Shares in the educational support services provider jumped 9% off the back of today's reassuring update.
Companies: Tribal Group
Tribal Group (LON: TRB) has seen a spike in its share price this after Management issued a positive trading update ahead of its full-year results.
The software and services provider to the education sector has had a successful year with Management commenting:
"Following positive trading momentum, the Board anticipates that Group revenues will be slightly ahead of expectations and the financial performance of the Group will be materially ahead."
The Group has seen a successful turnaround in its bottom line figures after a forgettable 2015, focusing on cost control and with its new organisational structure implemented in 2016 "working effectively". Its new product strategy in the Higher and Further education sectors has also been "well received".
Management expects to have a larger cash balance than the £10m reported in 2016.
Chief Executive Ian Bowles commented:
"I am pleased with the continued progress Tribal is making. Although our end markets face certain challenges, such as Brexit and funding, I remain confident that our team, applications and services will continue to be in demand."
Management expects to report its full-year results in March 2018.
Corporate broker N+1 Singer has subsequently upgraded its forecasts on the Group:
"We have upgraded our 2017 EPS by 11% and also upgraded our 2017 net cash forecast by 10%.
We also put through a 5% EPS upgrade in 2018 and 2019. Management is executing its strategy well and today’s update builds on the positive interim performance reported in September when we also upgraded 2018 and 2019 EPS by 6-9%."
The stock trades at a forecast PE ratio of 24x, a significant premium when compared to the industry median of 13x and has a current Market Cap of £155m.