to make a positive
difference to the communities they serve and to ensure the
best possible use of public funds.
Our services
strategy
performance improvement
training and development
programme and project management
communications
information technology
people attraction, selection and retention
procurement and supply chain
built environment design and planning
Our markets
education
health
central government
housing and regeneration
local government
international
Designed by Kindred Agency. Produced by Accrue*.
The paper used for this report uses ECF (Elemental Chlorine Free) pulps supplied by manufacturers with
environment-friendly and sustainable reforestation policies. The report has been printed using soya-based inks
and the printing process conforms to ISO 14001.
3. Tribal Group plc Report and Accounts 2008 01
Business review Governance > Financial statements >
Contents
Business review
Highlights 02
Financial summary 03
Chairman’s statement 04
Chief executive’s statement 06
Business review 18
Strategy
Our markets
Our people
Risk management
Key performance indicators
Financial review
Corporate responsibility
Governance
Board of directors 40
Directors’report 41
Corporate governance 43
Remuneration report 46
Statement of directors’
responsibilities 51
Financial statements
Independent auditors’report to
the members of Tribal Group plc 52
Consolidated income statement 53
Consolidated balance sheet 54
Consolidated cash flow statement 55
Consolidated statement of
recognised income and expense 56
Notes to the financial statements 57
Unaudited pro forma financial
information 93
UK GAAP – company financial
statements 99
Five year summary 107
Company information 108
Our vision
At their best, public services provide everyone
with the opportunity to fulfil their potential.
In today’s complex world, efficient and effective
public services depend on the collaborative effort
of people working across the public, private and
voluntary sectors.
Tribal’s distinctive offering combines professional,
commercial and public service expertise. We work
in partnership with our clients to help shape policy
and improve the quality and value for money of
public services.
Whether we are raising standards in schools and
colleges, regenerating communities or improving
hospitals, our focus is on delivering outcomes that
enrich lives.
Stronger together.
4. Business review Governance Financial statements
02 Tribal Group plc Report and Accounts 2008
Highlights
Revenue1
increased by 12% to £234m, supported by
acquisitions made during the year
Adjusted profit before tax2
up by 21% to £18.6m,
aided by a significant fall in interest charges
Committed income up by 12% to £139m
Significant growth in sales pipeline to £297m
Strong balance sheet with net debt at £19.7m against
facilities of £40m
Senior management team strengthened
Acquisitions successfully integrated
International development progressed
Award of new Ofsted contract
Commentary
“The Group made further good progress during 2008. Profits and earnings
increased significantly and we successfully implemented a number of key
initiatives that will provide us with a stronger platform from which to grow
and develop.
“Despite the challenges in the wider economy, our clients remain
committed to transforming public services and working with
partners to improve performance, reduce costs and effect
change. Whilst the pressures on public sector spending are
likely to increase, we are encouraged by our current levels
of committed income and the strength of the sales pipeline
and we believe that Tribal is well-positioned to make further
progress in 2009.”
Peter Martin,Chief Executive
5. Tribal Group plc Report and Accounts 2008 03
Business review Governance Financial statements
Financial summary
Year Year Nine months
ended ended ended
31 December 31 December 31 December
2008 20071
Change 20073
Revenue £234.0m £209.2m +12% £153.3m
Adjusted profit before tax2
£18.6m £15.4m +21% £10.6m
Profit before tax £18.0m £6.0m £1.2m
Adjusted earnings per share2
14.7p 12.2p +20% 8.4p
Earnings/(loss) per share 14.1p 1.3p (2.6)p
Dividend per share 4.35p 3.93p +11%
Operating cash flow4
£21.4m £22.4m
Operating profit to cash conversion 136% 137%
Notes:
1. Following the change of year end in 2007,and in order to assist with analysis and comparison,we have included like-for-like comparisons based on the
unaudited pro forma results for the year ended 31 December 2007.
2. The adjusted profit before tax and adjusted earnings per share exclude goodwill impairment of £nil (2007:£9.0m),intangible asset amortisation of
£0.6m (2007:£0.3m) and the financial instrument charge of £0.1m (2007:£0.1m) and,in the case of earnings per share,the related taxation of £0.2m
(2007:£0.1m) and discontinued operations.
3. Statutory results for the nine months ended 31 December 2007.
4. Operating cash flow is defined as net cash from operating activities less interest.
Case studies
Page 9
Keeping parents in the know
Page 11
A healthy partnership
Page 39
A break from the city
Page 14
Learning to change lives
Page 13
Helping schools get VfM
6. Business review Governance Financial statements
04 Tribal Group plc Report and Accounts 2008
Chairman’s statement
The Group had a successful year in 2008. We made further progress in
our financial and operational performance and took a number of steps to
strengthen Tribal’s position as a leading provider of consultancy, support
and delivery services to the public sector in the UK and internationally.
Performance
During the year,our revenue grew by 12% to £234.0m and adjusted operating profit rose by 14% to £19.8m.Adjusted profit before
tax was up 21% to £18.6m and adjusted earnings per share increased by 20% to 14.7p.Our cash performance was excellent and we
were particularly pleased to achieve an operating cash conversion of 136%.
Tribal’s financial performance has improved substantially over the past two years.We now have a strong balance sheet,low levels
of debt and considerable headroom against our bank facilities,placing us in a good position to address both opportunities and
challenges over the coming year.
Dividend
The Board is recommending a final dividend of 2.65p per share,bringing the total dividend for the year ended 31 December 2008
to 4.35p per share.This represents an increase of 11% on a pro rata annualised basis.Subject to approval at Tribal’s 2009 Annual
General Meeting (AGM),this dividend will be paid on 17 July 2009 to shareholders on the register at 19 June 2009.
Strategy
The next two years will be very challenging for the general economy and our expectation is that public sector spending will
come under increasing pressure.The outcome of the general election,which will take place in the next 14 months,will also have
an influence on the direction of public policy.However,Tribal operates in a public services industry that is now a substantial
and permanent feature of the UK economy.Our core markets,such as education and health,will remain priorities for reform
and improvement and the requirement for government to increase efficiency and identify cost savings will continue to create
opportunities for our business.
Our priority for 2009 is to build further resilience into our business model by increasing the levels of committed income.We have
taken steps to improve our business development processes,with the aim of improving account management,sales qualification
and our contract win rate.The award in February 2009 of our new £75m Ofsted contract was a major step in achieving our
objectives.
7. Tribal Group plc Report and Accounts 2008 05
Business review Governance Financial statements
We are also looking to develop our business internationally.The acquisition of Tribal
HELM was a significant step in expanding the Group’s international footprint.
We are very encouraged by the strength of the international sales pipeline and
expect it to be a key contributor to our future growth.
Risk management
During these more challenging times,it is even more important to have in place
robust risk management systems and effective internal governance.In 2008,
we undertook a formal review and analysis of our business and the market
environment and have now assigned the management of our key risks to a small
group of senior leaders.We have also revised our internal financial control systems
to ensure authority and approvals are set at appropriate levels for the organisation.
We have appointed a group risk manager to embed and monitor risk management
across our business streams.
People
Our staff and associates are the key driver behind our good performance last year.
Their hard work,loyalty and commitment ensure that we are able to deliver high
levels of customer service.In 2008,we invested substantially in developing our
people and reviewing our benefits package in order to ensure that we remain
competitive in the marketplace and continue to attract high quality people.
New initiatives for 2009 will include the launch of a fast track development
programme for graduates with up to three years’work experience.
Board of directors
There were a number of changes to the composition of the Board during the year.
As announced in March 2008,Henry Pitman,Tribal’s founder and former chief
executive,stepped down from his non-executive role on the Board.At the end of
November,Tim Stevenson OBE retired as a non-executive director following his
appointment as Lord Lieutenant of Oxfordshire.David Thompson has taken on the
role of senior independent director,in addition to his chairmanship of the Audit
Committee.On 1 November 2008,Lady Katherine Innes Ker joined the Board as an
independent non-executive director.She chairs the Remuneration Committee and
has joined the Audit and Nomination Committees.
Outlook
We entered the current financial year in an encouraging position,with nearly 40%
of our planned revenue for the year already contracted.Our sales pipeline has
increased significantly over the past year and,at 1 January 2009,stood at £297m,an
increase of more than 77% over the previous 12 months.
Despite the challenges in the wider economy,organisations in the public sector will
continue to face significant pressure to reform the delivery of services,to achieve
efficiency gains and to accelerate the identification of cost savings.Whilst the
overall environment for public sector spending will become more difficult,Tribal
remains well-positioned to support its clients in achieving their objectives and
meeting their key organisational challenges.We therefore remain confident of our
ability to make further progress during 2009.
17 March 2009
Strone Macpherson
Chairman
17 March 2009
“The requirement
for government to
increase efficiency
and identify
cost savings will
continue to create
opportunities for
our business”
8. Business review Governance Financial statements
06 Tribal Group plc Report and Accounts 2008
Chief executive’s statement
We are pleased to report a strong financial performance for the year ended
31 December 2008*. The Group’s revenue was up 12% at £234.0m
(2007: £209.2m). Adjusted operating profit increased by 14% to £19.8m
(2007: £17.3m) and the adjusted operating margin increased from 8.3% to
8.5%. Adjusted profit before tax was up 21% at £18.6m (2007: £15.4m) and
the adjusted earnings per share increased by 20% to 14.7p (2007: 12.2p).
The Board is proposing a final dividend of 2.65p per share, making a total of
4.35p per share for the year.
