We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Learning Technologies Group Plc | LSE:LTG | London | Ordinary Share | GB00B4T7HX10 | ORD 0.375P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.10 | 1.30% | 85.40 | 85.60 | 85.95 | 86.25 | 82.80 | 84.30 | 968,489 | 16:35:22 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Real Estate Agents & Mgrs | 596.9M | 30.41M | 0.0384 | 22.29 | 677.23M |
TIDMLTG
RNS Number : 3810M
Learning Technologies Group PLC
21 September 2021
Learning Technologies Group plc
HALF YEAR RESULTS 2021
7% organic revenue growth; delivering on strategy
In line with expectations for full year performance
Learning Technologies Group plc ("LTG" or the "Company"), the provider of services and technologies for digital learning and talent management, announces half year results for the six months ended 30 June 2021.
Strategic highlights
-- Successful integration of Q1 acquisitions Reflektive, PDT Global and Bridge
o Refle ktive and Bridge swiftly moved to profit
o PDT Global achieving high margins and complements LTG's D&I solutions offering
-- Software & Platforms: functionality enhanced and go-to-market strategy embedded
-- Announcement in July 2021 of proposed acquisition of GP Strategies for $394 million; will create a global business with more than 5,000 employees and proforma revenues of c.GBP500m
o The strategically compelling combination will create a leading, global workforce transformation business focused on learning and talent management
o LTG has identified significant margin enhancement potential and cross-sell opportunities and expects the
transaction to be significantly EPS accretive from 2022
Financial highlights
-- Revenue up 29% to GBP82.6m (H1 2020: GBP64.1m) including first time contributions from Reflektive, PDT Global and Bridge
-- Organic revenue growth* rate of 7% includes strong recovery in professional services
o Software & Platforms : 5% organic growth; particularly strong growth at Rustici and Breezy
o Content & Services : 14% organic growth; on track to return to 2019 levels as expected
-- Recurring revenues at 77% (H1 2020: 81%) as C&S revenues recover -- Adjusted EBIT increased 20% to GBP22.0m (H1 2020: GBP18.4m)
-- EBIT margin down to 26.7% (H1 2020: 28.7%) primarily due to currency headwinds and short-term losses from Reflektive and Bridge following acquisition in Q1 2021; expect to return to guided margin levels for FY 2021
-- Operating cash conversion at 79% (H1 2020: 100%; FY 2020: 85%)
-- Net cash of GBP24.9 million (FY 2020 GBP70.2 million) after deployment of GBP52.1 million for the three acquisitions made during the first half
Dividend
-- The Board is committed to a progressive dividend policy and is pleased to approve an interim dividend of 0.30 pence per share (H1 2020 0.25 pence per share) representing a 20% increase.
-- Interim dividend will be paid on 29(th) October 2021 to all shareholders on the register as at 8(th) October 2021.
Current trading and outlook
-- Good start to second half reflecting strong order book growth during the first half -- Content & Services on track to return to 2019 revenue levels for the full year
-- Robust organic and acquired growth across Software & Platforms division; market offering positioned to leverage opportunities in the small and mid-market sectors
-- Acquisition of GP Strategies on track to complete in Q4 2021, funded by the GBP85m equity placing and $305m debt refinancing completed in July 2021
-- LTG remains on target to deliver on market expectations for the full year despite continuing currency headwinds
Jonathan Satchell, CEO of LTG, said:
"LTG's swift return to organic revenue growth reflects a strong and well-integrated business with class-leading multi-product solutions for the growing global learning and talent management market. Delivering 7% organic revenue growth has been an exceptional achievement by our employees who have adapted well to an evolving and more flexible working environment.
Following this excellent first half performance, including the integration of our three most recent acquisitions, we are excited about the potential to generate further substantial shareholder value from the addition of GP Strategies, which is expected to complete in Q4 2021. The enlarged business provides a platform for further organic growth in a marketplace that is increasingly receptive to solutions that help organisations efficiently recruit, train, motivate and retain their people."
Financial summary:
GBPm unless otherwise stated H1 2021 H1 2020 Change -------------------------------------- Revenue 82.6 64.1 +29% -------- -------- ------- Organic growth* 7% -7% -------- -------- ------- Software & Platforms organic growth 5% -1% -------- -------- ------- Content & Services organic growth 1 4% -20% -------- -------- ------- Recurring Revenue 77% 81% -------- -------- ------- Adjusted EBIT 22.0 18.4 +20% -------- -------- ------- Adjusted EBIT margin 26.7% 28.7% -------- -------- ------- Statutory PBT 4.6 4.1 +11% -------- -------- ------- Basic EPS (pence) 0.705 0.710 -1% -------- -------- ------- Adj. Diluted EPS (pence) 2.310 2.251 +3% -------- -------- ------- Net Cash 24.9 77.8 -------- -------- -------
* Organic growth is stated on a constant currency basis and excludes 2021 acquisitions Reflektive, PDT Global and Bridge. It includes acquisitions made in 2020 restated as if they had been owned for the full comparative period.
Analyst and investor presentation:
LTG will host an analyst and investor webcast at 09:00 today, Tuesday 21 September 2021.
The registration link can be found here:
https://attendee.gotowebinar.com/register/853539199442689035
Telephone audio is available +44 20 3713 5012 or via international dial-in:
https://attendee.gotowebinar.com/audio/853539199442689035
Webinar ID: 626-546-723
Enquiries :
Learning Technologies Group plc Jonathan Satchell, Chief Executive +44 (0)20 7402 Neil Elton, Chief Financial Officer 1554 Numis Securities Limited (NOMAD and Corporate Broker) +44 (0)20 7260 Stuart Skinner, Nick Westlake, Ben Stoop 1000 Goldman Sachs International (Joint Corporate Broker) +44 (0)20 7774 Bertie Whitehead, Adam Laikin 1000 FTI Consulting (Public Relations Adviser) +44 (0)20 3727 Rob Mindell, Jamie Ricketts, Jamille Smith 1000
About LTG:
LTG is a leader in the growing workplace digital learning and talent management market. The Group offers end-to-end learning and talent solutions ranging from strategic consultancy, through a range of content and platform solutions to analytical insights that enable corporate and government clients to close the gap between current and future workforce capability.
LTG is listed on the London Stock Exchange's Alternative Investment Market (LTG.L) and headquartered in London. The Group has offices in Europe, North America, LATAM and Asia-Pacific.
Chairman's Statement
Introduction
The Board is delighted to report that Learning Technologies Group plc ('LTG') has delivered a robust performance in the first half of 2021, in line with management expectations at the start of the year, and against a backdrop of significant currency headwinds. As expected, our Content & Services division has bounced back strongly as, following the upheaval created by COVID-19, clients restarted postponed projects and reassessed how to deliver effective workforce transformation solutions in a more digital, flexible and fast-paced corporate environment. Our Software & Platforms division has also demonstrated robust growth and has been substantially augmented through a number of strategic bolt-on acquisitions over the past year.
The COVID-19 pandemic has accelerated the trends that we have witnessed for several years and it is these trends that define our strategy. Demand for workforce transformation solutions is growing as organisations increasingly see themselves not only as profit generators, but as developers of talent and creators of meaningful and rewarding careers. Recruiting, developing and retaining employees is now understood to be a more effective and profitable way of growing than to 'buy-in' skills that have been learned elsewhere. By developing their own talent, organisations are finding more effective and profitable ways to create winning and sustainable cultures.
LTG has combined solid organic revenue growth with a number of strategic acquisitions. In 2020 we completed five acquisitions, most notably the integration of three businesses to form Open LMS, creating the global leader in the open-source Moodle(TM) market. In the first quarter of 2021 we acquired Bridge and Reflektive, two strategically important SaaS-based talent platforms, and PDT Global, a specialist D&I consultancy that complements our Affirmity business. The combined cash outflow (net of cash acquired) for these first half acquisitions was GBP52.1 million. All three businesses are performing well and generating profits, although margins at Bridge and Reflektive are currently below the Group average and expected to improve by the year end.
In July, LTG announced the proposed acquisition of GP Strategies, a leading provider of managed learning services and workforce transformation, for $394 million. The strategically compelling combination will create a leading global workforce transformation business focused on learning and talent. LTG has identified significant margin enhancement and cross-sell opportunities, with the proposed transaction expected to be significantly EPS
accretive in the first year following completion.
Results
In the six months ended 30(th) June 2021, revenues increased by 28.9% to GBP82.6 million (H1 2020: GBP64.1 million) reflecting the contribution from acquired business and like-for-like constant currency organic growth of c.7% compared with a decline of c.8% in 2020.
