Education software firm Tribal Group surged on Friday after the group unveiled a strong performance in the final quarter of the year, saying adjusted pre-tax profit for 2011 will be 'significantly' ahead of the board's previous expectations.
International demand for the firm's technology products and services has continued to grow, while the benefits of its cost reduction programmes are now embedded across the group.
The technology business traded well during the final quarter of 2011 after changes were made during the second half of the year in its sales.
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Tribal has been appointed as preferred bidder to supply its student management systems to the Student Administration and Learning Management programme currently being implemented by the Department of Education and Communities in New South Wales, Australia.
If successfully concluded this contract is expected to have a value in excess of A$40m over the multiple year contract term.
In a statement the firm said: "Across the group, overheads have remained under tight control, and our cost reduction programme is driving enhancement to our operating margins.
"Whilst mindful of continuing uncertain macro-economic conditions, we now plan to increase investment in our sales and business development capabilities in order that we may take better advantage of existing and emerging opportunities. As a result, our overall expectations for 2012 remain unchanged."
Net debt at the end of December 2011 was £16m (1 January 2011: £19m), while the group's bank facilities total £40m, of which £30m is committed until 2015. Committed income at 31 December 2011 was £178m (31 December 2010: £186m).
Prior to Friday's announcement, market expectations were for the company to make profit before tax of £7.3m for 2011.
Investec analysts James Goodmand and Julian Yates said: "While still early days, strong technology sales and an impressive Q4 out-turn are encouraging signs of gathering sales momentum, in our view, and give confidence in the revised business structure."
The broker maintained its buy rating on the stock today with a 60p target price. Shares on Friday were not too far off that mark, trading up 15.85% at 53p in morning trade.
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