During 2008,the Group generated operating cash flows of £21.4m (2007:£22.4m),representing an operating cash conversion
of 136% (2007:137%).The strong cash generation supported the financing of acquisitions made during the period.Net debt at
the year end was £19.7m against committed bank facilities of £40m that run until June 2012.Tribal recently increased its annual
working capital facility to £6m,providing the Group with further headroom and financial flexibility.
The improvement in financial performance was achieved during a period of organisational development.The Group strengthened
its senior management team,with the appointment of Andy Field as chief operating officer,Jonathan Garnett as chief executive
of the education business and Matthew Swindells to lead the health business.We made a number of strategic acquisitions,
restructured our education business to better align our operations with market opportunities and integrated our housing,
regeneration and local government consulting practices.These changes will support our growth plans and enhance the strategic
positioning of the Group in the UK and internationally.
General economic conditions remain very challenging and the Group anticipates further tightening in overall public sector
spending in the UK,particularly following the next general election.However,key areas such as education and health will remain
priorities for government and we believe that we are well-positioned to support reform and changes in the implementation and
delivery of public policy.Our business is driven primarily by change and each of the three main political parties has emphasised
the need for further reform and improvement in public services.Whilst we will not be immune to a more difficult environment
for public sector finances,we expect to see continued demand from clients who are required to improve performance,enhance
service quality,allocate resources more efficiently and achieve better value for money.Our market position is now well-established
in our core areas of activity and our presence on key public sector procurement frameworks provides a steady stream of new
business opportunities,while remaining a barrier to new market entrants.
9. Tribal Group plc Report and Accounts 2008 07
Business review Governance Financial statements
In 2008,92% of our revenue was generated from the UK public sector.Our principal
markets were:education 38%,central government 20%,health 16%,housing
and regeneration 9% and local government 9%.Our international business
has developed during the year,particularly following the acquisition of HELM
Corporation in June 2008,and we expect the percentage of revenue from overseas
activities to increase significantly in 2009.
Our sales pipeline has strengthened over the past year and currently stands at close
to £300m.Of the top 30 contract opportunities across the Group,nearly 75% by
value relate to health or education projects,approximately 20% is represented by
international tenders and less than 4% are capital related.
Education
Unaudited
Year pro forma
ended year ended
31 December 31 December
2008 2007
£’000 £’000
Revenue 96,408 91,581
Operating profit 14,303 14,928
Operating profit margin 14.8% 16.3%
Our education business saw an increase in revenue of 5% to £96.4m (2007:£91.6m)
during the year ended 31 December 2008.Operating profit was £14.3m
(2007:£14.9m) and the operating margin was 14.8% (2007:16.3%).The anticipated
fall in operating margin during the year was a result of three principal factors:
reduced contribution from higher margin activities,planned investment in new
products and services and increased business development activity.These factors
will continue to apply during 2009 and we therefore anticipate operating margins
remaining at a broadly similar level to those achieved in 2008.
The education business provides a wide range of consulting,support and delivery
services across the education,skills and training markets.Our services support key
government policy initiatives to improve educational standards,increase quality
and deliver better outcomes for learners.We deliver these services to education and
learning providers through performance improvement programmes,high quality
management systems and innovative learning content.Our offerings encompass
early years,schools,further education (FE),higher education (HE),workplace and
prison settings.
Government investment in education and learning remains strong,with school
improvement,workforce training and skills development becoming increasingly
important in the current economic and political climate.Our business is built on
strong relationships with our client base and excellent customer service delivery.
It is underpinned by recurring annual support and maintenance revenue for our
software products and a range of long-term contracts.
We have seen good demand for our services during the period and have secured
significant new contracts across the business.Our application of innovative
technology to organisational efficiency,workforce development and improved
learner engagement continues to provide us with a key differentiator both at
home and,increasingly,overseas.We are also drawing on the Group’s broad range
of expertise in related areas to offer our clients an enhanced and coherent set of
solutions to address major social problems.
Note:
* Following the change of year end,and
in order to assist with analysis and
comparison,comparative data is based
on the unaudited pro forma results
for the year ended 31 December 2007,
unless otherwise stated.
10. Business review Governance Financial statements
08 Tribal Group plc Report and Accounts 2008
At the end of 2008,we appointed Jonathan Garnett as chief executive of our
education business stream and implemented a restructuring of our operations
into six areas in order to reduce costs,improve performance and maximise our
opportunities for growth.The six new business groupings are as follows:
Science,technology,engineering and mathematics (STEM)
In order to support the competitiveness of the UK economy,the Government has
recognised the importance of increasing the availability and capability of
STEM-literate individuals.We have been working closely with government to
support the STEM agenda.During the year,our contract for the National Centre
for Excellence in the Teaching of Mathematics was extended for an additional two
years.We won an initial £3.4m contract to support the development of quality and
expertise in the teaching of STEM subjects.We also provided expert consultancy on
the development of a programme to tackle numeracy needs among adults.
Employability and skills
We support the work of major employers such as McDonald’s,Royal Mail and Ford
Motor Company in developing the skills of their workforce.We have continued
to expand our client base with the award of a number of contracts to provide
web-based learning services for organisations such as Sainsbury’s.We grew our
business in employability,where we secured contracts with the Learning and Skills
Council (LSC) worth up to £5.8m.Our work to deliver family literacy,language and
numeracy programmes for the Learning and Skills Improvement Service (LSIS)
was extended with contracts worth a further £1.4m.We continued to support the
rehabilitation of offenders and we have been shortlisted by the LSC to extend our
information,advice and guidance services to offenders and ex-offenders across
three UK regions.
Education and training solutions
Our student and institution administration software products continue to perform
well.We lead the market in the UK in FE,HE and work-based learning.The strength
of our market position provides good opportunities to secure further contracts
for our software and services,both in the UK and internationally.We are currently
pursuing a number of opportunities in the Middle East and Australasia,where there
are growth opportunities for selling an integrated solution of services and software.
In FE,our Improvement Adviser Service contract with LSIS was awarded a two-year
extension worth £3.6m per annum.Our FE and HE benchmarking products
continue to develop market share in the UK and our long-term contract in New
Zealand is providing a platform for expansion into other markets in Australasia.
Children’s services
We have continued to build our capacity in children’s services and to strengthen
our market position.Around 70% of local authorities now use our software and
we won over 40 new local authority clients during the year for our family and
management information services software.
We were awarded several contracts to support the National Challenge programme,
which aims to raise standards and educational outcomes in secondary schools.
To date,these include a £1.4m core contract in Greater Manchester,and additional
contracts in Sheffield and Hull.Tribal succeeded in winning a number of the first
contracts under the new church school improvement framework and our Building
Schools for the Future (BSF) team won contracts with five local authorities,as well
as a place on the new Partnerships for Schools education framework.
Chief executive’s statement
11. Tribal Group plc Report and Accounts 2008 09
Business review Governance Financial statements
Information and technology solutions
We have seen strong demand for Tribal’s expertise in creating bespoke portals that
enable our clients in education to improve operational efficiency and support key
policy initiatives.We are currently exploring a number of opportunities to apply
our innovative,technology-based solutions in the wider public sector.We built on
our work supporting parenting initiatives for the Department for Children,Schools
and Families (DCSF) and secured a £3.1m contract to provide an information
system that will give parents online access to data on childcare and family service
provision (see case study below).We also successfully secured a £2.1m extension to
our contract with the workforce development agency Skills for Care to develop a
placement matching system for social care students.
Keeping parents in the know
While a vast amount of data which could be helpful to parents exists, it can be
difficult to know where to find the most valuable and current information. Tribal
is developing an online directory for the DCSF, which will provide parents with
up-to-date, integrated national and regional data about childcare and family
service provision.
We also recently pioneered e-learning tools as part of a social networking
website which aims to support parents of teenagers. The website
– www.gotateenager.org.uk – was developed for national charity Parentline
Plus and is accessible through various channels, including mobile phones.
The site attracted 41,000 unique visitors within the first six weeks of going live.
“We wanted to extend the reach and accessibility of our service and so
we are pleased with the high volume of visits and the large amount of
positive feedback we have received. We found Tribal to be very capable
and responsive and a good working relationship has developed
through the process.”
Nikola Mann, New Media Manager, Parentline Plus
12. 10 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Chief executive’s statement
“We are
increasingly
working with
our clients at a
strategic level to
address their key
organisational
challenges”
Inspections
Tribal is the largest provider of school inspections in the UK and we continued to
perform well in the final year of our existing contracts with Ofsted.In February
2009,we announced that we had been appointed for a new six-year contract to run
inspections of schools and other educational establishments.The new contract is
worth approximately £75m and will operate from September 2009.The growing
overseas school improvement market also provides us with significant new
opportunities and,during the year,we won a contract in Abu Dhabi to establish an
inspections framework for private schools.
Consulting
Unaudited
Year pro forma
ended year ended
31 December 31 December
2008 2007
£’000 £’000
Revenue 85,191 68,666
Operating profit 8,250 4,911
Operating profit margin 9.7% 7.2%
We have seen a significantly improved financial performance from our consulting
business,with revenue increasing by 24% to £85.2m (2007:£68.7m) and operating
profit up by 68% to £8.3m (2007:£4.9m).Operating margins rose to 9.7%
(2007:7.2%).The improvement in overall performance was supported by the
acquisitions made during the year that contributed some £2.4m to operating profit.
The year was one of considerable change for the consulting business.We made a
number of strategic acquisitions,which has enabled us to provide an enhanced
offering in many areas of the business,and the acquisition of HELM Corporation
in June 2008 has provided us with both a new service line and a significant
international presence.
