Tribal Group announces rights issue as full year loss widens

Tribal Group announced a rights issue on Wednesday as it reported a wider loss for 2015.

For the year ended 31 December, the group made a statutory pre-tax loss of £47.3m compared to a £6.3m loss in 2014 on the back of impairment charges related to goodwill and capitalised development costs of £46.8m as it restructured operations.

Revenue fell to £106.7m from £123.7m and the company said it experienced a challenging year, with slower sales momentum and major contract changes leading to deferral of significant contract revenues.

Tribal said the board was not recommending a final dividend for 2015 in light of the trading performance during the year.

The company also said on Wednesday that it will raise just under £21m through a fully-underwritten rights issue to reduce debt and provide financial stability to take the business forward. Tribal will issue 94.8m shares at 22p per share.

Chief executive Ian Bowles said: “2015 was a challenging year for Tribal. However, following my recent appointment, I have now had the opportunity to take an early look at the opportunities available to the group. Tribal serves a strong installed software customer base including many leading universities and colleges, and its services are used by high profile institutions and government agencies around the world.

“The proposed rights Issue and disposal of Synergy will significantly strengthen our balance sheet, enabling us to look to the future with confidence. We must now bring greater focus to ensure we deliver value for our customers, enhance our operational efficiency, target our investment programmes to enable our long term success and drive returns for shareholders."

At 1040 GMT, Tribal shares were down 6.6% to 40.50p.