tribal group plc report and accounts 2006
services for life when tribal group was established in 1999
our vision was to build a business that would
make a difference to the quality and delivery of
public services and through them make a
difference to people’s lives and life chances
today thanks to our 2300 talented and
committed staff we have together created
something of which we can be very proud
and we are truly carrying out our vision every
day we are helping to regenerate communities
raise standards in schools and colleges
improve housing and treat patients in hospital
services that matter to everyone services for life 
contents
01 highlights of the year
02 chairman’s statement
04 chief executive’s statement
14 business review
• our strategy
• our markets
• our people
• risk management and key 
performance indicators
• financial review
• corporate responsibility
30 board of directors
33 directors’ report
34 corporate governance
37 remuneration report
41 statement of directors’ responsibilities
42 independent auditors’ report to the 
members of tribal group plc
43 consolidated financial statements and notes
71 five year summary
72 uk gaap tribal group plc  
company financial statements
80 company information design and production by accrue
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Summary:
 04 tribal group plc   report and accounts 2006
during the year our businesses have continued to
strengthen their service offerings and deliver an
integrated package of services drawn from across
the group this capability alongside our excellent
relationships with public sector organisations
positively differentiates tribal from its competitors  
markets
we continue to operate in expanding markets
and to benefit from increasing government
expenditure particularly in education and health
we now work in sectors that account for over
£275bn of annual government spending  
the main driver for our business continues to be
the expanding role of the private sector in both
advising the public sector and delivering services
on its behalf 
in the year ended 31 march 2006 95 per cent
2005 94 per cent of our revenues were from
the public sector and we expect to retain this
focus in the immediate future we are however
starting to see good opportunities to transfer 
and apply the skills we have developed to the
private sector
operating review
tribal’s businesses now report in three segments
consulting services education and technology
services and healthcare delivery
all divisional operating profit and operating profit
margins are stated before amortisation of ifrs 3
intangibles goodwill impairment share option
charges and exceptional bid costs
consulting services
consulting services is managed through four
divisions consulting resourcing communications
and property 
consulting
consulting achieved good levels of revenue
growth up 14 per cent to £632m 
operating profit was up by 4 per cent but
operating margins were lower compared 
with 2005 
we have now developed into one of the ‘top six’
major consulting practices operating in the public
sector with expertise across health local
government regeneration housing and central
government overall the market for consultancy
remains strong with demand driven by the
government’s efficiency agenda and the
increasing pace and complexity of its reforms 
during the year we delivered a solid performance
across the portfolio with very strong
performances in central government offsetting
lower than planned levels of utilisation in health
housing and local government 
in central government we have recruited some
very high quality consultants into the group
growing numbers from 35 to over 60 
we continue to widen our portfolio of clients with
work won at the ministry of defence
environment agency revenue  customs
forensic science service office for national
statistics department for rural affairs and
several high profile departments within the home
office 
we have made a significant investment in the 
retendering of the office of government
commerce’s ‘catalist’ consultancy framework
formerly scat tribal consortium has now been
awarded a total of 15 ‘catalist’ consultancy
framework agreements by ogc buying solutions
an executive agency of the office of government
commerce in the treasury we have been
awarded more consultancy agreements under
this framework than any other company 
chief executive’s statement
year ended year ended
31 march 2006 31 march 2005
£’000 £’000
revenue 122743 110750
operating profit 15464 16912
operating profit margin 126 153
year ended year ended
31 march 2006 31 march 2005
£’000 £’000
revenue 63242 55238
operating profit 6965 6677
operating profit margin 110 121 top of the class
over the next four years we will inspect 7000 primary secondary and special schools on behalf of the
office for standards in education ofsted more than any other provider in england we have invested
heavily in the provision of training for both our inspectors and schools and in our marketleading regional
web portals a resource for inspectors schools local authorities pupils and parents with ofsted due to
take on more responsibilities including early years and childcare inspection we are well positioned to play
an increasing role in the delivery of inspection services five star treatment
now you choose the date time and place of your first outpatient appointment from a choice of hospitals
or clinics either there and then in the surgery or later on the telephone or internet ‘choose and book’ was
introduced in 2004 and will soon be available to all patients in england it is one of a number of patient
choice initiatives we have been helping the nhs deliver from the planning stage onwards other examples
include the nhs care records service where we continue to work in partnership with the nhs to support
the development of the most ambitious database of patient information anywhere in the world tribal group plc   report and accounts 2006   07
in healthcare utilisation rates have fallen in health
planning and financial management this is in
large part the result of the reorganisation of
strategic health authorities and primary care
trusts which has delayed decision making and