Revenue in Software & Platforms increased 26% to GBP60.9 million (H1 2020: GBP48.5 million) with the division now representing 74% of overall revenue. On a like-for-like constant currency basis the Software & Platforms division grew by c.5% (2020: 0%) with large increases from Rustici and Breezy in particular, offset as expected, by a decline in PeopleFluent where COVID-19 has delayed large enterprise procurement processes. Acquired businesses including Open LMS and Bridge made a substantial contribution to the year-on-year increase and are both demonstrating strong top line growth.
Revenue in Content & Services ('C&S') increased 39% to GBP21.6 million (H1 2020: GBP15.6 million) with the division now accounting for 26% of overall revenue. On a like-for-like constant currency basis the Content & Services division grew by c. 14% (2020: -24%). This strong recovery has been led by LEO and we expect to see this continue into the second half of the year. PRELOADED's sales recovery started in Q2 and has accelerated in the last few months which we expect will result in a very strong H2 performance. C&S is firmly underpinned by a strong order book and sales pipeline which shows no signs of diminishing.
Recurring revenues as a proportion of total revenue reduced from 81% in H1 2020 to 77% in the first half of 2021, reflecting the strong growth seen in Content & Services, partly offset by the change in business mix due to the predominantly SaaS businesses acquired over the past 12 months.
Adjusted EBIT(1) increased 19.8% to GBP22.0 million (H1 2020: GBP18.4 million). The resulting EBIT margin of 26.7% was down from 28.7% in H1 2020, driven primarily by currency headwinds. Software & Platforms margins reduced from 31.5% in H1 2020 to 26.7% in H1 2021. This was partly due to the temporary impact of the post-acquisition contributions from Reflektive and Bridge which have both been rapidly turned to profit following their integration; these businesses will deliver improved margins in the second half of the year. The three businesses comprising Open LMS acquired during 2020 also deliver lower margins than other parts of the Software & Platforms division and this has changed the margin mix. It is anticipated that underlying margins will improve over the medium term as the division sees the benefits of operational leverage.
Adjusted EBIT margins have increased substantially in the Content & Services division from 19.7% in H1 2020 to 26.4% in the first half of 2021. This is primarily as a result of improved margins in the LEO business as well as the incorporation of the higher margin PDT Global business into the Group.
Group reported operating profit of GBP5.1 million (H1 2020: GBP5.1 million) is stated after amortisation of acquired intangibles, various acquisition earn-out charges, and acquisition transaction and integration costs. Amortisation of acquired intangibles increased to GBP11.7 million (H1 2020: GBP10.9 million). Acquisition transaction costs increased to GBP1.6 million (H1 2020: GBP0.4 million) and integration costs to GBP0.9 million (H1 2020: GBP0.2 million) and were primarily related to the first quarter acquisitions of Reflektive, PDT Global and Bridge. The acquisition related contingent consideration charge increased from GBP0.9 million in H1 2020 to GBP2.4 million. Contingent consideration arrangements are in place for Breezy, eThink, eCreators and PDT and are all contingent on challenging incremental revenue growth targets. There were no net foreign exchange gains or losses arising as a result of business acquisitions during the period (H1 2020: GBP1.1 million).
Finance expenses of GBP0.5 million (H1 2020: GBP0.9 million) include interest on borrowings of GBP0.3 million (H1 2020: GBP0.6 million) and GBP0.2 million (H1 2020: GBP0.2 million) relating to the Group's leases under IFRS 16.
The Group reported a profit before tax of GBP4.6 million for the six months ended 30th June 2021 (H1 2020: GBP4.1 million). The tax credit of GBP0.6 million (H1 2020: tax credit of GBP0.8 million) primarily results from taxes on UK and international profits, offset by the anticipated utilisation of brought forward tax losses and the change in the UK deferred tax rate from 19 to 25 per cent (see Note 5.)
Basic earnings per share in H1 2021 was 0.705 pence (H1 2020: 0.710 pence). Adjusted diluted earnings per share as set out in Note 9 was 3% up on the prior year at 2.310 pence (H1 2020: 2.251 pence) reflecting the strong growth in underlying earnings offset by an increase in the effective tax rate, the impact of the May 2020 share placing and the potential dilutive impact of share options.
Gross cash of GBP39.3 million and net cash(1) of GBP24.9 million at 30(th) June 2021 compares with gross cash of GBP88.6 million and net cash of GBP70.2 million at 31(st) December 2020. LTG continued to show good operating cash conversion of 79% (H1 2020: 100%; FY 2020: 85%). Net interest payments reduced from GBP0.8 million to GBP0.2 million and tax payments increased to GBP4.3 million (H1 2020: GBP1.8 million). Net cash outflows due to the acquisition of subsidiaries of GBP52.1 million (H1 2020: GBP22.5 million) relate to the acquisition of Bridge, Reflektive and PDT Global. Spend on development of intangible assets increased from GBP3.1 million to GBP3.6 million.
At 30(th) June LTG had a debt facility with Silicon Valley Bank ('SVB') and Barclays Bank for $63.0 million. The facility comprised a $42.0 million term loan and a committed $21.0 million revolving credit facility ('RCF') available for five years. As part of the refinancing for the proposed acquisition of GP Strategies the loan facility was settled in full on 13 July 2021. It has been replaced by a new debt facility with SVB, Barclays Bank, HSBC, Fifth Third Bank and the Bank of Ireland. This new facility comprises a term loan for $265.0 million, a bridging facility for $40.0 million and a $50.0 million committed RCF. At this date the facilities remain undrawn.
Net assets increased to GBP271.8 million at 30th June 2021 (31st December 2020: GBP269.1 million) and shareholders' funds(1) increased from 36.4 pence per share to 36.6 pence per share.
(1) Denotes first instance of an Alternative Performance Measure (APM) term defined and explained in the Glossary
Operational Review
Software & Platforms
The Software & Platforms division comprises SaaS and on-premise licenced product solutions as well as hosting, support and maintenance services. The acquisition of Bridge in Q1 now enables LTG to address the three main segments in the talent development market.
PeopleFluent provides connectable, fully customisable talent development products for the complex organisational needs of large enterprises.
Our new offering, Bridge, is an employee-focused talent development platform. This modern and popular learning and talent management suite operates in the high growth, mid-market segment of the market but also has potential, we believe, to move into certain sectors of the enterprise market.
Breezy provides the largely self-service, out-of-the-box capabilities demanded at the smaller company end of the market and is currently focused on the talent acquisition market.
Other proprietary products such as Reflektive (performance management), Gomo (authoring), Instilled (learning experience platform - LXP) and Watershed (analytics) have been or will be integrated as appropriate with each of the above main market solutions. They also operate as stand-alone products or can be integrated with third party solutions.
Open LMS, eCreators and eThink (together 'Open LMS'), all acquired during 2020, have given LTG a large-scale capability in the open-source Moodle(TM) market. Already with a strong position in the education and government sectors, during the first half of 2021 Open LMS has successfully grown the proportion of corporate clients and has worked alongside other LTG businesses including LEO and Watershed and integrated Instilled into its solutions.
The Software & Platforms division also comprises VectorVMS, a contractor management product and Rustici, the leading global expert in e-learning interoperability software.
Content & Services
The primary business in the Content & Services division is LEO, the Group's innovative digital learning specialist which delivers organisational transformation through world-class consultancy and strategic learning blend design, and creative content generation. As expected LEO has seen strong demand throughout the second half of 2020 and into 2021 as corporates reassess their requirements for digital and blended learning solutions as the trend towards flexible and remote workforces accelerates and the competence of extended enterprises becomes ever more critical.
PRELOADED, LTG's highly regarded games studio, has seen a slower start to the year but sales have picked up markedly towards the end of Q2 and into Q3. In the first half of the year the PRELOADED management team joined LEO and both businesses are now working ever more closely and successfully to bring blended learning and gamified solutions to their clients.
PDT Global is a leading provider of D&I training solutions, acquired in February. It is now working alongside Affirmity, LTG's existing affirmative action provider, enabling clients to objectively measure and track their D&I performance and then implement the tools, processes and actions to make appropriate changes. Both businesses have demonstrated substantial growth during the first half of the year.
Acquisitions
LTG acquired Reflektive, Bridge and PDT Global in the first half of 2021. All businesses have been successfully integrated and Reflektive and Bridge, which were substantially loss making prior to acquisition have been quickly turned to profit. Further details of the acquisitions are provided in Note 16.
Strategic update and proposed acquisition of GP Strategies
Our purpose is to help companies keep up with changing workforce requirements. We aim to ensure that organisations hire the best people, put them in the right roles, develop the appropriate skills, and then retain their employees so that winning cultures can first be created and then nurtured.
The accelerating pace of change required from all organisations is causing re-skilling demands that cannot be met through recruitment alone. Organisations are realising that they need to become learning enablers, achieved through a combination of learning provision, performance measurement and talent management. This will help them to create the motivational and productive learning environments that they require to maximise employee satisfaction, enjoyment, and performance so that they remain competitive and relevant. LTG is rapidly building a global business to satisfy this growing demand by helping customers to develop their workforces at scale through integration, customisation, and contextualisation. Management believes such workforce transformation can only be achieved through a unique combination of front-end consulting, deep organisational integration, cross-border communication and the application of technology to create complete and embedded solutions.