Much of our consulting work is focused on supporting and delivering change
through programmes to improve performance,reduce costs and allocate resources
better.While we can expect overall government spending to become tighter,the
drive for reform and improved quality continues and we are increasingly working
with our clients at a strategic level to address their key organisational challenges.
The national significance of our work was recognised at the end of 2008 by the
Management Consultancies Association,when one of our senior consultants won
the Strategic Consultant of the Year Award.
Health
Our health business remains at the forefront of supporting change in the health
service.It delivered a strong performance during the year and has continued to grow
its core consulting activities,as well as successfully developing new service lines.
The Government has identified world class commissioning as crucial to driving
productivity improvements in the public sector.During the period,we secured our
first major contract under the Department of Health’s Framework for procuring
External Support for Commissioners.The £4.8m contract was awarded by Ashton,
Leigh and Wigan Primary Care Trust (PCT) with whom we have entered into an
innovative,three-year partnership (see case study on page 11).We have a strong
pipeline of other commissioning opportunities.
13. Tribal Group plc Report and Accounts 2008 11
Business review Governance Financial statements
We are delivering national projects to ensure the provision of improved information
for the planning and management of the NHS and health research.We have further
expanded our role supporting the health service’s National Programme for IT,
securing new and extended contracts worth more than £2m.
During the period,we acquired Westhill Consulting,a specialist provider of
consultancy and clinical coding services,and in January 2009 we purchased
Newchurch,a leading health strategy and change management consultancy.As a
result of these acquisitions,Tribal is now able to offer comprehensive support to
healthcare organisations in the UK and,increasingly,overseas.
A healthy partnership
Improving both the quality of healthcare and access to services is at the
heart of Government plans to transform the NHS. However, health service
leaders also need to ensure that their organisations are run as effectively and
efficiently as possible. Tribal is at the leading edge of helping them meet these
complex challenges.
Ashton, Leigh and Wigan Primary Care Trust (PCT) is responsible for improving
the health of one of the most deprived parts of England through its allocation of
an annual budget of £456m. Working as an integral part of the PCT, Tribal is using
advanced tools and transformation teams to help the Trust identify and understand
local health needs and plan and commission services to better meet those needs.
“Tribal has demonstrated its ability and skill in both
influencing and challenging the organisation in
relation to the key priority areas. Tribal is a valued
and dynamic partner, which both shares our core
values and has helped us to aspire to realise
our potential.”
Hilary Heywood,
Programme Director,
Ashton, Leigh and Wigan
Primary Care Trust
14. 12 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Chief executive’s statement
Housing,regeneration and local government
During the period,we transferred our local government consulting activity into
an expanded housing,regeneration and local government practice.We also
strengthened the business by making two strategic acquisitions.In February 2008,
we acquired a master planning and urban design team in order to increase our
capability in regeneration in the UK and internationally.In July,we purchased a
specialist local government strategy consultancy,which has enhanced both our
service offering and our presence in the market.
We are the market leader in social housing consultancy and we continue to play
a prominent role in shaping the future funding and development of new social
housing stock.While the limited availability of funding for new social housing
has had some impact on the demand for our housing development support and
treasury services,it has also created new opportunities for our governance,financial
advisory and business planning teams.
The breadth and capability of our regeneration activity continued to develop
during the year.However,the business is now facing more difficult trading
conditions in certain areas and we have therefore initiated a programme to reduce
costs and reshape a number of our services.
Our consultancy capability in local government has been transformed during the
period and we now have one of the largest practices in the UK.Our ability to offer
end-to-end solutions,from strategy through to implementation,has enabled us to
address larger opportunities as local authorities increasingly focus on improving
efficiency and delivering better value for money.
Central government
Tribal’s central government consulting practice continued to show significant
growth in both revenue and operating profit during the year.Much of the growth
was achieved through securing contracts to provide strategic support to major
government programmes and improving our key account management.We have
also seen the pipeline of new business opportunities grow significantly.
The practice has developed new service lines tailored specifically to address
major central government issues,for example,support in prioritising programme
portfolios. We have also focused on developing strategic relationships with key
government departments such as the Home Office,Foreign and Commonwealth
Office and the Ministry of Justice.
We secured contracts with the UK Border Agency to produce large,complex
business cases and with the National Policing Improvement Agency to deliver
efficiency programmes that enable officers to spend more time on frontline duties.
We won a substantial three-year contract with the DCSF to deliver a national
programme to schools across England and Wales supporting the more effective
use of resources (see case study on page 13).
15. Tribal Group plc Report and Accounts 2008 13
Business review Governance Financial statements
Helping schools get VfM
Schools are under increasing pressure to demonstrate value for money and
manage their resources effectively. Tribal manages a national programme,
called Value for Money, which delivers tailored consultancy support to primary,
secondary and special schools across England.
The consultancy visits focus on ideas that cut across all school management
decisions, including strategic management and staffing issues, as well as
helping make cost savings. The programme is funded by the Department for
Children, Schools and Families and nine out of ten schools we have visited have
said that they would recommend the programme to others.
“We found the whole exercise incredibly valuable. It’s a fabulous service
that every school can benefit from.”
Maran White, Headteacher,
Robert Le Kyng Primary, Swindon
16. 14 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Tribal HELM
In June 2008,Tribal acquired HELM Corporation,a leading consultancy business
that provides financial and management consultancy services to the public
sector in the UK and internationally.The acquisition represented a significant
development in our strategy to expand our consulting service offering,increase
our committed income and grow our international business.Around 60% of Tribal
HELM’s revenue is generated outside the UK,typically from long-term projects that
provide high levels of revenue visibility.
Post-acquisition,Tribal HELM has delivered a strong financial performance in
line with our expectations.The practice was awarded new contracts to support
international finance and public sector governance reform in Macedonia,Kosovo,
Cambodia,the Philippines,Rwanda and Peru.These projects,which aim to improve
the management of public funds,are supported by the World Bank,the European
Commission,the UK Department for International Development and the Australian
Government.
Tribal HELM’s pipeline includes major projects in Europe,Asia,Africa and South
America,and its global footprint and strong relationships with major international
donor organisations are opening up new opportunities for our education offering
and other Tribal services.
Chief executive’s statement
Learning to change lives
Good governance is fundamental to ensuring economic growth and sustainable
development in emerging and developing countries. Tribal HELM has been
working with the Bangladesh Government on the Managing at the Top 2 initiative
for the past two years.
This innovative training programme, funded by the UK Department for
International Development, is based on experiential learning and provides
participants with the opportunity to design, develop and implement new policies
and reforms. Through the programme, the traditional methods of learning at
Sikder Abdul Malek High School were replaced with inclusive teaching and a
participatory approach. This award-winning project turned a failing school of 300
pupils into a successful school with 650 pupils within 12 months.
“The project is creating a
continuously growing, critical
mass of senior officers who
feel comfortable in handling
change when they have
the right skills and proper
support. It is also helping
with key improvements in
governance that will benefit
important areas such as
poverty reduction.”
ASM Ali Kabir, Secretary,
Ministry of Establishment,
Government of Bangladesh
17. Tribal Group plc Report and Accounts 2008 15
Business review Governance Financial statements
Support services
Unaudited
Year pro forma
ended year ended
31 December 31 December
2008 2007
£’000 £’000
Revenue 54,277 51,997
Operating profit 4,861 4,041
Operating profit margin 9.0% 7.8%
Our support services businesses delivered a good performance for the year
ended 31 December 2008,with revenue 4% higher at £54.3m (2007:£52.0m) and
operating profit increasing by 20% to £4.9m (2007:£4.0m).Operating margins
increased to 9.0% (2007:7.8%).
Architectural design
The Group’s architectural design business performed well in the period and the
order book and sales pipeline have continued to strengthen.We have the leading
health architectural practice in Europe and have been appointed on three of the
major UK health procurement frameworks:ProCure21 in England,Designed for Life
in Wales and Frameworks Scotland.
In April,we were awarded the contract for the £300m HealthVision Swansea
scheme,the largest hospital project to be procured through the Designed for Life
framework.In January 2009,we won the first Frameworks Scotland hospital project,
a £120m redevelopment of Dumfries and Galloway Royal Infirmary,where we will
provide both architectural design and health planning consultancy for the scheme.
In education,we were confirmed as preferred bidder for the London Borough of
Tower Hamlets BSF programme. We also won contracts with the Oxford Molecular
Pathology Institute and a number of FE colleges. Notwithstanding these successes,
the continuing uncertainty around the funding of capital projects in the FE sector
has led to a decision to reduce our cost base in this area of the business.
We expanded our operation based in Cape Town,South Africa,which is now able
to provide architectural design services to the public sector market in Africa as well
as supporting our UK business.We are progressing a number of opportunities in
southern Africa.
Communications
We are the leading public sector communications consultancy in the UK.We are
on all of the key Central Office of Information frameworks,enabling us to bid for
marketing communications and related consultancy contracts across government.
During the year,we have enhanced our service offering to existing and potential
clients through the acquisition of a leading advertising agency and a new strategic
partnership with a digital agency.These initiatives now enable us to provide our
clients with a comprehensive communications offering.
We have had some early successes for our new integrated proposition,including
a PR and advertising campaign in the food and drink sector and a major
contract with the Department for Innovation,University and Skills to promote
the importance of science.The campaign,Science:So What? – So Everything, was
18. 16 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
launched in January 2009 at an event hosted by the Prime Minister.We have also
continued to grow our work in the education sector and we have leveraged Tribal’s
wider health sector expertise to secure social marketing work on behalf of a range
of primary care trusts.
