Tigbur Group in the First Quarter: Nursing Margin Improved, Security Waits for Tender Ramp-Up

Tigbur Group opened 2026 with a quarter that sharpens what was already unresolved at the end of 2025: the business is not broken, but earnings quality still depends on two very concrete items, nursing margin and the return of security to a full operating pace. Revenue barely moved, at NIS 358.7 million, but that is too flat a read of the quarter. Staffing and nursing grew 5.9% and improved its operating margin to 4.84%, while security revenue fell 13.9% and its operating profit almost disappeared, reaching only NIS 0.1 million. The company frames the hit to security and accessibility as a temporary war-related event, and part of the evidence supports that framing: new security tenders began operating in the second quarter and the presentation points to a fuller impact in the third quarter. But cash flow has not yet confirmed a clean year: operating cash flow was negative NIS 4.5 million, even after a decline in receivables, and the cash balance rose mainly from short-term deposit redemption and higher short-term bank credit. The National Insurance nursing tender advanced after the appeals were dismissed and the company submitted its bid, but the risk has moved from revenue continuity to how much margin remains under the new tariff structure. The post-balance-sheet allocation to Mor Provident and Pension buys the company more room, but it does not replace the proof that nursing profit remains stable and security returns to meaningful contribution in the coming quarters.

Nursing Held the Quarter, Security Almost Erased the Improvement

Tigbur should be read first through its operating structure. It is a labor-intensive services company with four main layers: staffing and nursing, security and guarding, accessibility, and investment real estate. The presentation describes a nationwide footprint, about 45 branches and around 20 thousand employees on a monthly average, but the first-quarter numbers show that scale alone is not the business advantage. The advantage is the ability to operate large workforces, collect from public and institutional customers, and do that at an operating margin that does not disappear when an external shock hits.

The company's economic machine combines a margin engine and a working-capital engine. Revenue is recurring and relies on public and institutional contracts, but margins are low enough that any movement in wages, tariff, employee availability, or tender start timing can move quickly into operating profit. That is why a quarter with almost unchanged revenue is not necessarily a stable quarter. What matters is where profit was created, whether customers paid on time, and whether growth requires more short-term credit or actually releases cash.

The latest market context in the prepared evidence showed a market cap of about NIS 745 million, with almost no short interest in the share. The debate here is therefore not technical and not driven by a short squeeze or short pressure. It remains highly fundamental: can the company show that nursing is strong enough to absorb a weak security quarter, and is the cash structure wide enough to keep paying dividends when the quarter itself did not generate operating cash?

The important number in the quarter is not the negligible growth in group revenue, but the split between segments. Staffing and nursing generated NIS 252.2 million of revenue, compared with NIS 238.1 million in the parallel quarter, and operating profit rose to NIS 12.2 million. The segment operating margin increased to 4.84%, from 4.37% in the parallel quarter. That matters because this segment accounted for about 70% of group revenue in the quarter.

Security moved in the other direction. Segment revenue fell to NIS 90.6 million, and operating profit dropped from NIS 3.3 million to only NIS 0.1 million. The company links the decline to temporary activity stoppages at certain customers, delayed activation of new tenders, and employees being called up for reserve duty. This is not the usual warning sign of demand deterioration, but it is a reminder of the timing exposure in a labor-intensive business: when enough workers are not available or tenders are delayed, revenue and profit get hit together.

This table explains why gross profit fell 6.5% even though revenue was almost unchanged. Nursing improved, but security and accessibility pulled gross margin down from 7.7% to 7.2% and operating margin from 4.1% to 3.5%. In the next quarter, the market will not need to see only a return to activity. It will need to see the new security tenders turning revenue into profit, not merely refilling the March revenue gap.

The Nursing Tender Advanced, but the Tariff Is Still the Proof Point

The strongest positive in the quarter is that the nursing engine held up better than security during the shock. That matters especially relative to the prior analysis of the nursing tender, where the main risk was not immediate revenue loss but possible margin pressure. The first quarter still does not prove the economics of the new tender, but it does show that the existing activity can improve margin even while the group absorbs an external disruption.

The legal layer also advanced after the balance-sheet date. On April 26, 2026, the Supreme Court dismissed the appeals regarding the National Insurance tender, and on April 29, 2026 the company submitted its bid. The court also noted the National Insurance Institute's right to update the tariff in the future if a need arises. That is the key economic reminder: submitting the bid does not settle the margin question, and the company's own view that the revenue impact is not material depends on being included in the list of winners.

In the presentation, management emphasizes strengthening the nursing core, expanding activity, improving operating efficiency, and potentially acquiring companies in the field. That language fits a proof year, not a breakout year. The company first has to show that the tender does not erode existing profitability. Only then should growth through acquisitions or synergies carry more weight. If segment operating margin remains near first-quarter levels after the tender advances, that would be an important proof point. If revenue keeps rising but margin falls, the tender will again become a quality-of-earnings issue rather than a revenue issue.

Cash Flow Did Not Fund the Story by Itself

The company talks about high liquidity and financial strength, and there is support for that claim: cash and cash equivalents rose to NIS 26.8 million, equity rose to NIS 211.6 million, working capital increased to NIS 92.9 million, and the current ratio reached 1.31. But this quarter requires a clear distinction between liquidity position and operating cash generation.

The relevant frame here is all-in cash flexibility after actual cash uses. Operating cash flow was negative NIS 4.5 million. The company benefited from a NIS 5.6 million decline in receivables, but it also paid a one-time NIS 10.4 million tax payment for prior periods in the security segment after moving to accrual-basis tax reporting, while payables and other credit balances declined. On the investing side, cash received NIS 14.6 million from short-term deposit redemption and paid NIS 1.4 million for property and equipment. On the financing side, short-term bank credit increased by NIS 8.0 million and lease liabilities were repaid by NIS 4.4 million.

The allocation to Mor Provident and Pension changes liquidity after the balance-sheet date. The company issued 567 thousand shares at NIS 64.34 per share, alongside 396.9 thousand non-tradable warrants with an exercise price of NIS 84.44. In simple terms, that is a new equity layer of about NIS 36.5 million before any warrant impact. It reduces immediate pressure and improves the company's ability to pass through a weak security quarter, but it is not operational proof. The proof will come if security returns to profit, nursing preserves margin, and the company can pay dividends without increasing dependence on short-term credit or deposit releases again.

Conclusions

Tigbur's first quarter is less weak than the total profit line suggests, but less strong than a clean "temporary war disruption" frame may imply. Staffing and nursing delivered good one-quarter evidence: growth, margin improvement, and resilience during a shock. Security showed the other side of the business, with a sharp hit to revenue and profit when labor availability and timing break down. That makes the second and third quarters especially important: they should show whether the new security tenders really restore a reasonable margin.

The current conclusion is that Tigbur bought itself time and liquidity, but has not yet proven that Q1 was only a temporary disruption. Progress in the nursing tender removes part of the legal uncertainty, but leaves the economic question of tariff and profitability. The counter-thesis is that the company exits this quarter quickly: nursing is strong, security returns to full activity, the Mor equity injection increases flexibility, and the dividend signals confidence. For that thesis to hold, the coming reports need to show three simple things: security profitability recovering, nursing margin not eroding after the tender advances, and operating cash flow funding actual uses without another jump in short-term credit.