LTG seeks to achieve these objectives through a combination of organic growth and strategic acquisitions.
On 15th July LTG announced the proposed acquisition of GP Strategies, a global provider of workforce performance solutions, for $394 million. The acquisition of GP Strategies will create the world's largest specialist workforce transformation business, focused entirely on workforce learning and development. LTG shares a vision with GP Strategies that to deliver the integration, customisation and contextualisation needed to develop workforces efficiently and effectively, a special type of offering is required. We believe that to develop effective learning organisations that will thrive in today's business environment, we must provide a unique blend of sector-specific technology and services expertise that is intermeshed with products to produce insights across complex businesses and sectors, and a range of skills and experience that can enhance the customer journey.
GP Strategies' strengths include long-standing client relationships, recurring multi-year revenues with high customer satisfaction, deep industry expertise, global market presence and a proven process for cross-selling. The acquisition will provide a platform for continued organic growth aided by strength in the APAC market, deep client relationships with established account management to enable cross-selling of LTG solutions, and specialist expertise in technology, automotive and finance sectors. GP Strategies also brings significant offshoring capabilities and vendor management services that create vertical integration opportunities for LTG's existing products and services. LTG is bringing together some of the brightest talents in the industry in order to deliver the tools and solutions that can help our customers build the workforce capabilities that they require to prosper.
The acquisition of GP Strategies represents a transformational leap in the creation of the complete solution that we envisage incorporating - a combination of award-winning technology, leading talent development skills and a global delivery capability. This will help our customers become the 'learning organisations' that they need to be to drive up productivity and profitability in a world of increasing complexity and rapid change, including people's changing relationship with the workplace.
The combined business will generate pro-forma revenue of c.GBP500 million, operate in more than 80 countries and, with over 5,000 employees, will give LTG a truly global presence. We have identified significant margin enhancement and cross-sell opportunities and may consider divesting some non-core assets. The transaction will be financed by an GBP85 million share placing and $305 million of debt financing, both completed in mid-July. The Company has converted GBP80 million of the placing proceeds into US Dollars at an effective rate of 1.38 and does not anticipate drawing down on the debt facility until the transaction closes. Debt leverage is anticipated to peak at c1.7x before dropping to less than 1.0x by the end of 2022. Completion of the acquisition is expected to take place in Q4 2021, and is subject to regulatory and GP Strategies' shareholder approval.
An extensive and forensic research effort has been ongoing over recent months with the assistance of GP Strategies' management. Findings to date support LTG's thesis regarding the level of margin improvement that can be achieved. Additionally, there are positive indications that further upside can be delivered thereafter as improved sales and delivery methodologies are embedded and onerous long-term contracts with external vendors come to an end. The transaction is expected to be significantly earnings enhancing from 2022.
The Group will continue to selectively evaluate a limited number of additional bolt-on acquisition opportunities as the year progresses.
Corporate Governance
During 2020, LTG further enhanced its ESG initiatives and reported more fully on measures in place. We have continued on this journey during the first half of 2021 but more importantly, we are empowering our customers to achieve their own ESG priorities. As a business that helps companies to manage and develop their human capital, our technology and services are helping to directly improve the talent development of more than 200 million people around the world.
Our staff have shown incredible dedication and professionalism over the past 18 months as they have worked from home. With appropriate support from management, we have demonstrated that we are able to deliver effectively for our clients and care for our people. As part of a new policy that will continue after the impact of COVID-19 we have embraced a flexible working environment, combining face-to-face activities where it is appropriate and required, but also empowering our staff as much as possible to decide whether they wish to work from home or the office.
Dividend
The Board is committed to a progressive dividend policy. On 25 June 2021, the Company paid a final dividend of 0.50 pence per share, giving a total dividend for 2020 of 0.75 pence per share, in line with the prior year. Given its confidence in the continuing success of the Group, the Board is pleased to announce it has approved an interim dividend of 0.30 pence per share (2020: 0.25 pence per share), representing a 20% increase. This dividend will be paid on 29th October 2021 to all shareholders on the register as at 8th October 2021.
Current trading and outlook
We are making solid progress in our ambition to serve small, mid-size and enterprise tier clients with our targeted, multi-product solutions. We are excited by opportunities to enhance our global offering through the successful integration of GP Strategies. The appreciation by corporates of the necessity, appropriateness and effectiveness of digital learning and talent management solutions will, in the Board's view, continue to drive demand for our solutions and lead to continued strong levels of performance in the second half of 2021.
At the time of the share placing in May 2020, LTG announced a new strategic financial objective to achieve run-rate revenues of circa GBP230 million and run-rate adjusted EBIT of circa GBP66 million by the end of 2022 through a combination of organic growth, strategic bolt-on acquisitions and with no further dilution to shareholders. The Board has successfully executed that plan over the past year. In addition to this the transformational acquisition of GP Strategies will propel the Group well past the 2022 financial targets by the end of 2021. The Board will review the progress of the GP Strategies acquisition and will report to shareholders on renewed strategic financial objectives later in 2022.
The Board is delighted with the strong organic revenue growth delivered during the first half of the year, the Group's resilient recovery from the impact of the COVID-19 pandemic and the successful integration of our most recent acquisitions. We have created a strong base, capable of meaningful rates of organic revenue growth whilst delivering industry-leading profit margins and cash generation, which will enable us to realise the significant opportunities that we believe lie ahead in the second half year and beyond. We are confident that we can continue to profitably build on these strong foundations as we remain on target, despite currency headwinds, to deliver on market expectations for the full year.
Andrew Brode
Chairman
21 September 2021
Consolidated statement of comprehensive income Six months Six months to to Year to 30 June 2021 30 June 2020 31 Dec 2020 Note GBP'000 GBP'000 GBP'000 Revenue 4 82,573 64,082 132,324 Operating expenses (75,420) (57,207) (114,130) Share based payment charge (2,090) (1,815) (3,340) -------------- --------------- ------------- Operating profit 5,063 5,060 14,854 Adjusted EBIT 22,037 18,397 40,348 Adjusting items included in Operating profit 6 (16,974) (13,337) (25,494) Operating profit 5,063 5,060 14,854 ------------------------------------- ----- -------------- --------------- Net finance expenses 7 (454) (924) (1,385) -------------- --------------- ------------- Profit before taxation 4,609 4,136 13,469 Income tax credit/(expense) 5 613 780 3,935 Profit for the period/year 5,222 4,916 17,404 Other comprehensive income: Exchange differences on translating foreign operations (4,616) 9,843 (6,616) -------------- --------------- ------------- Total comprehensive profit for the period 606 14,759 10,788 ============== =============== ============= Earnings per share Basic, (pence) 9 0.705 0.710 2.450 Diluted, (pence) 9 0.688 0.696 2.382 Adjusted earnings per share Basic, (pence) 9 2.367 2.295 4.417 Diluted, (pence) 9 2.310 2.251 4.294 ------------------------------------- ----- -------------- --------------- ------------- Consolidated statement of financial position 30 June 2021 30 June 2020 31 Dec 2020 Note GBP'000 GBP'000 GBP'000 (Restated) NON-CURRENT ASSETS Property, plant and equipment 903 1,366 1,025 Right of use assets 11 7,013 10,470 8,806 Intangible assets 10 313,044 262,599 256,284 Deferred tax assets 9,894 4,000 7,614 Other receivables, deposits and prepayments - - 76 Amounts recoverable on contracts 849 759 624 ---------- ------------------ ------------ 331,703 279,194 274,429 CURRENT ASSETS Trade receivables 36,457 22,450 32,984 Other receivables, deposits and prepayments 12 7,395 4,177 4,219 Amounts recoverable on contracts 8,788 3,917 3,879 Amounts due from related parties - - 54 Cash and cash equivalents 13 39,322 68,045 88,614 Short-term deposits 13 - 30,000 - Restricted cash balances 13 1,567 602 682 93,529 129,191 130,432 TOTAL ASSETS 425,232 408,385 404,861 ---------- ------------------ ------------ CURRENT LIABILITIES Lease liabilities 15 3,774 2,804 2,536 Trade and other payables 14 87,142 64,245 68,015 Amounts due to related parties 84 82 - Net restricted cash from - 78 - the consolidation invoice process (CIP) Borrowings 15 7,197 6,738 7,339 Corporation tax 2,513 3,403 4,591 ESPP scheme liability 801 381 562 ---------- ------------------ ------------ 101,511 77,731 83,043 NON-CURRENT LIABILITIES Lease liabilities 15 7,111 9,538 7,722 Deferred tax liabilities 33,035 26,180 25,617 Other long-term liabilities 4,388 5,468 7,635 Borrowings 15 7,260 13,476 11,073 Provisions 122 827 701 ---------- ------------------ ------------ 51,916 55,489 52,748 TOTAL LIABILITIES 153,427 133,220 135,791 ---------- ------------------ ------------ NET ASSETS 271,805 275,165 269,070 ========== ================== ============ EQUITY Share capital 2,865 2,847 2,853 Share premium account 233,779 231,229 231,671 Merger relief reserve 31,983 31,983 31,983 Reverse acquisition reserve (22,933) (22,933) (22,933) Share based payment reserve 8,096 5,914 7,439 Foreign exchange translation reserve (11,584) 9,491 (6,968) Accumulated retained earnings 29,599 16,634 25,025 ---------- ------------------ ------------ TOTAL EQUITY 271,805 275,165 269,070 ========== ================== ============