Resourcing
Our resourcing business performed well and increased its market share,in spite of a
challenging market overall for public sector recruitment.
Many of our public sector clients are continuing to keep tight control of their
recruitment budgets and to make increasing use of online processes.We have
supported this transition to digital media and have also diversified successfully into
new service lines and markets.Our new business performance has been strong
during the period.
Despite the challenging conditions,we have continued to make progress in our
core local government market.In the health market,the level of NHS recruitment
has increased and we have benefited from the Group’s strong presence in this
sector.We have also increased our market share in central government.
Our major wins in the period included contracts with the Association of Greater
Manchester Authorities,the University of Oxford and the Highways Agency.
Our recruitment process outsourcing offering won us work with the Department
for Environment,Food and Rural Affairs,DVLA and two major London boroughs.
In executive resourcing,we won several new contracts including the Royal College
of Midwives,the Legal Services Board,the Big Lottery Fund and the ministries of
Justice and Defence.
People
The year saw considerable organisational change and business challenges for
Tribal’s 2,300 staff and over 1,000 associates.The Group’s delivery of improved
performance during 2008 is a testimony to the hard work and commitment from
everyone across the Group.I would like to thank all of our staff and associates for
their dedication to serving our clients and their loyalty to Tribal and our values.
We have continued to invest in the development of our organisation through a
number of key initiatives.We have realigned our structures so that we have the
right balance of skills and increased efficiency to enable us to better manage
business challenges.We have provided more development activities including
leadership programmes,business development skills workshops and professional
development courses.These initiatives have supported both internal collaboration
and a more customer focused approach.
We have continued to develop the senior leadership team with the appointment of
a chief operating officer and overall leads for our education business and our health
activities.We have also appointed an international development director to lead
our overseas strategy and development.
Chief executive’s statement
19. Tribal Group plc Report and Accounts 2008 17
Business review Governance Financial statements
Prospects
During the past year,we have reorganised our business,made a number of strategic
acquisitions and strengthened our management in order to support our growth
plans.Despite the challenging economic conditions generally,we continue to see
opportunities to grow and develop our business.We started the new financial period
with approximately 38% of planned revenue for the year already committed and total
committed income of £139m.Our identified and qualified sales pipeline stood at
£297m at the start of 2009,compared with £168m at the beginning of 2008.
In 2009,we are continuing to focus on improving our operational performance and
increasing the level of committed income.We are making a significant investment
in raising the quality and effectiveness of our business development processes and
increasing the resources available to our international activities.In certain parts of
the business,we are reducing our cost base and we anticipate that this programme
will realise annualised cost savings of at least £4m.We expect that the costs of
£0.7m associated with our new business initiatives and the £1m costs of our
restructuring programme will be borne primarily in the first half of the year.
Since the start of 2009,we have made good progress in winning places on several
key framework agreements and our committed income levels will increase
significantly following the award of our new Ofsted contract.Despite a tighter
environment in certain of our markets,our new business pipeline remains strong
and the Board remains confident about the Group’s ability to make further progress
in 2009 and beyond.
Peter J Martin
Chief Executive
17 March 2009
“Our sales
pipeline stood
at £297m at the
start of 2009,
compared with
£168m at the
beginning of
2008”
20. 18 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Q
Business review
Strategy
How is Tribal organised?
The Group’s executive team reports to the main Board and comprises the chief
executive,the group finance director,the group HR director and the chief operating
officer.The team is responsible for developing and implementing Tribal’s strategic
direction and for the overall financial and operational performance of the business.
Tribal operates through three business streams which report to the Group’s
executive team:education,consulting and support services.The business streams
are made up of a number of business units,each headed by a managing director
who is responsible for the unit’s individual performance and its contribution to
cross-Tribal collaboration and business development.
What does Tribal do?
We provide a range of consultancy,support and delivery services.Our education
business is involved in a wide spectrum of activities,from high level policy work
and programme management through to the provision of student administration
and support systems,and the delivery of school inspections.Our work in this area
is helping Tribal’s clients to meet the Government’s agenda for better skills,higher
educational standards and improved efficiency.Our consulting business operates
across government,helping our clients respond to the public service reform
agenda,drive through change and deliver better value for money.In support
services,we provide a specialist range of market-leading services that enable
our public sector clients to meet their organisational challenges in areas such as
facilities design,resourcing and communications.
Our principal markets in the UK are education,central government,health,housing
and regeneration and local government.We are also actively increasing our
presence internationally in both the developed and developing world.
What gives Tribal a competitive edge in the marketplace?
We believe that Tribal is able to offer a compelling set of capabilities in its chosen
markets.We are public service specialists and our domain expertise and deep
knowledge of our clients’sphere of activities provides us with a real competitive
advantage.We have a broad service proposition and a strong technology capability
that we are increasingly looking to leverage across all of our key markets.
Tribal provides a range of consultancy, support
and delivery services focused on improving
the delivery of public services in the UK and
internationally. In this section, we answer some
key questions about the Group’s corporate
strategy.
A
Q
A
Q
A
21. Tribal Group plc Report and Accounts 2008 19
Business review Governance Financial statements
Q
All this means we are able to provide unique,integrated solutions which meet the
complex challenges faced by public sector organisations.Tribal seeks to engage
strategically with its clients and to address the key concerns of senior management.
We are also characterised by a genuine commitment to partnership arrangements,
working with our clients to identify and deliver the optimum solution to their
issues,rather than proposing a standard or off the shelf option.
This approach is supported by the feedback we receive from our clients.
What is Tribal’s high level strategy and what progress was made in 2008?
Our corporate mission is to be recognised by strategic decision makers as one of the
leading providers of services in our chosen markets.In the UK,we will focus on our
current markets where we see good opportunities to grow our market share.We will
also be placing greater emphasis on developing our activities internationally.
The Group’s principal financial targets are to deliver significant growth in profits
and earnings by increasing annual revenue and progressively raising our operating
margins.We achieved these objectives in 2008.For at least the next two years,
conditions in the wider economy are likely to remain very challenging and will
inevitably have an impact on public sector spending.We are therefore looking to
build further resilience into our business model through securing larger,longer-term
contracts that increase our future revenue visibility.In order to support this objective,
we are investing significant sums in improving our business development and bid
management processes.
We will also be investing in specific areas to take advantage of emerging
opportunities.In 2008,we established a new health commissioning business that
has already consolidated its position as one of the market leaders.We also made
a number of acquisitions during 2008.However,whilst we remain interested in
businesses that strengthen or complement our existing offering,we expect the pace
of acquisition activity to slow in 2009.
We believe that there is a real opportunity to export our skills and capabilities
overseas.In 2008,we acquired Tribal HELM,which gives us a strong footprint in the
developing world.We have also developed a clear strategy for the developed world
that will centre on the Middle East and Commonwealth countries.
Driving collaboration across the Group remains a major priority.In order to achieve
our objective of increased revenue visibility through winning larger contracts,we
need to harness the breadth of capability that exists across the Group and to build on
and leverage our excellent client relationships.In order to support collaboration,we
have implemented a series of initiatives to facilitate co-operation between different
areas of the Group.
Over the past year,we have also taken a number of steps to strengthen our
management and operating structures.We have made several senior appointments
at Group and business stream level,and reshaped parts of the business so that they
are better aligned with our markets.
We believe that we have a strategy and an organisation that is now well-positioned
to meet the challenges of the next two years and capable of making progress in its
chosen markets.
A
22. 20 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Business review
Our markets
The markets in which Tribal operates are substantial.In July 2008,the Department
for Business Enterprise and Regulatory Reform published a review which placed
a value on the UK public services industry of £79bn.The Office of Government
Commerce estimates the UK public sector consultancy spend to be £2.8bn.
In international consultancy markets,where Tribal HELM is active,the World Bank
spends $1.5bn a year on public sector reform in the developing world and,in 2008,
it was the largest funder of education programmes,spending around £6bn in 88
countries.We therefore believe that there are significant opportunities for us to
grow our market share.
In the UK,our core markets have benefited from significant increases in spending
in recent years and,while general economic conditions have deteriorated markedly,
each of the three main political parties has stated that Tribal’s key markets of
education and health will remain public spending priorities.
The Group anticipates further tightening in overall public spending,particularly
following the next general election.However,Tribal’s business is driven primarily
by change,and we expect public sector reform to remain a government priority
and for there to be continuing demand for services which support improvements
in performance and service quality,reduce costs and deliver better value for money.
Tribal’s deep understanding of its chosen markets,our broad service offering and
technology capability enable us to address the complex social problems faced by
senior public service leaders and their organisations.
In 2008,92% of our revenue was from the UK public sector.Our principal
markets were:education 38%,central government 20%,health 16%,housing and
regeneration 9% and local government 9%.
Our international business has developed significantly during the year,particularly
following the acquisition of HELM Corporation in June 2008,and we expect the
percentage revenue from overseas activities to increase significantly in 2009.
Education
The Government is focused on ensuring that the UK workforce has the right skills to
compete in the global economy.The overall aim is to raise standards in education,
with a particular focus on early intervention to address the underachievement
which has undermined the UK’s international competitive advantage.
The Government has also recognised the importance to the economy of people
who are skilled in science,technology,engineering and mathematics (STEM).
The key areas where education policy and practice have not yet delivered sufficient
improvement are increasingly under the spotlight for intervention and investment.