increased uncertainty over the future of pfi
schemes and funding issues generally across the
nhs now that the picture is clearer and pfi
projects are moving ahead we are more
confident about the outlook for these parts of the
business both the informatics and equipping
areas have performed strongly in informatics we
continue to win a number of important contracts
including support to the national programme for
it within the nhs in england and a contract to
support the development of it for the nhs in
wales we have won equipping consultancy
work with west hertfordshire nhs trust and with
several pfi consortia
in local government regeneration and housing
market conditions have overall remained strong
although utilisation rates have been impacted by
the reorganisation of our management
arrangements and investment in additional teams
to service new areas of opportunity during the
year we continued to win a range of consulting
assignments in local government for performance
management capital projects and organisational
learning we have also won a wide range of
economic development and regeneration
projects including a three year contract as the
private sector partner to the boston area
regeneration company further high profile
housing stock transfer assignments across
england scotland and wales and a major long
term programme for administration of grants to
the voluntary sector 
the integration of the division has now been
completed enabling us to provide a strong and
unified brand proposition to the marketplace
coupled with our new operational structure this
will considerably strengthen both our profile and
delivery capability and ensure we offer our
customers a fully integrated portfolio of advisory
and transformational services
the appointment of ian mccagherty as the new
chief executive will further strengthen overall
divisional management and our shared service
arrangements for finance it and hr have 
started to yield savings as well as improve
operational efficiency
resourcing
resourcing increased revenues to £262m up 
6 per cent 
operating profit has fallen by 18 per cent to
£43m and operating margins have fallen by five
percentage points to 163 per cent
this is a satisfactory result in a more difficult
recruitment market our recruitment advertising
business has had a particularly challenging year
during which turnover has fallen despite winning
new contracts worth an annualised £14m 
the nhs market has been particularly weak 
the reorganisation of primary care trusts and
funding deficits in several nhs trusts has resulted
in a 34 per cent fall in our recruitment advertising
volumes with some trusts reducing their spend
by up to 45 per cent in the last quarter of the
financial year advertising volumes have stabilised
and we expect the market in the current year to
be less turbulent
in response to the increasing shift of recruitment
advertising to the internet we have now
increased our investment in our webbased
recruitment products during the year our
recruitment job site for senior management
‘careers for leaders’ moved into profit and since
the year end we have launched a dedicated job
site for head teachers and senior management in
schools we will launch other products in due
course
chief executive’s statement
year ended year ended
31 march 2006 31 march 2005
£’000 £’000
turnover 71296 74297
revenue 26193 24603
operating profit 4276 5231
operating profit margin 163 213 08 tribal group plc   report and accounts 2006
during the year the performances of our
executive and interim search businesses have
been very strong and we have reinforced our
position as one of the leading consultancies in
local government housing and education 
we continue to develop services in other parts 
of the public sector
as in other areas of our business there are now
increasing barriers to entry during the year we
won three preferred supplier contracts with luton
council and the london boroughs of hackney
and lambeth and were awarded framework
contracts with wolverhampton council london
borough of waltham forest nottingham city
council and birmingham city council
looking forward we intend to focus on delivering
an integrated hr offering and on new service
provision such as neutral vendor contracts
where there are opportunities to bid for large
scale contracts to manage temporary and
permanent staffing supply services and work in
partnership with local authorities to reduce
expenditure on staffing overall
communications
communications achieved good levels of revenue
growth up 6 per cent to £106m
during the year operating profit increased by 22
per cent to £29m with margins up to 273 
per cent
the integration of the business has been
successful and we are now able to offer our
customers a comprehensive package of services
we are already seeing the benefits of this
approach 
with £57m of fee income derived from
consumer campaigns we are now the number
one independent agency in pr week’s rankings
for consumer pr and number eight in its 
overall rankings 
we have continued to win high profile new
contracts during the year with the national
lottery promotions unit the department for
education and skills dfes and the department
of trade and industry
framework contracts are becoming increasingly
important we are now on the rosters for the
central office of information the dfes the
department for work and pensions and the
department of health
while we will continue to focus on organic
growth we are in parallel looking at a small
number of acquisitions which will enable us to
strengthen and broaden our proposition 
to customers
property
property achieved good revenue growth up 11
per cent to £236m 
operating profits were down 49 per cent to
£13m with a large fall in margins to 57 per cent
the market for architectural services has been
very strong in education with progressively larger
projects in the further education universities and
schools’ markets during the year we won
contracts with colchester college of further
education and bournemouth university we have
also been successful in the academy
programme where we are now appointed as
project managers and designers on a number of
academies including the arcadia fashion