Consolidated statement of changes in equity
Share Share Merger Reverse Share Foreign Retained Total capital Premium relief acquisition based exchange earnings equity reserve reserve payments reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 January 2020 2,509 148,216 31,983 (22,933) 4,413 (352) 10,153 173,989 Restatement due to IFRS 15 Rustici application change - - - - - - 1,554 1,554 Profit for period - - - - - 4,916 4,916 Exchange differences on translating foreign operations - - - - - 9,843 - 9,843 ----------- --------- --------- ------------ ----------- ---------- ---------- ----------- Total comprehensive income for the period - - - - - 9,843 4,916 14,759 Issue of shares net of share issue costs 338 83,013 - - - - - 83,351 Share based payment charge / credited to equity - - - - 1,815 - - 1,815 Tax credit on share options - - - - - - (303) (303) Transfer on exercise and lapse of options - - - - (314) - 314 - Dividends - - - - - - - - payable Balance at 30 June 2020 2,847 231,229 31,983 (22,933) 5,914 9,491 16,634 275,165 Profit for period - - - - - - 12,488 12,488 Exchange differences on translating foreign
operations - - - - - (16,459) - (16,459) ----------- --------- --------- ------------ ----------- ---------- ---------- ----------- Total comprehensive income for the period - - - - - (16,459) 12,488 (3,971) Issue of shares net of share issue costs 6 442 - - - - - 448 Share based payment charge / credited to equity - - - - 1,525 - - 1,525 Tax credit on share options - - - - - - 1,440 1,440 Transfer - - - - - - - - on exercise and lapse of options Dividends paid - - - - - - (5,537) (5,537) Balance at 31 December 2020 2,853 231,671 31,983 (22,933) 7,439 (6,968) 25,025 269,070 Profit for period - - - - - - 5,222 5,222 Exchange differences on translating foreign operations - - - - - (4,616) - (4,616) ----------- --------- --------- ------------ ----------- ---------- ---------- ----------- Total comprehensive income for the period - - - - - (4,616) 5,222 606 Issue of shares net of share issue costs (refer to reconciliation in Note 17) 12 2,108 - - - - - 2,120 Share based payment charge / credited to equity - - - - 2,090 - - 2,090 Tax credit on share options - - - - - - 1,624 1,624 Transfer on exercise and lapse of options - - - - (1,433) - 1,433 - Dividends paid - - - - - - (3,705) (3,705) Balance at 30 June 2021 2,865 233,779 31,983 (22,933) 8,096 (11,584) 29,599 271,805 ----------- --------- --------- ------------ ----------- ---------- ---------- -----------
Consolidated statement of cash flows
Note Six months Six months Year to to to 31 Dec 2020 30 June 2021 30 June GBP'000 GBP'000 2020 GBP'000 Cash flow from operating activities Profit before taxation 4,609 4,136 13,469 Adjustments for:- (Gain)/loss on disposal of PPE and right-of-use assets 378 (142) (122) Share based payment charge 2,090 1,815 3,340 Amortisation of intangible assets 14,173 12,845 25,639 Depreciation of plant and equipment and right-of-use assets 1,380 1,723 3,245 Finance expense (including IFRS 16 charge) 226 332 614 Interest on borrowings 261 598 911 Acquisition-related contingent consideration and earn-outs 2,442 890 3,511 Fair value movement on contingent consideration - - (1,357) Payment of acquisition-related contingent consideration and earn-outs (1,180) (978) (1,006) Interest income (33) (6) (140) -------------- ----------- ------------- Operating cash flow before working capital changes 24,346 21,213 48,104 Decrease in trade and other receivables 462 7,391 (4,736) Decrease/(increase) in amount recoverable on contracts (5,894) 895 (3,427) Increase/(decrease) in payables 976 (6,782) 3,883 19,890 22,717 43,824 -------------- ----------- ------------- Interest paid (203) (781) (750) Interest received 33 6 140 Income tax paid (4,272) (1,829) (3,359) -------------- ----------- ------------- Net cash flow from operating activities 15,448 20,113 39,855 -------------- ----------- ------------- Cash flow used in investing activities Purchase of property, plant and equipment (223) (53) (114) Development of intangible assets (3,628) (3,106) (6,115) Investment in short-term deposits - (30,000) - Acquisition of subsidiaries, net of cash acquired 16 (52,089) (22,486) (38,988) Net cash flow used in investing activities (55,940) (55,645) (45,217) -------------- ----------- ------------- Cash flow used in financing activities Dividends paid 8 (3,705) - (5,537) Cash generated from issue of shares, net of share issue costs 2,120 80,208 80,581 Proceeds from borrowings - 18,182 18,182 Repayment of bank loans (3,653) (36,596) (36,640) Contingent consideration payments in the period (520) (121) (121) Cash payments for the principal portion of lease liabilities (2,011) (1,510) (3,317) Net cash flow from/(used in) financing activities (7,769) 60,163 53,148 -------------- ----------- ------------- Net increase/(decrease) in cash and cash equivalents (48,261) 24,631 47,786 Cash and cash equivalents at beginning of the period/year 88,614 42,032 42,032 Effects of foreign exchange rate changes (1,031) 1,382 (1,204) ----------- ------------- Cash and cash equivalents at end of the period/year 13 39,322 68,045 88,614 ============== =========== =============
Notes to the consolidated financial statements for the six months to 30 June 2021
1. General information
Learning Technologies Group plc ("the Company") and its subsidiaries (together, "the Group") provide a range of learning and talent software and services to corporate customers. The principal activity of the Company is that of a holding company for the Group, as well as performing all administrative, corporate finance, strategic and governance functions of the Group.
The Company is a public limited company, which is listed on the AIM Market of the London Stock Exchange and domiciled in England and incorporated and registered in England and Wales. The address of its registered office is 15 Fetter Lane, London, England, EC4A 1BW. The registered number of the Company is 07176993.
2. Basis of preparation
The unaudited condensed consolidated interim financial information has been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2020 annual report.
The interim results for the six months to 30(th) June 2021 are unaudited and do not therefore constitute statutory accounts in accordance with Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31(st) December 2020 have been filed with the Registrar of Companies and the auditor's report was unqualified, did not contain any statement under Section 498(2) or 498(3) of the Companies Act 2006 and did not contain any matters to which the auditors drew attention without qualifying their report.
The accounting policies used in preparing the interim results are the same as those applied to the latest audited annual financial statements.
Going concern
The Group meets its day-to-day working capital requirements from the positive cash flows generated by its trading activities and its available cash resources. These are supplemented when required by additional drawings under the Group's committed $21.0 million revolving credit bank loan facilities (RCF) and an uncommitted $28.0 million accordion facility , which were available until 2023. In July, the term loan was repaid in full, new debt facilities were agreed and an equity placing successfully raised gross proceeds of GBP85.0 million; refer to Note 17 for further details.
The Group continues to hold a strong liquidity position at 30(th) June 2021, with gross cash and cash equivalents of GBP39.3 million (Note 13) and net cash of GBP24.9 million (Note 15) (31(st) December 2020: gross cash was GBP88.6 million and net cash GBP70.2 million). Whilst there are a number of risks to the Group's trading performance, including from the COVID-19 pandemic and its impact on the global economy, as summarised in the 'Principal risks and uncertainties' section on pages 25 - 26 within the 2020 Annual Report, the Group is confident of its ability to continue to access sources of funding in the medium term.
The directors report that they have re-assessed the principal risks, reviewed current performance and forecasts, combined with expenditure commitments, including capital expenditure, and borrowing facilities. The Group's forecasts demonstrate it will generate profits and cash in the year ending 31(st) December 2021 and beyond and that the Group has sufficient cash reserves to enable it to meet its obligations as they fall due, as well as operate within its banking covenants, for a period of at least 12 months from the date of signing of these financial statements.