Tribal operates in the public services industry
and provides a wide range of services which
improve the delivery of public services in the UK
and internationally.
Market proportions
Education 38%
Central government 20%
Health 16%
Housing and
regeneration 9%
Local government 9%
International 4%
Private 4%
23. Tribal Group plc Report and Accounts 2008 21
Business review Governance Financial statements
The performance measures for secondary schools include raising the proportion
of pupils achieving higher grades at GCSE and narrowing the gap between the
highest achieving and the lowest.Schools that are underperforming are targeted
through school improvement initiatives such as the City and National Challenge
programmes.Inspection remains an important driver for improvement and Ofsted
is considering extending its outsourced inspection regime in England and Wales to
include early years settings.
Building Schools for the Future is the Government’s capital investment programme
to rebuild or upgrade schools.The Academies and Trust schools programmes
enable the creation of all-ability state schools that are established and managed by
sponsors with funding from the Government.All of these programmes have been
accelerated over the past year,as the Government seeks to overcome previous
delays in the procurement process.
FE is being restructured,with the transfer of responsibility for services for 14-19
year olds from the LSC to local authorities in 2010.The need for effective student
and institution administration systems across FE,vocational training and the wider
education sector is increasingly important.The market drivers are the need to
demonstrate a more efficient use of resources,the demand for a more personalised
learning experience and more complex timetabling.
Tribal’s education business is aligned with these key policy initiatives and our depth
of sector expertise enables us to provide integrated solutions to meet the complex
needs of our clients.
Central government
There is a broad consensus in government that it should contract externally for
specialist expertise and support.While the use of outsourcing remains under close
scrutiny,the substantial reductions in staff headcount across government mean
that departments and agencies are continuing to draw on the private sector’s
expertise and capability.
In addition,as part of its policy focus on increasing quality and efficiency in the
public sector,the UK Government is increasingly identifying opportunities for its
agencies to move from delivering services to commissioning them from other
providers.
The key drivers for many of our central government clients are the requirement to
cut costs and deliver better value for money,the acquisition of major ICT systems
and the need to improve the efficiency of back office and service delivery functions.
In addition,individual agencies and organisations require support for their
organisational efficiency programmes,such as changes in working practices that
enable staff to focus on areas which are priorities for service users.
Whilst we anticipate the sector will scrutinise the need for external support very
closely over the coming year,Tribal offers the expertise and flexibility required by
central government departments to successfully deliver their complex portfolios
and public service agreement targets.
24. 22 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Business review
Our markets
Health
Health remains a key spending priority for the UK Government,with positive
growth in NHS funding anticipated for the next two years.
There is a renewed drive to improve productivity and investment is being
channelled into initiatives which are expected to transform the NHS by improving
quality and reducing cost.Lord Darzi’s Next Stage Review, published in June 2008,
championed the better use of information in the NHS to improve quality and
efficiency through initiatives such as the National Programme for IT and the use of
electronic patient records.In July 2008,the informatics review endorsed the role of
ICT as an enabler of service improvement.
As well as treating people when they are sick,the NHS has an increasing role in
helping people stay healthy and the wellness policy agenda also encourages
employers to make the link between the health and wellbeing of their workforce
and productivity levels.
Around 80% of the NHS budget is devolved to primary care trusts (PCTs).
The Government’s World Class Commissioning initiative is changing the
delivery model for PCTs,with a shift from PCTs as providers of primary care to
commissioners.Over the past year,all PCTs have been reviewed and many will need
support to meet the world class commissioning standards and deliver better value
for money.Tribal is well-positioned to meet these needs through our
market-leading commissioning service and information and analytics teams.
Drawing on the network of procurement frameworks,government and the NHS are
increasingly looking for suppliers,such as Tribal,that have a multi-disciplinary offer
as well as considerable domain expertise.
Housing and regeneration
The structure of the housing market has changed significantly over the past year.
Two new government bodies have been created,the Homes and Communities
Agency (HCA) and the Tenant Services Authority.
The HCA,established on 1 December 2008,is the new national housing and
regeneration agency for England.It is the biggest regeneration and development
agency in Europe and its vision is to create the opportunity for people to have
homes they can afford in places where they want to live.In December 2008,the
HCA announced plans for the Single Conversation initiative,which aims to establish
a dialogue about housing and regeneration with local authorities in order to
generate new strategies and approaches to local delivery.
The Government’s plans to build affordable new homes have been significantly
impacted by the limited finance available to housing associations and private
sector developers.The regeneration market has also been impacted by the
economic downturn.The reduced availability of traditional bank finance has seen
a number of major regeneration schemes slow down or fundamentally refocus.
The Government has responded by introducing extra public sector funding and
piloting new delivery models that aim to share more of the development risk.
Tribal is the market leader in social housing consultancy and we are reshaping our
regeneration services in response to changes in the market.
25. Tribal Group plc Report and Accounts 2008 23
Business review Governance Financial statements
Local government
The key challenge for local government is to address the ever-increasing
expectations of its customers whilst income streams are declining and there is a
tightening of central government funding.Local authorities are responding by
managing performance more closely,redesigning their organisations and services
to better meet customer needs and achieving greater value for money through
their procurement processes.
Social care services are under intense pressure,with a substantial increase in
demand for services,particularly within adult social care,as well as concerns over
the quality of services in high risk areas such as child protection and safeguarding.
Adult social care is also undergoing a major transformation programme as a result
of the shift towards the personalisation of care.
The government policy of reorganising public bodies is also having an impact
on the local government market.New unitary authorities are being created and,
in some areas,councils and PCTs are merging.Local government is also taking
on significant new responsibilities.For example,it will take over responsibility for
commissioning all services for 14-19 year-olds from the LSC in 2010.
Local government is also seeking to work more effectively with its partners.
This approach is reinforced by the new performance management regime,
Comprehensive Area Assessment,which focuses on the delivery of tangible
improvements in experience and outcomes for local communities.
The local government sector requires support in meeting these challenges and
delivering effective change within its organisations.Tribal’s expertise and
well-established relationships in the sector provide us with the insight and
capability to support our local government clients during this period of change.
International
The global economic crisis has impacted governments across the world.
However,whilst overseas governments are currently reviewing their public
spending plans,three key areas continue to receive substantial investment:
education,health and infrastructure.
The priorities in the education sector in developed markets are focused on
ensuring best value for money through process and administrative reorganisation
and quality benchmarking and improvement.In transitional markets,there is also a
demand for policy development and increasing use of technology.
In healthcare,process and administrative change is needed to reduce waiting lists
and increase functionality in IT,such as patient records.There is also a demand to
develop educational programmes to raise public awareness,for example,in order
to address chronic illnesses.
Many countries also have significant infrastructure investment plans which are
being driven by the need to invest money in the economy and create jobs.
The continued commitments to education,healthcare and infrastructure by
overseas governments in Tribal’s key target markets all provide significant
opportunities.Our expertise in education,health and the built environment,
together with Tribal HELM’s global footprint in aid-funded markets,mean that Tribal
is well-positioned to support overseas governments seeking high value,effective
solutions which will contribute towards national goals and recovery.
26. 24 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Business review
Our people
We have always recognised that our people are
our key strategic asset. We are a professional
services company with a reputation for success
founded on the talent of its people. It is therefore
critical that our staff and associates are
nurtured, developed and managed in a way that
continues to enhance our professional, business
development, commercial and international
expertise in order to protect and strengthen
Tribal’s competitive position.
Tribal’s people all have something in common – a strong commitment to improving
public services and ensuring the best possible use of public funds.They choose to
work for us because they want to be part of a business that has a positive impact
on the lives of communities in the UK and overseas.Our culture is one that seeks to
harness the public sector ethos of service with our high levels of professionalism
and commercial and financial rigour.
Our five corporate values underpin everything we do and how we relate to
colleagues and clients.They are:
passionate about improvement
stronger together
inspiring people
unleashing talent
prepared to be different.
Building and developing our capability
A critical area of focus has been to drive a greater sense of the Tribal ethos and
brand throughout the company.We have extended our senior leadership team
to over 40 members,who work together to address business opportunities and
challenges.Broadening the skills and outlook of the team reduces risk and spreads
the mantle of leadership across a broader management spectrum. In turn,it also
helps to build our cadre of rounded leaders,thereby also playing a part in
our leadership succession planning.This approach recognises that,for skilled
professionals,development is often about the opportunity to tackle new
challenges and to be given exposure to new business areas,rather than attending
traditional training courses.
The opportunity to contribute to Tribal’s approach to business opportunities and
challenges is not limited to our senior team.Throughout the organisation,
cross-business secondments,virtual project teams,mentoring and talent
development programmes have been put in place,and a robust succession
planning process has been established.Additionally,in 2008,we implemented
a programme to increase the proportion of employees with personalised
development plans,which has resulted in nearly 50% of employees now benefiting
“Our people
choose to work
for us because
they want to be
part of a business
that has a positive
impact on the lives
of communities”
27. Tribal Group plc Report and Accounts 2008 25
Business review Governance Financial statements
from formal development programmes.We have also created a comprehensive
electronic library of training resources which includes management best practice
and toolkits.In September,we launched a new programme,Good to Great,
with the aim of enabling our people to take a more focused,strategic and
corporate-wide view of our clients’needs.Over 100 employees have already been
involved in a series of business workshops,which concentrate on developing
strategic selling skills,account management and sales and bid governance
capabilities.The workshops are practical,utilising real client accounts and bid
opportunities as the vehicles for learning.