academy in london
chief executive’s statement
year ended year ended
31 march 2006 31 march 2005
£’000 £’000
revenue 10571 9958
operating profit 2887 2364
operating profit margin 273 237
year ended year ended
31 march 2006 31 march 2005
£’000 £’000
revenue 23603 21331
operating profit 1336 2640
operating profit margin 57 124 tribal group plc   report and accounts 2006   09
in healthcare it has been a difficult year in which
there has been considerable uncertainty over the
future of pfi several large projects have been
delayed resulting in revenue slippage and
impacting margins in 2006 following clarification
of the government’s position we are hopeful that
projects will move forward again and that
margins will improve in 2007 we expect our
consortium to reach financial close on the £220m
peterborough hospital pfi scheme in late 2006
we have been awarded a place as one of three
consortia on the £12bn nhs all wales
‘designed for life’ capital spend framework
contract to be delivered over the next four to six
years working as the architectural partner of
hbg construction 
over the medium term we expect fewer major
acute hospitals to be built as more healthcare is
delivered through primary care and in
independent sector and nhs treatment centres
as a result we are adjusting our focus to reflect
this change during the year significant new work
has been won through the lift primary care
programme we have now reached financial
close on the accrington lift scheme and our
consortia are preferred bidders on various other
schemes we have also designed four
independent sector treatment centres for
mercury health
our architectural business which has an
extensive reach across education and health is
now ranked as the third largest in the uk by the
architect’s journal
our project management surveying and town
planning businesses have had a good year
particularly in education a number of significant
contracts have been won over the period
including herefordshire college and suffolk
college in 20067 we will add capacity to our
property services business by increasing our
project management headcount this will enable
us to strengthen our position in education and
extend our services into other public 
sector markets
the divisional management has been
strengthened by the appointment of simon hall
as the divisional chief executive the shared
service arrangements in finance it and hr will
improve business efficiency and the newly
formed divisional business development function
will help us to market a fully integrated property
service to our clients
our established presence in education and health
means we remain well placed to benefit from the
high levels of capital spend in these markets 
education and technology services
education and technology achieved good levels
of revenue growth up 12 per cent to £792m
operating profit has increased by 26 per cent to
£137m with operating margins increasing to
173 per cent
this has been an outstanding year for the
division with good performances across the
board we are now firmly established as one of
the uk’s leading education businesses offering a
broad range of services to schools local
education authorities further education colleges
the learning and skills council lsc universities
and to the dfes and its agencies
the implementation of our largest education
initiative to date a £50m contract with the office
for standards in education ofsted was
completed to plan and during this financial
period we have inspected a total of 1300
schools over the next few years we expect that
ofsted will assume responsibility for the work of
other inspectorates including the adult learning
inspectorate and for early years’ education and
childcare inspections this will give us the
opportunity to develop further our 
inspection services
year ended year ended
31 march 2006 31 march 2005
£’000 £’000
revenue 79184 70397
operating profit 13735 10893
operating profit margin 173 155 10 tribal group plc   report and accounts 2006
we continue to have considerable success with
our school improvement programme ‘pupils’
champions’ which now provides teacher
support to 51 schools in disadvantaged areas
through contracts with the dfes and local
authorities we have seen some excellent results
90 per cent of schools improved their percentage
of five a to c grades this year
our education consulting and benchmarking
business has continued to develop its services
winning significant new work in further and higher
education we have recently announced an
important contract with the quality improvement
agency qia to provide a national improvement
service to the learning and skills sector we will
identify train support and deploy a network of
around 100 specialist advisers we have also
won a contract to benchmark expenditure in all
further education colleges in wales through
elwa the welsh learning and skills body
during the year we secured an important £15m
contract from the dfes to develop and manage
in partnership with plymouth university the
national centre for excellence in teaching
mathematics this work will be aligned with a
more recent £2m assignment we have also
secured with the qia to provide networks of
subject learning coaches for maths teachers in
post16 education 
our student administration software businesses
in the further education workbased learning
children’s services and university sectors have
had a successful year increasing market share
and launching new products a number of new
contracts have been won including regent
college an independent institution and
doncaster college we have also won a number
of new asset management contracts
we have continued to build on our successful
distance learning and elearning offering since
2001 we have supplied distance learning to over
300000 learners through more than 150 fe
colleges and training providers we have won a
number of important new elearning contracts
many of which involve the development of
industry leading learning technologies such as 
mlearning the delivery of learning through
mobile phones recent contract wins include the
access to employment programme a european
funded project to support access to employment