Going concern (continued)
The Group has also assessed a range of downside scenarios to assess if there was a significant risk to the Group's liquidity position. The forecasts and scenarios prepared consider our trading experience to date and we have modelled downside scenarios such as varying degrees of reductions in revenues and extended customer payment days. The Directors have concluded that it is appropriate to adopt the going concern basis of accounting in preparing the interim financial information, having undertaken a review of a detailed reforecast for 2021 and the impact this forecast has on the Group's gross cash, net debt and ability to meet bank covenants under the existing facilities agreement.
Alternative performance measures
The Group has identified certain alternative performance measures ("APMs") that it believes will assist the understanding of the performance of the business. The Group believes that Adjusted EBIT, adjusting items, recurring and non-recurring revenue, Shareholders' funds and net cash / debt provide useful information to users of the financial statements. The terms are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, IFRS measures.
Adjusting items
The Group has chosen to present an adjusted measure of profit and earnings per share, which excludes certain items which are separately disclosed due to their size, nature or incidence, and are not considered to be part of the normal operating costs of the Group. These costs may include the financial effect of adjusting items such as, inter alia, restructuring costs, impairment charges, amortisation of acquired intangibles, costs relating to business combinations, one-off foreign exchange gains or losses, integration costs, acquisition related contingent consideration and earn-outs, joint venture profits and losses and fixed asset and right-of-use asset disposal gains or losses.
3. Prior year adjustment
Following a review of the IFRS 15 revenue recognition policy applied in the Rustici CGU as part of the 2020 annual financial reporting process, the Group has concluded that Rustici contracts include an additional distinct performance obligation, for which the revenue should be recognised at a point in time on delivery, rather than all over time as the more conservative policy previously applied. As a result of this correction in the accounting, the Group has restated the balance sheet at 30(th) June 2020 as outlined below. There has been no impact on the income statement for the periods ended 31(st) December 2019 or 2020.
30 Jun Adjustments 30 Jun 2020 2020 GBP'000 GBP'000 (Restated) Non-current assets Property, plant and equipment 1,366 - 1,366 Right of use assets 10,470 10,470 Intangible assets 262,599 - 262,599 Deferred tax assets 4,546 (546) 4,000 Other receivables, deposits and prepayments - - - Amounts recoverable on contracts 759 - 759 ------------ 279,740 (546) 279,194 Current assets Trade receivables 22,450 - 22,450 Other receivables, deposits 4,177 - 4,177 and prepayments - Amounts recoverable on contracts 3,917 - 3,917 Amount owing from related parties - - - Cash and bank balances 68,045 - 68,045 Short-term deposits 30,000 30,000 Restricted cash balances 602 - 602 --------- ------------ ------------ 129,191 - 129,191 Total assets 408,931 (546) 408,385 Current liabilities Lease Liabilities 2,804 2,804 Trade and other payables 64,245 - 64,245 Amounts due to related parties 82 82 Net restricted cash from the consolidation invoice process (CIP) 78 78 Borrowings 6,738 - 6,738 Corporation tax 3,403 - 3,403 ESPP scheme liability 381 - 381 77,731 - 77,731 Non-current liabilities Lease Liabilities 9,538 9,538 Deferred tax liabilities 26,180 - 26,180 Other long-term liabilities 7,568 (2,100) 5,468 Borrowings 13,476 - 13,476 Provisions 827 - 827 ------------ 57,589 (2,100) 55,489 Total liabilities 135,320 (2,100) 133,220 Net assets 273,611 1,554 275,165 ========= ============ ============ Shareholders' equity Share capital 2,847 2,847 Share premium account 231,229 231,229 Merger reserve 31,983 31,983 Reverse acquisition reserve (22,933) (22,933) Share-based payment reserve 5,914 5,914 Foreign exchange translation reserve 9,491 9,491 Accumulated profits/(losses) 15,080 1,554 16,634 --------- ------------ ------------ Total equity attributable to the owners of the parent 273,611 1,554 275,165 ========= ============ ============ 4. Segment analysis
Geographical information
The Group's revenue from external customers and non-current assets by geographical location are detailed below.
United Asia Rest UK Europe States Pacific Canada of world Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Six months to 30 June 2021 Revenue 10,864 4,302 57,865 4,088 2,481 2,973 82,573 -------- ---------- -------- --------- -------- ---------- ------------ Non-current assets 29,371 - 277,239 15,171 18 10 321,809 -------- ---------- -------- --------- -------- ---------- ------------ Six months to 30 June 2020 Revenue 11,590 2,815 44,512 887 2,212 2,066 64,082 -------- ---------- -------- --------- -------- ---------- ------------ Non-current assets 29,480 - 231,569 14,114 31 - 275,194 -------- ---------- -------- --------- -------- ---------- ------------ Year to 31 December 2020 Revenue 21,501 6,184 92,281 3,508 4,344 4,506 132,324 -------- ---------- -------- --------- -------- ---------- ------------ Non-current assets 28,206 - 223,310 15,267 24 8 266,815 -------- ---------- -------- --------- -------- ---------- ------------
The total non-current assets figure is exclusive of deferred tax assets in each of the periods above.
Information about reported segment revenue, profit or loss and assets
Software & Platforms Content & Services Other On-premise Support Software Hosting and Platform Consulting Rental Grand Licenses & SaaS Maintenance Total Content development and other Total Income Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Six months to 30 June 2021 Recurring revenue 10,825 46,106 1,731 58,662 - 163 4,430 4,593 72 63,327 Non-recurring revenue 422 1,136 668 2,226 8,960 2,153 5,907 17,020 - 19,246 ----------- -------- ------------ --------- -------- ------------ ----------- --------- -------- --------- Revenue 11,247 47,242 2,399 60,888 8,960 2,316 10,337 21,613 72 82,573 ----------- -------- ------------ --------- -------- ------------ ----------- --------- -------- --------- Depreciation and amortisation (2,852) (1,012) - (3,864) Adjusted EBIT 16,270 5,695 72 22,037 Amortisation of acquired intangibles (9,808) (1,881) - (11,689) Other adjusting items (5,163) (122) - (5,285) Finance expenses (347) (107) - (454) Profit before tax 952 3,585 72 4,609 Additions to intangible Assets 59,998 12,172 - 72,170 Total assets 340,109 85,123 - 425,232 Six months to 30 June 2020 Recurring revenue 10,285 34,241 1,840 46,366 - 569 4,637 5,206 50 51,622 Non-recurring revenue 1,204 425 463 2,092 6,460 2,362 1,546 10,368 - 12,460 ----------- -------- ------------ --------- -------- ------------ ----------- --------- -------- --------- Revenue 11,489 34,666 2,303 48,458 6,460 2,931 6,183 15,574 50 64,082 ----------- -------- ------------ --------- -------- ------------ ----------- --------- -------- --------- Depreciation and amortisation (3,163) (476) - (3,639) Adjusted EBIT 15,277 3,070 50 18,397 Amortisation of acquired intangibles (8,957) (1,972) - (10,929) Other adjusting items (2,443) 35 - (2,408) Finance expenses (726) (198) - (924) Profit before tax 3,151 935 50 4,136 Additions to intangible Assets 34,946 - - 34,946 Total assets 348,978 59,407 - 408,385 Year to 31 December 2020 Recurring revenue 16,643 76,345 3,817 96,805 - 1,021 9,212 10,233 98 107,136 Non-recurring revenue 1,129 1,033 1,053 3,215 12,906 3,541 5,526 21,973 - 25,188 ----------- -------- ------------ --------- -------- ------------ ----------- --------- -------- --------- Revenue 17,772 77,378 4,870 100,020 12,906 4,562 14,738 32,206 98 132,324 ----------- -------- ------------ --------- -------- ------------ ----------- --------- -------- --------- Depreciation and amortisation (5,626) (1,811) - (7,437) Adjusted EBIT 32,224 8,026 98 40,348 Amortisation of acquired intangibles (18,132) (3,315) - (21,447) Other adjusting items (4,077) 30 - (4,047) Finance expenses (1,095) (290) - (1,385) Profit before tax 8,920 4,451 98 13,469 Additions to intangible Assets 62,433 - - 62,433 Total assets 342,941 61,920 - 404,861
Adjusted EBIT is the main measure of profit reviewed by the Chief Operating Decision Maker.
The total assets figure is inclusive of deferred tax assets in each of the periods above.
Information about major customers
In the six months to 30(th) June 2021 no customer accounted for more than 10 percent of reported revenues (H1 2020: no customer accounted for more than 10 percent of reported revenues).
5. Taxation
Current and deferred tax for the six months to 30(th) June 2021 has been calculated by preparing tax reconciliations incorporating permanent and temporary differences on an entity-by-entity basis to derive the Group's total income tax expense/(credit). This is allocated to current and deferred tax as outlined below.