Engaging people
At Tribal,we know there is more to engaging people than providing development
opportunities,training and career paths.We also believe that engagement is about
more than remuneration and benefits packages.For us,real engagement comes
from creating a close connection with employees that releases discretionary effort:
we want to create a loyalty to the company that makes people want to‘go the
extra mile’,rather than one-way communication from the top of the organisation.
In 2008,we began a new programme which enables people at all levels to find out
more about the strategic direction of the company and participate in sessions that
shape the future direction and focus of their business unit or their community of
professional practice.
As an organisation,we believe that we benefit from a culture of open communication,
where executives are easily accessible.This is exemplified by our chief executive
personally taking part in dialogue with staff across the Group and leading and
encouraging a programme of informal office visits by senior executives and
members of Tribal’s Board.
We are continually working to improve the practical channels of communication
and,in 2008,further developed our intranet and knowledge management
platforms.
Recognising and rewarding our people
Tribal recognises and celebrates exceptional effort and commitment through
our annual employee awards,which are shaped around our business goals and
corporate values.
To help us attract,motivate and retain the best people,we are reviewing our
approach to reward and recognition.In 2008,we commenced a comprehensive
review of all aspects of reward,and began to implement a number of changes to
ensure we are positioned appropriately in the marketplace,whilst delivering value
for our stakeholders.Whilst we plan to complete this first wave of changes in 2009,
it is our expectation that our reward offering will remain an area of focus for future
years,in order to ensure Tribal’s competitiveness.
Our people are demonstrating their clear commitment to the company by their
increased participation in our re-launched Group Save As You Earn (SAYE) scheme,
which saw participation nearly double in 2008.
28. 26 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Business review
Risk management
Risk is an accepted part of doing business.
The challenge for any business is to identify
the principal risks and to develop and monitor
appropriate controls. A successful risk
management process balances risks and rewards
and relies on a sound judgement of their likelihood
and consequences.
Risk management
The Board has overall responsibility for risk management and internal control
within the context of achieving the Group’s objectives.
The Board establishes the overall risk framework and the risk management process
is embedded within the Group by:
setting strategic direction including targets
reviewing and approving annual plans and budgets for the Group and each
business stream
regularly reviewing and monitoring the Group’s performance in relation to risk
through monthly Board reports.
To ensure that risk is robustly managed throughout Tribal,a group risk
management framework operates as part of the annual business planning
and performance management process.This requires each business unit to:
identify and assess all significant risks facing their business
prioritise risk
actively manage by detailing the steps to avoid or to mitigate risk
review and report risk.
The Group maintains a risk framework which contains the key risks faced by
the Group,including their impact and likelihood,as well as the controls and
procedures implemented to mitigate the risks.In April 2008,the Group carried out a
fundamental reappraisal of its key risks,facilitated by an external expert consultant.
The executive directors provide the central leadership to ensure our strategy is
effectively communicated throughout the organisation.This is achieved through
regular meetings of the senior leadership team,annual strategic planning meetings
with individual business units and by clear guidance within the annual budget and
three-year planning instructions issued to all business units.The senior management
of each business unit is specifically responsible for the management of risk within
their operating business.In addition,‘risk owners’have been identified from amongst
the Group’s senior management to take the leadership role in managing certain
risks.We believe the key to success is a combination of strong central direction and
accomplished management talent within our businesses.Our businesses are expert
in understanding customer requirements and market opportunities and adapting
their plans to achieve the best possible performance.
29. Tribal Group plc Report and Accounts 2008 27
Business review Governance Financial statements
Business stream performance is reviewed through regular meetings,enabling
risks or other issues to be efficiently addressed and appropriate actions to be
taken.During 2008,the position of group risk manager was created.Risks are also
assessed and monitored at a Group level at the regular meetings of the Board.
The principal risks that the Group manages are as follows:
1. Changes in government policy and spending
The combination of a sharp slowdown in the UK economy and the
unprecedented government measures taken in response to the financial crisis
and to stave off the threat of deflation is bound to increase pressure on the UK
public finances.
Given the significance of public sector contracts to Tribal,any cut in relevant
public spending or a change in policy away from using independent private
sector providers in advising the public sector and delivering services may have
an adverse effect on the results of the Group.Tribal has consciously made an
effort to protect itself against this risk by establishing a balanced portfolio
of services and,in this respect,we have some advantage over certain of our
competitors.In the year ended 31 December 2008,no customer accounted for
more than 6% of our revenue.
2. Increased competition
Tribal operates in very competitive markets,some with low barriers to entry.
With retrenchment in the private sector,competition for available opportunities
in the public sector environment will increase.The Group is focusing on
maintaining leading positions in its chosen markets and on improving its service
offerings and quality control.
3. Contract win rate
We face a number of risks if we fail to optimise our bid win rate.This is of
particular importance given the complex and involved procurement cycles
for many major public sector contracts.In 2008,the Group engaged in a major
professionalisation programme.This has included the development of a sales
and bid governance policy,with the objective of better qualification of contract
opportunities and more focused management of the bidding and contract
winning processes.These have risk assessments built into them.
4. Financial risks
Balance sheet gearing is the key financial risk.The current and forecast debt level
is very carefully monitored and controlled,to ensure it remains acceptable.
Other financial risks are covered in the Financial review section.
30. 28 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
The Board uses a range of performance
measures to monitor and manage the business.
Each business unit has established its own
performance measures specific to its
business lines.
However,there are a number of KPIs which are applied across the Group.
These Group KPIs fall into two categories:financial metrics that measure past
performance and operational measures that allow us to manage the business in
the future.
On these pages,we set out each KPI and our achievement against the targets in the
year ended 31 December 2008.
Business review
Key performance indicators (KPIs)
Target
Target
Target
Performance
Performance
Performance
KPI definition and target:
Like-for-like annual growth in
organic revenue of a blended
rate of at least 10%.
Performance in
2008: 4%
Status: Not met
Assessment:
Organic revenues for the year ended 31 December 2008
increased by 4%.Whilst the weak current economic climate
and the UK’s fiscal position will slow growth,we remain
confident that a 10% annual revenue growth is sustainable
in the medium-term.
KPI definition and target:
Employed staff labour costs
(and not our pool of associate
staff) as a percentage of
revenue.The medium-term
target is 45%.
Performance in
2008: 45%
Status: Achieved
Assessment:
For the year ended 31 December 2008 labour costs as
a percentage of gross revenue were 45%,in line with
our target.
Organic revenue growth
Labour costs as a percentage of gross revenue
KPI definition and target:
EBITA as a percentage of
revenue.The medium-term
target is over 10%.
Performance in
2008: 8.5%
Status: Not met
Assessment:
We achieved an increase in the operating margin from
8.3% to 8.5% for the year ended 31 December 2008 when
compared with the 12 month period to 31 December 2007.
Adjusted operating profit margin*
4%
10%
45%
45%
10%
8.5%
31. Tribal Group plc Report and Accounts 2008 29
Business review Governance Financial statements
Note:
* The adjusted operating profit margin
and operating cash conversion
are stated in accordance with the
definitions given on pages 31 and 32.
Target
Target
Target
Performance
Performance
Performance
KPI definition and target:
This measures our ability to
turn our operating profit into
cash by dividing EBITA into
cash flow from operating
activities.Our sustainable
target is 90%.
Performance in
2008: 136%
Status: Achieved
Assessment:
We remain a cash generative business and maintain a strong
focus on effective working capital management.
KPI definition and target:
This measures the contracted
work in hand as a proportion
of budgeted revenue at the
start of the financial year.Our
medium-term target is 60%.
Performance in
2008: 38%
Status: On track
Assessment:
Committed revenue was 38% at 31 December 2008
compared to 39% at 31 December 2007 due to certain
longer term contracts coming up for renewal in the first
quarter of 2009.
We expect to increase the visibility of revenue by securing
larger,long-term contracts.
Adjusted operating cash conversion*
Committed revenue
Staff turnover
KPI definition and target:
Staff turnover measures our
ability to retain staff.Our
medium-term target was no
more than 13%.
Performance in
2008: 20%
Status: Not met
Assessment:
Staff turnover has increased from 17% to 20%.This calculation
includes staff who leave as a result of contracts coming to an
end.To be more meaningful,we have decided to redefine the
KPI to cover voluntary staff turnover only.For the year ended
31 December 2008 this was 15.5% and our target going
forward is a maximum of 16.5%.
90%
136%
60%
13%
20%
38%
32. 30 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Tribal had a successful trading year in 2008,
with adjusted profit before tax and adjusted
earnings per share both increasing by over
20% compared to the pro forma 12 months
ended 31 December 2007.
We have also delivered another excellent operating cash performance enabling
us to complete a number of acquisitions in the year from cash reserves and
borrowings.A rising order book and pipeline,plus a healthy balance sheet,provide
a sound financial platform for the Group.
In order to provide a more meaningful analysis,all comparisons are made against
the pro forma 12 month period to 31 December 2007.
Revenue
Revenue increased by 12% to £234.0m (2007:£209.2m).Organic revenue growth
(excluding acquisitions) was 4.2%.Adjusting for the reduction in pass through
agency revenue in our consulting business,the underlying increase is 5.4%.
Profit
Adjusted EBITA increased by 15% to £19.8m (2007:£17.3m).The Group’s operating
margins improved from 8.3% to 8.5%.Our target margin remains over 10% in the
medium-term.
Following the year end change in 2007,the Group’s trading has become more
evenly balanced with revenue and profit split 48% / 52% between the first and
second halves of 2008.
