Learning Technologies Group PLC Half Year Trading Update and Notice of Results (1988G)

TIDMLTG

RNS Number : 1988G

Learning Technologies Group PLC

22 July 2019

22 July 2019

Learning Technologies Group plc

("LTG", the "Group")

(AIM: LTG)

Half Year Trading Update and Notice of Results

Strong sales momentum, with EBIT materially ahead of expectations

Learning Technologies Group plc, provider of services and technologies for digital learning and talent management, announces the following trading update for the six months to 30 June 2019.

For the first half of the year, the Board expects Group revenues to be approximately GBP62.5 million (H1 2018: GBP33.8 million), an increase of c.85%. Adjusted EBIT is anticipated to be ahead of expectations at not less than GBP20.0 million for the first half of 2019 (H1 2018: GBP8.9 million), representing an EBIT increase of c.125% and EBIT margin increase from 26.3% to c.32.0%. The Board is confident that full-year adjusted EBIT will be materially ahead of current market expectations.

Approximately 67% of revenues are from recurring contracts (H1 2018: 51%), primarily driven by the transformational PeopleFluent acquisition in May 2018.

Revenues in PeopleFluent were supported by a higher-than-expected retention rate for its software licences. This underscores the Board's confidence that, as previously guided, PeopleFluent is on track to return to growth in 2020. Breezy HR has integrated swiftly and is growing revenue ahead of expectations. Excluding PeopleFluent, organic revenue growth in the Software & Platforms division was strong for H1, and the expectation is that this trend will continue in H2.

Content & Services organic revenues were up significantly on H2 2018. Strong sales momentum from LEO and Preloaded has continued from Q4 2018 into H1 2019, with notable successes including a large multi-million dollar contract win for LEO in the US. As a result the Board expects substantial organic growth in the Content & Services division in the second half of the year.

Net debt is in line with expectations at GBP13.9 million (31 December 2018: GBP11.5 million), following the acquisition of Breezy HR in April 2019 for an initial cash consideration of GBP8.8 million, the final deferred contingent consideration payment to Rustici vendors of GBP2.8 million, and a final dividend payment of GBP2.3 million.

The above results are stated on a comparable basis with the Group's 2018 Annual Report and Accounts and exclude the impact of the adoption of IFRS 16 with effect from 1 January 2019. The Board also intends to restate adjusted EBIT to include the share based payment charge. Further details of the impact of these adjustments will be provided in the Group's half year results announcement on 16 September 2019.

Jonathan Satchell, Chief Executive, said:

"I am particularly delighted by the sales momentum in our Content & Services division that has built over the last nine months. Our Software & Platforms division continues to go from strength-to-strength.

LTG's outstanding margins and cash generation provide additional capacity to invest in further sales growth in the second half of the year, and pursue a number of new initiatives to augment organic growth into 2020. We continue to consider a number of very interesting acquisition opportunities that would meaningfully enhance the Group.

This strong H1 performance underpins the Board's confidence that full-year EBIT will be materially ahead of expectations."

ENDS

Enquiries:

 
 Learning Technologies Group plc 
  Jonathan Satchell, Chief Executive                  [phone] 
  Neil Elton, Chief Financial Officer                           1554 
 Numis Securities Limited (NOMAD and Corporate 
  Broker) 
  Stuart Skinner, Nick Westlake (Nomad)               [phone] 
  Ben Stoop (Corporate Broker)                                  1000 
 Goldman Sachs International (Joint Corporate 
  Broker)                                             [phone] 
  Bertie Whitehead, Adam Laikin (Corporate Broker)              1000 
 FTI Consulting (Public Relations Adviser)            [phone] 
  Rob Mindell / Jamie Ricketts                                  1000 
 

About LTG

LTG is a leader in the high growth 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 and Asia-Pacific.

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July 22, 2019 02:00 ET (06:00 GMT)