Six months Six months Year to to to 30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Current tax: Tax on profits for the period/year 2,688 3,147 4,713 Adjustments in respect of prior years - - 376 Total current tax 2,688 3,147 5,089 Deferred tax: Origination and reversal of temporary differences (3,254) (3,587) (4,703) Adjustments in respect of prior years 323 (340) (4,025) Change in deferred tax rate (370) - (296) ------------- ------------- ------------ Total deferred tax (3,301) (3,927) (9,024)
Income tax (credit)/expense (613) (780) (3,935) ============= ============= ============ 6. Adjusting items
These items are included in normal operating costs of the business, but are significant cash and non-cash expenses that are separately disclosed because of their size, nature or incidence. It is the Group's view that excluding them from Operating Profit gives a better representation of the underlying performance of the business in the period. Further details of the adjusting items are included below.
Six months Six months Year to to to 30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Adjusting items included in Operating profit: Amortisation of acquired intangibles 11,689 10,929 21,447 Loss on disposal of fixed assets 197 1 21 (Profit)/loss on disposal of right-of-use assets 181 (143) (143) Acquisition-related contingent consideration and earn-outs 2,442 890 3,511 Fair value movement on contingent consideration - - (1,357) Net foreign exchange loss arising due to business acquisition - 1,070 1,070 Acquisition costs 1,581 383 715 Integration costs 884 207 230 ------------- ------------- ------------ Total adjusting items 16,974 13,337 25,494 ============= ============= ============ 6. Adjusting items (continued)
As outlined above, the material adjustments during the period are made in respect of:
- Amortisation of acquired intangibles - these costs are excluded from the adjusted results of the Group since the costs are non-cash charges arising from investment activities. As such, they are not considered reflective of the core trading performance of the Group. - Acquisition-related contingent consideration and earn-outs - these costs are excluded from the adjusted results since these costs are also associated with business acquisitions and represent post-combination remuneration, which is not included in the calculation of goodwill and not considered part of the core trading performance of the Group. - Costs of acquisition and integration - costs associated with completed acquisitions are excluded from the adjusted results on the basis they are directly attributable to investment activities, rather than the core trading activities of the Group. 7. Finance expenses Six months Six months Year to to to 30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Charge on contingent consideration 46 110 196 Interest on borrowings 261 598 911 Interest on IFRS 16 lease liabilities 180 222 418 ------------- ------------- ------------ 487 930 1,525 Interest receivable (33) (6) (140) ------------- ------------- ------------ 454 924 1,385 ============= ============= ============ 8. Dividends paid Six months Six months Year to to to 30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Final dividends paid 3,705 - - Interim dividend paid - - 5,537 3,705 - 5,537 ============= ============= ============
The proposed interim dividend of 0.30 pence per share, amounting to a total dividend payment of GBP2.4 million, is not included as a liability in these financial statements and will be paid on 29(th) October 2021 to shareholders on the register at the close of business on 8(th) October 2021.
9. E arnings per share Six months Six months Year to to to 30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Profit after tax attributable to owners of the Group : 5,222 4,916 17,404 Weighted average number of shares: Basic 740,599,837 692,823,974 710,348,462 Diluted 759,140,001 706,492,868 730,619,530 Basic earnings per share (pence) 0.705 0.710 2.450 Diluted earnings per share (pence) 0.688 0.696 2.382 Adjusted basic earnings per share (pence) 2.367 2.295 4.417 Adjusted diluted earnings per share (pence) 2.310 2.251 4.294
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has share options that are dilutive potential ordinary shares.
In order to give a better understanding of the underlying operating performance of the Group, an adjusted earnings per share comparative has been included. Adjusted earnings per share is stated after adjusting the profit after tax attributable to equity holders of the Group for certain charges as set out in the table below.
Six months to 30 June 2021 Six months to 30 June 2020 Year to 31 Dec 2020 Profit Weighted Pence Profit Weighted Pence Profit Weighted Pence per after average per after average per after average share tax number share tax number share tax number of of of shares shares shares GBP'000 '000 GBP'000 '000 GBP'000 '000 Basic earnings per ordinary share 5,222 740,600 0.705 4,916 692,824 0.710 17,404 710,348 2.450 --------- --------- --------- --------- --------- --------- --------- --------- ---------- Effect of adjustments: Amortisation of acquired intangibles 11,689 10,929 21,447 Integration costs 884 207 230 Acquisition costs 1,581 383 715 Fair value movement on contingent consideration - - (1,357) Acquisition earn-out 2,442 890 3,511 Net foreign exchange differences on business acquisitions - 1,070 1,070 Interest receivable (33) (6) (140) Finance expense on contingent consideration 46 110 196 Finance expense on lease liabilities (IFRS 16) 180 222 418 Income tax (credit)/expense (613) (780) (3,935) --------- --------- --------- --------- --------- --------- --------- --------- ---------- Effect of adjustments 16,176 - 2.184 13,025 - 1.880 22,155 - 3.119 --------- --------- --------- --------- --------- --------- --------- --------- ---------- Adjusted profit before tax 21,398 - - 17,941 - - 39,559 - - --------- --------- --------- --------- --------- --------- --------- --------- ---------- Tax impact after
adjustments (3,865) - (0.522) (2,040) - (0.295) (8,183) - (1.152) --------- --------- --------- --------- --------- --------- --------- --------- ---------- Adjusted basic earnings per ordinary share 17,553 740,600 2.367 15,901 692,824 2.295 31,376 710,348 4.417 Effect of dilutive potential ordinary shares: Share options - 18,540 (0.057) - 13,669 (0.044) - 20,271 (0.123) Deferred - - - - - - - - - consideration payable (conditions met) Deferred - - - - - - - - - consideration payable (contingent) Adjusted diluted earnings per ordinary share 17,533 759,140 2.310 15,901 706,493 2.251 31,376 730,619 4.294 10. Intangible assets Goodwill Customer Branding Acquired Internal Total contracts IP software and relationships development GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cost At 1 January 2020 134,985 92,532 2,524 39,680 12,289 282,010 Additions on acquisition 18,105 10,221 - 3,514 - 31,840 Additions - - - - 3,106 3,106 Foreign exchange differences 6,854 2,793 96 1,834 453 12,030 At 30 June 2020 159,944 105,546 2,620 45,028 15,848 328,986 Additions on acquisition 9,285 8,533 - 6,660 - 24,478 Additions - - - - 3,009 3,009 Foreign exchange differences (12,369) (4,764) (135) (2,986) (754) (21,008) --------- ------------------- --------- --------- ------------- --------- At 31 December 2020 156,860 109,315 2,485 48,702 18,103 335,465 Additions on acquisition (see note 15) 33,065 14,417 1,413 23,275 - 72,170 Measurement period adjustments 76 - - - - 76 Additions - - - - 3,628 3,628 Foreign exchange differences (2,684) (1,445) (23) (681) (108) (4,941) --------- ------------------- --------- --------- ------------- --------- At 30 June 2021 187,317 122,287 3,875 71,296 21,623 406,398 Accumulated amortisation At 1 January 2020 - 38,894 968 8,703 4,977 53,542 Amortisation charged in period - 7,913 145 2,871 1,916 12,845 --------- ------------------- --------- --------- ------------- --------- At 30 June 2020 - 46,807 1,113 11,574 6,893 66,387 Amortisation charged in period - 7,547 115 2,856 2,276 12,794 At 31 December 2020 - 54,354 1,228 14,430 9,169 79,181 Amortisation charged in period - 7,507 200 3,982 2,484 14,173 --------- ------------------- --------- --------- ------------- --------- At 30 June 2021 - 61,861 1,428 18,412 11,653 93,354 Carrying amount At 30 June 2020 159,944 58,739 1,507 33,454 8,955 262,599 ========= =================== ========= ========= ============= ========= At 31 December 2020 156,860 54,961 1,257 34,272 8,934 256,284 ========= =================== ========= ========= ============= ========= At 30 June 2021 187,317 60,426 2,447 52,884 9,970 313,044 ========= =================== ========= ========= ============= ========= 11. Right-of-use assets Computer equipment Property Total GBP'000 GBP'000 GBP'000 Cost At 1 January 2020 83 12,255 12,338 Additions on acquisitions - - - Additions - 2,219 2,219 Foreign exchange differences - 370 370 (1,002) Disposals - (1) (1,002) ----------- --------- -------- At 30 June 2020 83 13,842 13,925 Additions on acquisitions - 36 36 Additions - - - Foreign exchange differences - (491) (491) Disposals - - - At 31 December 2020 83 13,387 13,470 Additions on acquisitions - - - Additions 271 79 350 Foreign exchange differences (5) (188) (193) (1,335) Disposals - (2) (1,335) ----------- --------- At 30 June 2021 349 11,943 12,292 =========== ========= ======== Accumulated Depreciation At 1 January 2020 60 2,414 2,474 Charge for the year 23 1,244 1,267 Disposals - (286) (286) ----------- --------- -------- At 30 June 2020 83 3,372 3,455 Charge for the year - 1,209 1,209 Disposals - - - --------- -------- At 31 December 2020 83 4,581 4,664 Charge for the year 37 1,089 1,126 Disposals - (511) (511) ----------- --------- -------- At 30 June 2021 120 5,159 5,279 =========== ========= ======== Net book value At 30 June 2020 - 10,470 10,470 =========== ========= ======== At 31 December 2020 - 8,806 8,806 =========== ========= ======== At 30 June 2021 229 6,784 7,013 =========== ========= ======== (1) 2020 disposal relates to a sub-lease amendment whereby the Rustici business agreed to consolidate two separate leases part of which was held by Watershed. (2) 2021 disposal relates to the sub-lease of the Waltham property within PeopleFluent. The right-of-use asset was disposed and a corresponding finance lease receivable has been recognised within Sundry receivables in Note 12. 12. Other receivables, deposits and prepayments 30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Sundry receivables 2,080 145 371 Prepayments 5,315 4,032 3,848 7,395 4,177 4,219 ============= ============= ============ 13. Cash and cash equivalents, restricted cash and short-term deposits
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less:
30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 39,322 68,045 88,614 ============= ============= ============
Restricted cash balances comprise amounts held on behalf of third parties and employees as part of the Employee Stock Purchase Plan ('ESPP'):
30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Restricted cash 1,567 602 682 ============= ============= ============
Short-term deposits comprise term deposits with an original maturity greater than three months:
30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Short-term deposits - 30,000 - ============= ============= ============ 14. Trade and other payables 30 June 2021 30 June 2020 31 Dec 2020 GBP'000 GBP'000 GBP'000 Trade payables 3,221 3,127 2,335 Contract liabilities 63,269 49,409 51,679 Tax and social security 1,132 982 1,687 Contingent consideration and earn-outs payable 4,425 965 1,698 Accruals and other payables 15,095 9,762 10,616 ------------- ------------- -------------- 87,142 64,245 68,015 ============= ============= ============== 15. Borrowings
As at 30 June 2021 the Group had in place a $63 million debt facility with Silicon Valley Bank and Barclays Bank. This facility comprised a committed $42 million multicurrency term loan and a committed $21 million multicurrency revolving credit facility, both available to the Group until April 2023. The facility attracted variable interest between 1.6% and 2.1%, based on the Group's leverage, above LIBOR for the currency of the loan. The term loan was repayable with quarterly instalments of $2.5 million with the balance repayable on the expiry of the loan in April 2023.
