Tribal hit by NHS contract delay

Shares in Tribal Group plummeted to an all-time low of 142.5p yesterday after the company announced what its house broker Dresdner Kleinwort Wasserstein described as a "bitterly disappointing" profits warning.

Shares in Tribal Group plummeted to an all-time low of 142.5p yesterday after the company announced what its house broker Dresdner Kleinwort Wasserstein described as a "bitterly disappointing" profits warning.

The public sector consulting group has grown rapidly in the three years since its flotation, making 40 acquisitions. Some observers believe the company is experiencing growing pains and pointed to the slowdown in acquisitions as evidence.

The City was looking for full-year pre-tax profits of £22.6m, but the company said, as it reported an interim profit before exceptionals of £6.9m, that its full-year profit was more likely to be in the region of £17.5m.

Tribal cited increased costs at its asset management and its teacher training divisions as the reasons for the warning. However, it is more delays in signing the NHS day patient centres contract for which it has been the preferred bidder that seem to have caused most concern.

The chief executive, Henry Pitman, said: "We are now able to aim for organic growth having packaged together our acquisitions, enabling them to bid for large contracts." He denied that his position would come under pressure should the NHS contract fail to materialise, despite being in negotiations for two years. "I am optimistic that the contract will be signed within the next few weeks," Mr Pitman said.

By the close Tribal's shares had recovered to 151p, a fall of more than 10 per cent.