Business review
Financial review
Group trading summary
2008 2007 Increase
£’000 £’000
Revenue 233,990 209,175 12%
Operating profit 19,267 7,965
Amortisation of IFRS 3 intangibles 556 322
Goodwill impairment - 9,000
Adjusted EBITA 19,823 17,287 15%
Net finance costs (1,315) (1,993)
Exclude financial instruments charge 138 88
Adjusted profit before tax 18,646 15,382 21%
Adjusted effective tax rate* 26.8% 28.3%
Adjusted diluted earnings per share* 14.7p 12.2p 20%
Revenue £m
H1 FY
Dec 06 Dec 07 Dec 08
Adjusted EBITA £m
H1 FY
Dec 06 Dec 07 Dec 08
19.8
9.5
17.3
8.6
16.8
10.3
234
113
209
104
194
102
33. Tribal Group plc Report and Accounts 2008 31
Business review Governance Financial statements
Share option charges
We have reviewed the presentation of adjusted earnings and no longer adjust for
share option charges in our adjusted profit measure.Prior period figures have been
amended accordingly.This disclosure treatment brings our reporting in line with
our peer group.The charge,which has been deducted in arriving at adjusted EBITA,
has increased from £0.4m to £0.9m following the issue of new share options under
the LTIP and SAYE schemes during the year.
Goodwill impairment
Following the detailed annual impairment tests,goodwill has not been further
written down at 31 December 2008 (2007:£9m).The growth assumptions made in
assessing the goodwill carrying value reflect our more cautious view of the current
economic environment.
Group finance costs
Net finance costs for the year reduced by 38% to £1.2m (2007:£1.9m),before financial
instrument charges of £0.1m (2007:£0.1m),reflecting the full year effect of the
reduction in Group net debt following the disposal of Mercury Health in April 2007.
Discounting of deferred consideration is a notional charge and mainly relates to
the deferred consideration for the purchase of the remaining minority interest in
Sportsvine (settled in the year) and the acquisition of RSe Consulting,due to be
settled in cash by April 2009.
The financial instrument charge in 2008 is mainly due to the elements of the
interest rate swaps that were not designated as cash flow hedges.The movement
in the fair value of this portion of the instrument is recognised through income
and expense.We increased our debt during 2008 to complete our acquisitions and
the full £25m interest rate swap is now re-designated as a hedge.Whilst this credit/
(charge) could potentially be volatile in line with movements in UK interest rates,the
volatility will not be reflected in the cash flows of the Group,which are determined
by the underlying interest rate of the swap.The volatility introduced to the income
statement as a result of these instruments is not considered to be representative of
the underlying performance of the business,and has therefore been excluded when
calculating adjusted earnings.
The interest rate swaps have saved the Group £0.3m in interest payments during the
year ended 31 December 2008 (nine months ended 31 December 2007:£0.2m).
2008
£’000
2007
£’000
Decrease
Investment revenues (586) (1,431)
Finance costs 1,763 3,336
Net finance costs 1,177 1,905 38%
Discounting of deferred consideration 72 58
1,249 1,963
Financial instruments 66 30
1,315 1,993 34%
Note:
* Before goodwill impairment,amortisation
of IFRS 3 intangibles and financial
instrument charges.
“A rising order
book and pipeline,
plus a healthy
balance sheet,
provide a sound
financial platform
for the Group”
34. 32 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Tax
The Group adopts a proactive approach to managing its tax bill.Due to prior year
tax provisions no longer being required,our effective tax rate based on our adjusted
profit before tax for continuing operations is 27% (2007:28%).The ongoing tax
charge on current year profits is likely to be in line or slightly above the standard rate
of 28% reflecting disallowed expenses and non-qualifying depreciation.
Earnings per share
The basic earnings per share were 14.1p (2007:1.3p).The adjusted diluted earnings
per share before goodwill impairment,intangible asset amortisation and financial
instrument charges,which signals the underlying performance of the Group,has
increased by 20% from 12.2p to 14.7p.
Acquisitions
The principal acquisition during the year was the purchase in June of 72% of the
HELM Corporation (now Tribal HELM) for a total consideration of £16.7m which was
funded by £13.3m of debt and £3.4m of new consideration shares.Tribal HELM is
a leading consultancy 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.Post-acquisition trading has been in line with our expectations.
We completed a further four small acquisitions during the year,the master planning
and urban design team from Llewelyn DaviesYeang,RSe Consulting,Mustoes and
Westhill Consulting,for a combined consideration of £7.9m,which was satisfied by debt.
In addition,we settled the deferred consideration for the minority interest in Sportsvine,
as well as increasing our majority holdings in Avail Consulting andTribalTGC.
The combined acquisitions contributed £15.5m to revenue and £2.6m to operating
profit.
Shareholder returns and dividends
The profit for the year ended 31 December 2008 was £14.4m (2007:£26.2m including
the profit on disposal of Mercury Health of £24.5m).
The Board continues to adopt a progressive dividend policy and has proposed a final
dividend of 2.65p which,together with the interim dividend of 1.7p,gives a total
dividend of 4.35p (2007:annualised dividend of 3.93p).The dividend is covered 3.4
times by adjusted earnings per share.
Retained earnings for the period to equity holders increased by £9.3m.
Cash management
Cash conversion for the year was an excellent 136% (2007:137%).This is defined as
net cash from operating activities from continuing operations before tax (excluding
restricted cash,see note 21) divided by adjusted EBITA.
Operating cash flow,defined as net cash from continuing operating activities less
interest,was £21.4m (2007:£22.4m).
The Group generated free cash flow of £16.3m in the year (2007:£18.4m).
Business review
Financial review
35. Tribal Group plc Report and Accounts 2008 33
Business review Governance Financial statements
The Group’s cash flow for the year to 31 December is shown below:
Tax paid was £3.3m (2007:£0.7m).Cash tax is below the equivalent tax charge
reflecting HMRC repayments for group relief relating to the Mercury Health
disposal and,in 2007,tax refunds relating to over payments in previous periods.
Capital expenditure in the year ended 31 December 2008 was £3.3m (2007:£4.2m),
comprising mainly leasehold improvements and maintaining IT infrastructure,
representing 1.4% of revenue (2007:2.0%).We strive to ensure that our capital
expenditure programme is broadly neutral with the corresponding depreciation
charge in the year.
Dividends paid of £4.4m represent an untypical payment pattern following the
year end change in 2007.The 2008 total is made up of the cost of the interim and
final dividends for the nine months ended 31 December 2007,the interim dividend
for the year ended 31 December 2008,together with dividends paid to minority
shareholders in certain subsidiaries.
Net debt
Group net debt increased from £6.8m at 31 December 2007 to £19.7m at
31 December 2008 as shown below:
Net cash from operating activities
before tax £m
H1 FY
2008 2007
£’000 £’000
Net cash from continuing operating activities before tax 25,649 25,240
Net interest (928) (2,120)
Tax (3,346) (716)
Operating cash flow 21,375 22,404
Net cash from discontinued activities - 2,539
Capital expenditure (net) (3,259) (4,170)
Expenditure on product development (1,851) (2,336)
Free cash flow 16,265 18,437
Disposal of Mercury Health - 36,251
Acquisitions and deferred consideration (24,630) (2,178)
Dividends paid (4,396) (3,396)
Financing 10,671 (53,194)
Decrease in cash and cash equivalents in year (2,090) (4,080)
2008 2007
£’000 £’000
Cash at bank and in hand 13,892 15,982
Collaterised cash - 192
Gross cash 13,892 16,174
Short term loans (662) (876)
Syndicated bank facility (net of bank arrangement fees) (32,894) (22,098)
Finance leases - (3)
Gross debt (33,556) (22,977)
Net debt (19,664) (6,803)
Gearing 10% 4%
Interest cover 16.8 9.1
25.6
23.425.2
17.3
21.1
17.4
Dec 06 Dec 07 Dec 08
Operating cash flow £m
H1 FY
21.420.722.4
15.5
10.610.7
Dec 06 Dec 07 Dec 08
36. 34 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
Included within cash at bank and in hand is restricted cash of £2.0m (2007:£3.2m).
This represents pass-through funds restricted in use by the relevant commercial
terms of specific trading contracts entered into and can be drawn down with 24
hours notice.
The Group has available a £40m senior debt banking facility until 2012.Under the
terms of the facility,£40m is available under a fully fluctuating revolving credit
facility,which can in part be transferred into a performance bond facility
as required.
The Group also has a £6m working capital overdraft facility which will be reviewed
in February 2010.
Our gearing (net debt to equity ratio) at 31 December 2008 was 10% (2007:4%).
Committed revenue
The total forward order book of the Group as at 31 December 2008 was up 12% at
£139m (2007:£124m).Over 38% of planned revenue for 2009 was committed at
31 December 2008.Our medium-term target is to start the financial year with over
60% of revenue committed.
Financial risks and treasury management
The main financial risks faced by the Group relate to the availability of funds to
meet business needs,credit risk arising from customer defaults and fluctuations in
interest rates.These risks are managed as described below.
Funding
The Group finances its operations by a combination of cash reserves from retained
profits,bank borrowings and leases.Our policy is to maintain sufficient headroom
in undrawn committed bank facilities and banking covenants.The Group is
currently funded by a £40m senior debt banking facility until 2012 with two major
UK banks,HBOS and HSBC.
Treasury management is led by the group finance team and operates within
policies and procedures reviewed and approved by the Board.Liquidity matters are
discussed in more detail in the going concern section of the Corporate governance
report.
