Today’s update discloses that H1 momentum has continued, thanks to further SIS growth and a return to growth in Etio. As a result, FY25e revs are expected to be “comfortably in line” (+1% upgrade), while EBITDA is ahead (+6% upgrade) driven by the top-line outperformance and higher margin revenue mix. Cash meanwhile is the real highlight, as TRB now expects y/e net cash of “no less than £5m” i.e. c.£8m better than expected, implying >£10m FCF. For a company that has historically struggled to translate ARR >> FCF, this represents significant progress and so bodes well for the future. Reinforcing this point, TRB has also announced a 1.5p special dividend. There are no changes to FY26 guidance, but safe to say - we think risk is to the upside, given how the c.14% ARR growth in FY25, provides strong future visibility. While as for valuation, we have TRB trading on 14x (upgraded) FY25 P/E and given this, we continue to see a re-rating opportunity, as the market prices-in TRB’s qualities and potential to deliver healthy and consistent total shareholder returns. We think this potential has become increasingly apparent following this year’s HEFS progress, as TRB is now more embedded within its customers, such providing it greater pricing power and greater ability to sell additional services e.g. Tribal Cloud, which still represents a c.£20m ARR cross-sell opportunity.