The bank loan was secured by a fixed and floating charge over the assets of the Group and was subject to various financial covenants that were tested quarterly. The financial covenants were that the Group must ensure that its cash flow cover ratio was at least 1.1 times and its leverage ratio did not exceed 2.75. The cash flow cover and leverage ratio is not a statutory measure and so its basis and composition may differ from other leverage measures published by other companies.
The Group was compliant with all financial covenants throughout the period as at 30(th) June 2021. At that date the Group's cash flow cover was 3.60 and its leverage ratio was -0.70.
The term loan balance was repaid in full in July 2021 and new debt facility agreed. Refer to Note 17 for further details.
30 June 30 June 31 Dec 2021 2020 2020 GBP'000 GBP'000 GBP'000 Current interest-bearing loans and borrowings 7,197 6,738 7,339 Non-current interest-bearing loans and borrowings 7,260 13,476 11,073 Current lease liabilities 3,774 2,804 2,536 Non-current lease liabilities 7,111 9,538 7,722 ------------------- ------------------- ------------------- 25,342 32,556 28,670 =================== =================== ===================
Net debt / cash reconciliation
Net debt / cash can be analysed as follows:
30 June 30 June 31 Dec 2021 2020 2020 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 39,322 68,045 88,614 Short-term deposits - 30,000 - Borrowings: - - - * Revolving credit facility * Term loan (14,457) (20,214) (18,412) Net cash / (debt) 24,865 77,831 70,202 ==================== ==================== ==================== 16. Acquisitions
In the period, the Group acquired three businesses - Reflektive, PDT Global and Bridge. We have outlined below a summary of the consideration paid, the provisional fair value of acquired intangible assets, the fair value of other acquired assets and liabilities assumed at the acquisition date and the resulting goodwill for each acquisition in the period, with further detail provided for each acquisition below.
Acquisition Goodwill Acquired Acquired Acquired Acquired Fair Consideration Cash Net customer software brand deferred value paid acquired cash relationships and tax of other outflow IP liabilities identifiable assets and liabilities GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Reflektive 4,280 3,051 4,497 - (2,035) 191 9,984 3,322 6,662 PDT Global 7,512 4,060 430 170 (932) 2,177 13,417 2,148 11,269 Bridge 21,273 7,306 18,348 1,243 (7,263) (6,749) 34,158 - 34,158 --------- -------------- --------- --------- ------------ ------------- -------------- --------- -------- Total 33,065 14,417 23,275 1,413 (10,230) (4,381) 57,559 5,470 52,089 ========= ============== ========= ========= ============ ============= ============== ========= ========
Reflektive
On 1 February 2021, Learning Technologies Group Plc completed the acquisition of Reflektive Inc ("Reflektive"), a leading performance management software provider, from a group of institutional investors for cash consideration of $13.7 million (c.GBP10.0 million), funded from LTG's cash resources.
Headquartered in San Francisco, Reflektive specialises in engagement and analytics tools. It offers a collaborative goal setting, continuous feedback and analytics platform used by corporate teams and individuals to provide measurable results for boosting productivity, engagement, and retention. Reflektive has joined LTG's PeopleFluent business, integrating its solution with the existing PeopleFluent talent management portfolio. The combination with LTG's other software solutions provides opportunities for cross-sell and upsell-led growth.
The following table summarises the consideration paid for Reflektive, the fair value of assets acquired and liabilities assumed at the acquisition date.
Consideration Fair Value GBP'000 ---------------------------------------------------------------------------- ---------------------------------- Cash paid 5,840 Adjustments and hold backs (513) Payment for cash acquired 4,657 Total consideration 9,984 ---------------------------------------------------------------------------- ---------------------------------- Recognised amounts of identifiable assets acquired Fair value and liabilities assumed GBP'000 ---------------------------------------------------------------------------- ------------------------------------ Cash and cash equivalents 3,322 Restricted cash 1,168 Property, plant and equipment 59 Trade and other receivables 2,954 Trade and other payables (5,192) Net IFRS 16 liability (2,120) Deferred tax liabilities on acquisition (2,035)
Customer relationships identified on acquisition 3,051 Software and intellectual property identified on acquisition 4,497 Total identifiable net assets 5,704 ---------------------------------------------------------------------------- ------------------------------------ Goodwill 4,280 Total 9,984 ---------------------------------------------------------------------------- ---------------------------------- 16. Acquisitions (continued)
The total consideration and fair value adjustments to the assets and liabilities assumed are provisional and are management's best estimates at this time. These estimates may be refined in the second half of the financial year.
Acquisition-related intangible assets of GBP3.1 million relate to the valuation of the customer relationships which are amortised over a period of eight years, and GBP4.5 million relates to the value of the acquired intellectual property and software development which is amortised over ten years.
Acquisition costs of GBP0.2 million have been charged to the statement of comprehensive income in the year relating to the acquisition of Reflektive.
Reflektive contributed GBP4.3 million of revenue for the period between the date of acquisition and the balance sheet date and GBP0.7 million of profit before tax attributable to equity holders of the parent. As a preliminary assessment, had the acquisition of Reflektive been completed on the first day of the period Group revenues would have been approximately GBP0.9 million higher and group profit before tax attributable to equity holders of the parent would have been approximately GBP0.5 million lower.
PDT Global
On 5 February 2021, Learning Technologies Group Plc acquired UK-based The People Development Team Limited ('PDT Global'), a leading provider of online Diversity and Inclusion (D&I) training solutions, for cash consideration of GBP13.4 million funded from LTG's cash resources.
Further performance based payments, capped at GBP6.1 million are payable in cash to the PDT Global sellers based on ambitious revenue growth targets in each of the years ending 31 December 2021, 2022 and 2023. These payments are linked to continuous employment so are excluded from the acquisition consideration and instead are recognised as an expense over the service period within the Statement of Comprehensive Income.
The following table summarises the consideration paid for PDT Global, the fair value of assets acquired and liabilities assumed at the acquisition date.
Consideration Fair Value GBP'000 ---------------------------------------------------------------------------- ---------------------------------- Cash paid 13,417 Total consideration 13,417 ---------------------------------------------------------------------------- ---------------------------------- Recognised amounts of identifiable assets acquired Fair value and liabilities assumed GBP'000 ---------------------------------------------------------------------------- ------------------------------------ Cash and cash equivalents 2,148 Property, plant and equipment 30 Trade and other receivables 1,862 Trade and other payables (1,863) Net deferred tax assets/liabilities on acquisition (932) Customer relationships identified on acquisition 4,060 Intellectual property identified on acquisition 430 Brand name identified on acquisition 170 Total identifiable net assets 5,905 ---------------------------------------------------------------------------- ------------------------------------ Goodwill 7,512 Total 13,417 ---------------------------------------------------------------------------- ---------------------------------- 16. Acquisitions (continued)
The total consideration and fair value adjustments to the assets and liabilities assumed are provisional and are management's best estimates at this time. These estimates may be refined in the second half of the financial year.