and career development for minority ethnic
people
the market in teacher and lecturer training
remains difficult however this has been
compensated by several new training contract
wins during the year including a £107m contract
with the lsc to deliver learning to offenders in
prison and during probation since the year end
we have signed a £3m three year contract with
thames valley police to support the training of
probationer police officers 
we continue to develop our information
management capability with a number of new
customers won in the local government and
private sectors
our education and technology business is very
well positioned in the sector we have developed
an extensive range of high value niche education
services e and mlearning information advice
and guidance curriculum design professional
development and distance learning we are able
to offer these to our customers along with other
services from across the group as a bundled
service offering for example by combining
education curriculum advice with property and
architectural advice or education consultancy
with software products the breadth of our
service offering the range of our technical skills
and our indepth knowledge of our markets
increasingly differentiates us from our
competitors 
healthcare delivery  mercury health
chief executive’s statement
year ended year ended
31 march 2006 31 march 2005
£’000 £’000
revenue 14550 349
operating profit 1476 345 345 right skills for the job
if you’re a qualified mathematics teacher you’re in great demand now the dfes is providing further
support through its national centre for excellence in the teaching of mathematics a three year £15m
programme which is being designed and delivered by tribal in partnership with plymouth university to
give teachers from trainees to department heads more confidence and skills in this core subject the
centre will be virtual with a web portal to support professional development and provide a range of
resources including network forums online tests and links to business and commerce  plenty to smile about
the most important fact about our treatment centres is that they help the nhs reduce waiting times
for patients but there are plenty of other benefits “quick and easy and all absolutely spotless 
the staff were very friendly too can’t fault it really” was the verdict from one satisfied customer 
our services which include elective surgery diagnostic testing minor injuries and walkin facilities are
helping to transform the way patients experience the nhs offering them timely and efficient
treatments conveniently located close to their homes and local amenities    tribal group plc   report and accounts 2006   13
chief executive’s statement 
mercury health the group’s healthcare delivery
subsidiary performed strongly with revenue of
£146m and operating profit of £15m after 
bid costs
this has been a very successful first year of
trading for mercury health during which we have
exceeded all our financial and operational
expectations
in december 2004 we signed a £214m contract
with the nhs to design build staff and manage
a regional network of five treatment centres 
we have now opened a diagnostic centre in
wycombe an elective surgery centre in medway
and an elective surgery diagnostic and minor
injuries unit and walkin centre in portsmouth 
all these centres have opened on time and to
budget the fourth and largest centre an elective
orthopaedic facility will open at the end of june
in haywards heath sussex the fifth and
smallest centre in havant is expected to 
open in 2008
to date the clinical performance of the centres has
been excellent and the response from the nhs
and from patients has been very encouraging
last year the secretary of state for health
patricia hewitt announced phase 2 of the
national procurement of independent sector
treatment centres istc the procurement
embraces both diagnostic and elective surgery
capacity and has an overall value of £700m per
annum some £35bn over the five year contract
period mercury health is currently shortlisted on
a number of contracts preferred bidder
announcements are expected later this year
in parallel with developing a diagnostic and
elective surgery business mercury health is also
starting to build a primary care business in
november 2005 we announced that we had
formed two strategic partnerships with
organisations involved in running gp practices 
at the end of last year the department of health
issued the first national procurement in primary
care with six pilot schemes we are pleased to
announce today that mercury health has been
successful in winning a five year contract with
city  hackney pct to operate a gp practice
and walkin centre the contract is strategically
important for mercury health placing us in a
strong position to participate in this emerging
market
there is increasing consensus within the nhs
that the independent sector will play a significant
role in the delivery of healthcare having secured
more than 10 per cent of the first wave of istc
contracts mercury health is well placed to
become one of the largest providers of clinical
services to the nhs 
people
tribal continues to employ and attract some of
the most talented people in our markets 
our headcount has increased through organic
growth by 16 per cent during the year our
success is a result of the high quality of advice
and services that our 2300 employees and over
1000 associates deliver for our customers i
would like to thank them all for their hard work
over the last year and for their contribution to
ensuring tribal is one of the most exciting
businesses to work for in our sector 
prospects
we have developed a comprehensive service
offering and have a very strong position in our
public sector markets our divisional operating
structure is now helping us to deliver improved
operational performance and win contracts which
involve several parts of the group we are in an
excellent position to build on this strong platform
we have also made good progress in developing
mercury health which is well positioned to
become a major healthcare business we believe
that the prospects for the group are
encouraging
henry j pitman
chief executive
20 june 2006