Business review
Financial review
Committed revenue by segment
Education 57%
Consulting 27%
Support services 16%
37. Tribal Group plc Report and Accounts 2008 35
Business review Governance Financial statements
Credit risk
The objective is to reduce the risk of bad debts arising from non-payment from
our customers.This risk is tightly managed across the Group led by the group
finance team.We incurred no material bad debts (less than 0.1% of revenue) during
the year due to the strong relationships with our predominantly public sector
customers.However,due to the sharp slowdown in the UK economy we have
significantly increased our allowance for doubtful debts.Debtor days outstanding
at 31 December 2008 were 48 days (2007:47 days).
Interest rate risk
Forward rate agreements and interest rate swaps are used to achieve the desired
mix of fixed and floating rate debt.At the year end,the Group held a fixed
interest rate swap of £25m which is a designated hedge.Under the terms of this
arrangement the Group pays 4.99% and receives six month LIBOR until its expiry
date on 30 September 2010.
The Group has also entered into a one-year basis rate swap over £25m which
exchanges six month LIBOR with one month LIBOR less 33bps until September 2009.
The impact of this instrument is to reduce the effective rate of the fixed interest rate
swap from 4.99% to 4.66% for the 12 months ending 30 September 2009.
“The total forward
order book of the
Group was up by
12% at £139m
(2007: £124m)”
38. 36 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
During 2008, Tribal carried out a comprehensive
review of its approach to corporate responsibility,
particularly addressing the strategic context
of this agenda. We have developed a detailed
implementation plan which spans the next eighteen
months, providing focus, guidance and inspiration
for the daily practice of sustainable activities.
In developing the plan,our approach has been to consult senior leaders within
the business and evaluate the best practice in responsible behaviour across the
company.This has enabled us to establish practical objectives which we aim to
achieve in the medium-term.Our leaders are actively committed to the successful
delivery of the sustainability implementation plan,which will make a positive
difference to our business and the wider community.
As a result of our consultation and planning activities,we have decided to focus
our efforts on corporate sustainability.Through our commitment to sustainability,
we can make a demonstrable contribution to social,economic and environmental
sustainability,both nationally and internationally.We will report on our performance
using four new focal points:marketplace,workplace,community and environment.
In 2009,we will deliver a strategic framework,a sustainable procurement policy and
a revised environmental policy.Tribal will take a measured approach to embedding
the principles of sustainable development into its daily work through the support
of our leadership and continuous employee engagement.
The emphasis from the end of the next financial year will be on setting targets for
our activities in this context.We will aim to meet objectives every year,so that we
can demonstrate that our impact on society is positive.
Marketplace
Tribal currently uses a balanced scorecard across the business.This reports on a
number of key performance indicators in four areas:customers,people,processes
and finance.There are also formal client relationship and quality measures in place.
We are able to monitor performance in relation to both key internal and external
stakeholders.
We have set up a number of initiatives,from thought leadership to process
re-engineering projects,in order to ensure continuous improvement in customer
satisfaction and service standards,and also to facilitate cross-Tribal collaboration.
Over the next year,we intend to continue to make a positive difference to our
clients and to position ourselves as a market leader in the professional services
industry.We see the role of market leadership as requiring the promotion of good
governance and good sustainable practice,both within Tribal and our supply chain
and,more generally,in the competitive marketplace.
Business review
Corporate responsibility
“Through our
commitment to
sustainability,
we can make a
demonstrable
contribution to
social, economic
and environmental
sustainability, both
nationally and
internationally”
39. Tribal Group plc Report and Accounts 2008 37
Business review Governance Financial statements
Workplace
In 2008,we continued our significant investment in skills training and management
development programmes.We also focused on ensuring our employees have
personalised development plans.Through these plans,nearly half of our staff
benefited from formal development opportunities,ranging from corporate
programmes such as Unleashing Talent and Managers into Leaders,through to
local,continuous professional development activities.An electronic library of
training resources is also available,including management best practice and
toolkits.This level of focus and investment will continue to increase in 2009.
Tribal recognises that health and safety (HS) is an integral part of good business
practice and it is our duty to safeguard the wellbeing of all employees at work.
We have a continuous programme of audits and fire risk assessments for all offices.
There are trained HS representatives at each of our sites,who carry out monthly
housekeeping audits and are responsible for communicating and acting on any
health and safety issues.Car users are offered driver awareness training.
Tribal’s HS policy was reviewed and updated in June and November 2008,in line
with legislation and company changes.The HS Committee meets quarterly to
review policy and procedures and any other issues arising.
Tribal strives to ensure fairness,diversity,tolerance and health in the workplace,
and we will be strengthening our commitments to them in the next year.We have
also undertaken a full review of reward and recognition,the results of which will be
evaluated early in 2009.
Tribal is a member of Business in the Community (BITC),the key membership
organisation for businesses that seek to make a positive impact on society.One of
our strategic directors leads part of BITC’s Health and Wellbeing initiative,which
seeks to promote the benefits of a healthy workforce to UK boardrooms.We are
delighted with this representation and will be seeking to implement the relevant
guidelines in 2009.
Community
The Tribal Foundation has historically supported sustainable skills development
programmes in Africa and Asia.However,from 2008,part of the Foundation’s funds
has been made available to support charities nominated by Tribal staff,including
those which operate in the UK.
Through our staff payroll giving scheme,employees can make a regular donation
and,as with all money raised by staff for the Foundation,Tribal Group matches
these donations.See page 38 for more information on the Foundation.
Many of our business units promote local volunteering initiatives and,in some
cases,have contributed significant amounts of time and money to charitable
organisations.In the next year,we will implement a process to enable us to capture
and report on all of the good work that Tribal people do in the community.
Environment
As a professional services organisation,Tribal has a limited environmental impact.
However,we recognise our responsibility for preserving the environment.
Our review of corporate responsibility and sustainability has identified the
environment as a key focus for us in the coming years.We will commit to curtailing
inefficient and wasteful practice,where possible,and conduct daily business
activities with the environment in mind.
40. 38 Tribal Group plc Report and Accounts 2008
Business review Governance Financial statements
We recently asked the Carbon Trust to perform an energy survey across four of our
sites and to review the approach we took in calculating our carbon emissions.
We were pleased with the outcome of the efficiency review and,in 2009,we will
start producing a detailed analysis of our carbon emissions.We have also signed up
to Business in the Community’s May Day pledge,a public commitment to taking
action on climate change.
As our core client base is the UK public sector,it is important to Tribal to support
the sector’s sustainable development goals.We will ensure that we set targets for
reducing our carbon emissions and will aim to increase the proportion of office
waste that is recycled.We will also focus on purchasing sustainable office supplies
in 2009.
FTSE4Good
Tribal Group is a member of the FTSE4Good Index Series,the index for companies
which meet globally recognised corporate responsibility standards.
The Tribal Foundation
The Foundation supports projects in the UK and developing world which reflect
Tribal’s expertise in areas such as education and health.Through both financial
support and sharing our skills and knowledge,we aim to make a positive difference
in communities all over the world.The Foundation is a registered charity and is
funded by staff fundraising initiatives,our payroll giving scheme and donations
from the Group’s profits.
Our partner
Our development partner is Skillshare International,a Non-Governmental
Organisation with over 30 years experience in managing sustainable development
programmes in Africa and Asia.Working with Skillshare enables us to have a much
greater impact,as the Foundation’s support attracts significant match funding
from other organisations.In total,the Foundation has donated £193,000 to projects
supported by Skillshare,which has generated around a further £1m in additional
funding from the Department for International Development and the European
Union.Our partnership also ensures our support is effectively targeted and
sustainable,as continuing support is provided by Skillshare’s development workers
in the field.
Our projects
We are currently supporting nine Skillshare projects in Africa and India,including a
programme working with survivors of gender-based violence in Swaziland and an
initiative which aims to improve food supply and provide sustainable livelihoods
for disadvantaged communities in Kenya.
Over the past year,we have increased our focus on UK-based charities and
supported a number of projects which have been nominated by Tribal staff.
These include Country Holidays for Inner City Kids (CHICKS),which provides
respite breaks to disadvantaged children and the Children’s Legal Centre,which
supplies legal advice and representation to children,their carers and professionals
throughout the UK (see case study on page 39).
Business review
Corporate responsibility
41. Business review Governance Financial statements
Tribal Group plc Report and Accounts 2008 39
Staff involvement
Perhaps the Foundation’s greatest resource is the skills,expertise and enthusiasm of
our staff and their desire to make a difference on a more personal level.
Tribal employees have shared their expertise in IT and information management
and provide continuing support through secondments to Lesotho,Botswana and
Swaziland.In October 2008,we raised a total of £80,000 through Tribal’s
company-wide Foundation Fortnight campaign.
In January 2009,our group finance director,Simon Lawton,visited Tribal
Foundation projects in Kenya and Uganda and we are planning a major fundraising
campaign in 2009.
A break from the city
CHICKS provides respite breaks for disadvantaged children, giving them the
opportunity to have some positive time away in an environment that is safe,
supportive and caring.
The Foundation supported Marshmallow camp in September 2008, which
enabled 16 children who would not otherwise have had a holiday to spend a
week at CHICKS’ Moorland Retreat in Dartmoor.
One of the children who attended the camp was 15-year old Erica, who cares
for her disabled and bedbound mother and has recently been subject to
bullying at school. Erica said:
“I love it. It has been one
of the best times of my
life. I’m so glad I had the
opportunity to come.”