Acquisition-related intangible assets of GBP4.1 million relate to the valuation of the customer relationships which are amortised over a period of four years, GBP0.4 million relates to the value of the acquired intellectual property which is amortised over five years and GBP0.2 million relates to the value of the acquired PDT Global brand, which is amortised over two years.
Acquisition costs of GBP0.1 million have been charged to the statement of comprehensive income in the year relating to the acquisition of PDT Global.
PDT Global contributed GBP2.2 million of revenue for the period between the date of acquisition and the balance sheet date and GBP0.9 million of profit before tax attributable to equity holders of the parent. As a preliminary assessment, had the acquisition of PDT Global been completed on the first day of the financial period Group revenues would have been approximately GBP0.4 million higher and group profit before tax attributable to equity holders of the parent would have been approximately GBP0.2 million higher.
Bridge
On 1 March 2021, Learning Technologies Group plc, acquired getBridge LLC and related assets ("Bridge"), a leading learning and talent development software provider, from Instructure Inc for a cash consideration of $47.5 million (c.GBP34.2 million), funded from LTG's existing cash resources.
Bridge is a learning, performance and skills development platform for mid-enterprise organisations, headquartered in the US with operations in the UK and Hungary. Bridge provides a learning management system in addition to performance, engagement and skills development products, on a single, easy-to-use, SaaS-based platform.
The acquisition of Bridge significantly extends LTG's mid-enterprise learning and talent offering. Bridge is highly complementary to PeopleFluent, which serves the large enterprise market, and BreezyHR, which serves the small and medium-sized business market. The acquisition is strategically important because it enables LTG to provide a holistic learning and talent development offering to meet the needs of small, mid-size and large enterprises, three distinct groups with varying requirements. The combination and integration of Bridge with LTG's other portfolio offerings, including the recently acquired Reflektive engagement and analytics platform, will create opportunities for cross-sell and upsell-led growth within the Group.
16. Acquisitions (continued)
The following table summarises the consideration paid for Bridge, the fair value of assets acquired and liabilities assumed at the acquisition date.
Consideration Fair Value GBP'000 ---------------------------------------------------------------------------- ---------------------------------- Cash paid 33,764 Adjustments and hold backs 394 Total consideration 34,158 ---------------------------------------------------------------------------- ---------------------------------- Recognised amounts of identifiable assets acquired Fair value and liabilities assumed GBP'000 ---------------------------------------------------------------------------- ------------------------------------ Trade and other receivables 796 Trade and other payables (7,545) Net deferred tax assets/liabilities on acquisition (7,263) Brand name identified on acquisition 1,243 Technology identified on acquisition 18,348
Customer relationships identified on acquisition 7,306 Total identifiable net assets 12,885 ---------------------------------------------------------------------------- ------------------------------------ Goodwill 21,273 Total 34,158 ---------------------------------------------------------------------------- ----------------------------------
The total consideration and fair value adjustments to the assets and liabilities assumed are provisional and are management's best estimates at this time. These estimates may be refined in the second half of the financial year.
Acquisition-related intangible assets of GBP7.3 million relate to the valuation of the customer relationships which are amortised over a period of eleven years, GBP18.3 million relates to the value of the acquired intellectual property and software development which is amortised over ten years and GBP1.2m relates to the value of the acquired Bridge brand which is amortised over five years.
Acquisition costs of GBP0.7 million have been charged to the statement of comprehensive income in the year relating to the acquisition of Bridge.
Bridge contributed GBP5.6 million of revenue for the period between the date of acquisition and the balance sheet date and GBP0.4 million of profit before tax attributable to equity holders of the parent. As a preliminary assessment, had the acquisition of Bridge been completed on the first day of the financial period Group revenues would have been approximately GBP2.8 million higher and group profit before tax attributable to equity holders of the parent would have been approximately GBP0.1 million higher.
Prior year acquisition measurement period adjustments
Outlined below are the retrospective adjustments to the provisional amounts recognised as goodwill in relation to the acquisitions that occurred in 2020. These adjustments have been made to reflect new information obtained about the circumstances that existed at each respective acquisition date and would have affected the measurement of goodwill at the time.
eCreators
Increase/(decrease) to Liabilities Goodwill recognised assumed GBP'000 amounts GBP'000 ----------------------------------------------- ----------------------------------- -------------------------------- Trade and other payables 272 272
eThink
Increase/(decrease) to Liabilities Goodwill recognised assumed GBP'000 amounts GBP'000 ----------------------------------------------- ----------------------------------- -------------------------------- Trade and other payables (196) (196) 17. Events since the reporting date
Proposed acquisition of GP Strategies
On 15(th) July the Company announced it had agreed to acquire GP Strategies Corporation ('GP Strategies') a leading global workforce transformation provider with significant offerings in learning services, custom content and consulting for $20.85 per GP Strategies share, representing a market capitalisation of $394 million (GBP284 million) (the "Consideration") and an enterprise value of $343 million (GBP247 million).
The Consideration and transaction costs for the Acquisition are intended to be part-funded by a conditional underwritten placing of new ordinary shares outlined below, with the balance being part-funded by up to c.$305 million in incremental debt financing (of which $40 million is to be repaid from GP Strategies' cash shortly after the Acquisition) and out of existing cash resources.
Equity Placing
On 15(th) July the Company successfully placed a total of 44,300,000 new ordinary shares in the capital of the Company of 0.375 pence each at a price of 192 pence per Placing Share, raising gross proceeds of approximately GBP85.0 million (before expenses of c.GBP2.2 million).
Repayment of existing term loan and agreement of new debt facilities
On 13(th) July the Group repaid the outstanding balance of the existing term loan and associated accrued interest totalling $20.2 million (GBP14.6 million). T he Group has also agreed to a new multicurrency senior term and revolving facilities agreement. This new debt facility which is with Silicon Valley Bank ('SVB'), Barclays Bank, Fifth Third Bank, HSBC UK Bank and the Bank of Ireland, comprises two committed term loans, Term Facility A of $265.0 million, Term Facility B of $40.0 million, a $50.0 million committed RCF and a $50.0 million uncommitted accordion facility.
There have been no other significant events since the reporting date.
Glossary
Alternative Performance Measures
In reporting financial information, the Group presents alternative performance measures, "APMs", which are not defined or specified under the requirements of IFRS. The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional useful information on the underlying trends, performance and position of the Group and are consistent with how business performance is measured internally. The alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other companies' alternative performance measures. The key APMs that the Group uses are outlined below.
APM Closest Reconciling items Definition and purpose equivalent to IFRS measure IFRS measure Income Statement Measures Adjusted Operating Adjusting items Adjusted EBIT excludes adjusting EBIT profit items. A reconciliation from Adjusted EBIT to Operating profit is provided in the Consolidated statement of comprehensive income. -------------- -------------------- --------------------------------------- Adjusting None Refer to definition Items which are not considered items part of the normal operating costs of the business, are separately disclosed because of their size, nature or incidence are treated as adjusting. The Group believes the separate disclosure of these items provides additional useful information to users of the financial statements to enable a better understanding of the Group's underlying financial performance. An explanation of the nature of the items identified as adjusting is provided in Note 6 to the financial statements. -------------- -------------------- --------------------------------------- Recurring Revenue Refer to Note 4 Recurring revenue is defined revenue as the revenue streams of the Group that are predictable and expected to continue into the future upon customer renewal. -------------- -------------------- --------------------------------------- Non-recurring Revenue Refer to Note 4 Non-recurring revenue is defined revenue as the revenue streams of the Group that arise from one-off fees or services that may or may not happen again. -------------- -------------------- --------------------------------------- Balance Sheet Measures Net cash None Refer to Note 15 Net cash / debt is defined as or debt Cash and cash equivalents and short-term deposits, less Bank overdrafts and other current and non-current borrowings. A reconciliation is provided
in Note 15 to the financial statements. -------------- -------------------- --------------------------------------- Shareholders' None Refer to definition Calculated as Total Equity at funds the end of the period/year divided by the number of shares in issue at the end of the period/year, The shares in issue at 31(st) December 2020 were 739,297,410 (based on Note 27 of the 2020 Annual report) and 742,515,875 at 30(th) June 2021. -------------- -------------------- ---------------------------------------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
IR DKKBPCBKDKCB
(END) Dow Jones Newswires
September 21, 2021 02:00 ET (06:00 GMT)
1 Year Learning Technologies Chart |
1 Month Learning Technologies Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions