Learning Technologies Group Regulatory News (LTG)

26 September 2023

Learning Technologies Group plc

HALF YEAR RESULTS 2023

Resilient performance with high levels of visibility from recurring revenues

FY23 performance expected to be in line with analyst estimates

Learning Technologies Group plc, a global market leader in digital learning and talent management, announces half year results for the six months ended 30 June 2023. All figures relate to that period unless otherwise stated.

Strategic and operational highlights

Financial highlights

Dividend

Current trading and outlook

1 Median company-compiled analyst estimates, as at 14 September 2023, are £560.2m revenues and £98.0m Adjusted EBIT for FY23

Jonathan Satchell, Chief Executive Officer of Learning Technologies Group, said:

"LTG has delivered a resilient performance in a challenging macro backdrop, underpinned by our SaaS and long-term contracts, which represent 72% of H1 2023 revenues. Revenues, on an organic constant currency basis, were flat as a result of lower transactional volumes, as indicated in July. 

LTG remains uniquely placed to capture growth opportunities in a >$100 billion addressable market as a result of our scale and breadth of offering in digital learning and talent management. Our balance sheet supports investment and accretive acquisitions that fit with our business model, whilst also allowing us to make a voluntary debt repayment. Demand from organisations to recruit, motivate and retain the best talent, allied with improvements from our commercial transformation programme in GP Strategies, support our confidence of meeting analyst estimates for FY23."

Financial summary: 

* Organic growth on a constant currency basis

Analyst and investor presentation:

LTG will host an analyst and investor webcast at 09:00 today, 26 September 2023. The registration link can be found below:

https://attendee.gotowebinar.com/register/6277184884607235423

Telephone dial-in details: +44 330 221 9922 (+1 (951) 384-3421 for international dial-in).

Access Code: 838-970-977

About LTG

Learning Technologies Group plc (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, South America and Asia-Pacific.

Chief Executive Review

Introduction

LTG is a global provider of integrated talent management and learning software and services.

Our purpose is shared by all of our companies: we help organisations keep up with ever-changing workforce development needs. Organisations need to recruit, motivate and retain the best talent. 

To meet this demand, we have built a broad offering to capture a >$100 billion addressable market for digital learning and talent management. The size of the opportunity reflects long-term, structural drivers. 

Our businesses are a cohesive federation of like-minded, highly profitable leaders in talent management and learning software and services with a common go-to-market strategy. Where it is advantageous to our strategy, performance and client needs, we collaborate on bilateral cross-selling and we integrate our businesses' systems. 

LTG continues to evolve by building out our offering through a combination of organic growth and strategic acquisitions that complement the current business. Our strong cash generation and prudent balance sheet give us a platform to pursue select accretive acquisitions.

The Group remains well placed to benefit from AI and continues to make progress with its AI strategy. A number of projects, trials and policies are underway across the Group. For example, GP Strategies is helping some of its largest clients to train their own AI models across learning and talent and recently launched its AI Consulting framework in May 2023. GP Strategies expects to launch its AI learning programme in October for Learning and Development leaders. Where relevant, our businesses are collaborating on AI initiatives. Character-based AI initiated by the PRELOADED team is being introduced to the largest GP Strategies client for character-based learning assistant exploration. As part of our long-term strategy, we will consider acquisitions of AI technology businesses who have good products but need access to the market.

Resilient performance with high levels of visibility from recurring revenues

Revenues from continuing operations for the six months to June 2023 grew by 2% to £284.6 million (H1 2022: £277.8 million). Our recurring revenues were offset by lower transactional volumes in the first half of 2023, as indicated in our July update, resulting in flat revenues on an organic constant currency basis. This performance in a challenging macro backdrop underlines the resilience of our model, with SaaS and long-term contracts representing 72% of H1 2023 revenue (H1 2022: 71%). 

As expected, the operational focus in H1 2023 remained the large-scale commercial transformation of GP Strategies, acquired in 2021. The addition of GP Strategies has been a step-change for our scale, tripling revenues and doubling profits. One-off issues in the first half of the year relating to the integration of LEO into GP Strategies' content division to form GPLX, impacted its first half performance. These have now been resolved and we have seen an improvement in GPLX margins in July and August compared to H1 with further improvement expected in the remainder of the second half of the year. As expected, overall margins in GP Strategies are improving and we expect the exit run-rate adjusted EBIT margin for the entire GP Strategies business will be in line with expectations at c.17%.

Adjusted EBIT was slightly lower at £43.1 million (H1 2022: £43.6 million). Statutory operating profit from continuing operations improved 5% to £23.2 million (H1 2022: £22.2 million), including adjusting items of £19.9 million (H1 2022: £21.4 million).

LTG is a cash generative business, which enables us to make a voluntary debt repayment of $25 million on 29 September 2023, giving an expected $1.7 million benefit per annum on interest payments at current interest rates.

As announced in December 2022, a non-core asset within GP Strategies had been identified for disposal in 2023. The sale of this business is progressing well and we expect to provide a further update before the end of the year.

Corporate Governance

ESG initiatives remain at the forefront of our business process and strategy as we continue to advance towards our 2023 targets, including making progress during the first half of the year around sustainable procurement, scope 3 data, colleague engagement and training.

We implemented a group-wide sustainable procurement policy and will continue to refine our data and supplier review process, including cascading our recently updated supplier code of conduct policy. These steps help us to ensure that our supply chain is aligned to our goals in the ESG space. In addition, we are focusing heavily on our scope 3 data, looking more in-depth at our upstream purchased goods and service category and evaluating our supply chain. Our Ecovadis scores from our February 2023 submission improved substantially and we have reduced our Scope 1 and Scope 2 emissions by more than 60% over our 2019 baseline year. 

From the colleague perspective, we reactivated our engagement survey to measure satisfaction and had a response rate of 75%. Whilst there is no room for complacency, we were heartened by most of results and qualitative feedback. We have implemented disciplined processes for action planning and follow-up and we have several other colleague initiatives underway in parallel to include delivering our in-house designed core leadership programme, and strengthening our performance enablement process to proactively address development planning and well-being. I am also excited to share that our largest subsidiary, GP Strategies, had numerous internal promotions further diversifying their senior leadership team.

We remain focused and committed to meeting the ESG goals that we set forth in the 2022 annual report.

Operational Review

With effect from this interim report, reporting divisions have been updated to reflect internal reporting on a business unit basis, and the revised format is consistent with that used by the Chief Operating Decision Maker. Following the reorganisation and integration of LEO and PDT into GP Strategies, the Content & Services division now includes all three businesses in addition to Affirmity and PRELOADED. The Software and Platforms division reflects the results for the Product companies. The categorisation of the companies under the division heading is outlined below. Note 3 to the accounts includes a restatement of the prior year's comparative result.

Content & Services (74% of H1 2023 Group revenue)

Content & Services comprises GP Strategies, PRELOADED and Affirmity. GP Strategies is a global workforce transformation provider of organisational and technical performance learning solutions. PRELOADED is a BAFTA-winning immersive games studio.  Affirmity provides a portfolio of software, consulting services and blended learning solutions to help US-based enterprise and mid-market companies measure diversity, build inclusive workforces and operate effective DE&I and affirmative action programmes.

Revenue increased by 4.5% to £211.5 million (H1 2022: £202.3 million) reflecting the benefit of the strength of the US dollar and 1.8% organic constant currency growth with particularly strong growth in Affirmity and PRELOADED. There was moderate growth in GP Strategies despite lengthening sales cycles and the challenging macro environment impacting on transactional and project-based work. As outlined previously, the integration challenges within GPLX that impacted performance in the first half of the year have been resolved.

Long-term contracts continued to perform as organisations maintained their investment in delivering effective workforce transformation solutions in a digital, flexible and fast-paced corporate environment.

Effective 1 January 2023, LEO Learning, a digital learning specialist was integrated with GP Strategies' global content design team to create the world's largest and most creative custom content and learning experience design offering, called GPLX. Simultaneously, PDT Global joined GP Strategies' Leadership Training division to create a combined force in Diversity, Equity and Inclusion (DE&I). These additions to GP Strategies' portfolio enhance its capabilities as a world-leading learning and talent transformation company. 

GP Strategies' solutions improve the effectiveness of organisations by delivering innovative and superior consulting, training, and business improvement solutions. Clients include Global 500 companies, automotive, financial services, technology, aerospace and defence industries, and other commercial and government customers. The business has experienced good growth in managed learning services with the ramp up of new accounts, and in the Americas division with the expansion and growth in existing accounts and non-US automotive accounts. AMEA had strong growth in H1 2023 following a slower Covid recovery in H1 2022. This was partially offset by the temporary GPLX H1 integration challenges and lower transactional revenue due to a slowdown in spending in large Human Capital Management implementation projects.

PRELOADED has seen a strong start to the year and continues to win highly innovative contracts with significant clients including a global entertainment company and a global international social media company.

During the first half of 2023, Affirmity delivered strong revenue growth driven by an improvement to the client renewal rate, cross-selling at renewal and adding new clients. 

Software & Platforms (26% of H1 2023 Group revenue)

The Software & Platforms division comprises SaaS and on-premise licenced product solutions as well as hosting, support and maintenance services. PeopleFluent provides cloud-based talent management solutions and services to large-enterprise clients that require recruiting, performance, succession, compensation, learning and organisation charting capabilities beyond what is available within their current HR systems. Breezy provides a largely self-service SaaS talent acquisition solution aimed at small and medium-sized businesses. Bridge is an employee-focused learning and performance platform operating in the higher growth, mid-market with proven potential to move into sectors of the enterprise market. Rustici Software is a global expert in e-learning interoperability software. Open LMS provides the largest scale capability in the global open-source Moodle™ services market. VectorVMS is a market-leading SaaS-based technology for the contingent workforce. 

Software & Platforms revenue of £72.9 million (H1 2022: £75.5 million) declined 3% due to a combination of mixed business performance and FX tailwinds. On an organic constant currency basis Software & Platforms declined 4.7% driven by a 10.8% decline in PeopleFluent as expected, lower revenue in Breezy due to softer transactional revenue from the US SME recruitment market and lower year-on-year performance in Reflektive due to softness in technology sector customers and the commencement of a strategy to migrate customers to a version of Reflektive within Bridge. This was partially offset by continued strong growth in Rustici and Bridge, and moderate growth in OpenLMS.

The macroeconomic picture has suppressed Breezy's performance in H1 2023, as a 49% reduction in transactional revenue related to job postings, now representing c15% of Breezy revenues, masks a 3% growth in platform hosting revenues.

Rustici has continued to deliver strong organic revenue growth in the first half of the year driven by its Content Controller product which represents 60% of the growth (as it is the youngest and fastest growing) and SCORM Cloud products.

Open LMS had moderate organic constant currency revenue growth as customers rebased their requirements following strong performance in the Covid years.   

VectorVMS reported a slight softening in revenues compared to the first half of 2022 as a result of customers reducing their utilisation of contingent labour and healthcare labour rates moderating after strong demand in Covid years. 

Dividend

On 14 July 2023, the Company paid a final dividend of 1.15 pence per share, giving a total dividend for 2022 of 1.60 pence per share. Given its confidence in the continuing success of the Group, the Board is pleased to declare an interim dividend of 0.45 pence per share (2022: 0.45 pence per share). This dividend will be paid on 27 October 2023 to all shareholders on the register as at 6 October 2023.

Current trading and outlook

In line with the pattern established in the first half of 2023, LTG continues to see resilient trading in our SaaS and long-term contracts, offset by lower transactional volumes, consistent with current macroeconomic trends. While GP Strategies has seen lower demand in certain regions such as China, it is expected to deliver a significantly improved exit run-rate EBIT margin of c.17%, driven by improvements to GPLX and a commercial transformation programme.

The Board expects FY23 performance to be in line with analyst estimates, including updated expectations for FX and share-based payments. The Group remains well-placed to capitalise on greater project activity as macro conditions improve.

LTG remains uniquely placed to capture growth opportunities in a >$100 billion addressable market as a result of our scale and breadth of offering in digital learning and talent management. Our balance sheet supports accretive acquisitions that fit with our culture. Demand from organisations to recruit, motivate and retain the best talent, allied with improvements from our commercial transformation programme in GP Strategies, support our confidence of further progress in the second half of the year.

Jonathan Satchell

Chief Executive 

26 September 2023

Chief Financial Officer's Review

In the six months ended 30 June 2023, despite the challenging economic climate, revenues for continuing operations increased by 2% to £284.6 million (H1 2022: £277.8 million). The Group has experienced growth and resilience in SaaS and long-term contracts in contrast to transactional revenue with the proportion of this category of revenue increasing to 72% from 71% in H1 2022. 

Revenue in Content & Services increased 5% to £211.5 million (H1 2022: £202.3 million) with the division now accounting for 74% of Group revenue (H1 2022: 73%). Organic constant currency revenue growth was 1.8% (H1 2022: 1.6%), due to a combination of moderate growth in GP Strategies and strong growth in Affirmity and PRELOADED. Long-term contracts accounted for 65% of the division's revenue, an increase from 62% in H1 2022, a testament to the resilience of recurring revenue. GP Strategies saw strong growth in managed learning services contracts, and AMEA following a slower Covid recovery in 2022, and the Americas division. Offsetting this good growth were the temporary H1 integration challenges in GPLX, slowdown in spending in large implementation projects and the macroeconomic climate affecting transactional revenues. PRELOADED revenue growth was fuelled by an increased US presence alongside developing stronger long-term client relationships resulting in increased work from existing clients. Affirmity also delivered strong growth driven by an improvement to the client renewal rate, cross-selling at renewal and acquiring new clients. 

Revenue in Software & Platforms decreased 3% to £72.9 million (H1 2022: £75.5 million) with the division now representing 26% of Group revenue (H1 2022: 27%).  On an organic constant currency basis Software & Platforms declined 4.7% (H1 2022: 6.5% growth) driven by an expected 10.8% decline in PeopleFluent, continued challenges in Breezy as the transaction business related to the SME US labour market remained subdued despite resilient SaaS revenues, and Reflektive due to softness in technology sector customers and the strategy to migrate customers to a version of Reflektive within Bridge. These challenges were partially offset by continued growth in Rustici driven by its Content Controller product and moderate growth in OpenLMS as customers rebalance their requirements following the Covid years, including some organisations losing their government sponsored funding and a move back to face-to-face learning.

Adjusted EBIT from continuing operations decreased slightly to £43.1 million (H1 2022: £43.6 million continuing operations). The resulting adjusted EBIT margin of 15.1% was down from 15.7% in H1 2022, driven primarily by lower revenue in the Software & Platforms division resulting in operational deleverage and the temporary H1 challenges in GPLX which are now resolved.

Adjusted EBIT margin in the Content & Services division at 11.8% (H1 2022: 12.0%) was broadly in line with the prior year. Software & Platforms adjusted EBIT margin reduced from 25.5% in H1 2022 to 24.8% due to a decline in revenues resulting in slight operational deleverage.

The Group reported an increase in operating profit of 5% to £23.2 million (H1 2022: £22.2 million continuing operations, £21.4 million reported) which is stated after amortisation of acquired intangibles, various acquisition earn-out charges, loss on disposal of fixed assets, transaction and integration costs. Amortisation of acquired intangibles decreased to £16.6 million (H1 2022: £18.0 million). Acquisition earn-out charges decreased to £1.1 million (H1 2022: £2.3 million). Contingent consideration arrangements are in place for eThink, eCreators, and PDT and are all dependent on challenging incremental revenue growth targets. Loss on disposal of fixed assets were £0.9 million (H1 2022: £0.2 million). Integration costs decreased to £1.2 million (H1 2022: £2.3 million) related to the integration of GP Strategies, with further costs expected in H2. We remain on track to complete the integration in line with our initial estimate of $13 million. For further details of the items excluded from statutory operating profit, see note 6.

Net finance expenses of £6.7 million (H1 2022: £4.2 million) include interest on borrowings of £7.0 million (H1 2022: £3.1 million), £0.3 million (H1 2022: £0.3 million) relating to the Group's leases under IFRS 16, and £0.5 million interest receivable (H1 2022: £0.2 million). 

The Group reported a profit before tax of £16.5 million for the six months ended 30 June 2023 (H1 2022: £18.0 million). The tax charge of £4.5 million (H1 2022: tax charge of £3.8 million) is primarily driven by applying UK and international tax rates to associated results offset by the net favourable impact of tax rate changes on deferred assets and liabilities and net non-deductible foreign exchange adjustments.

Discontinued operations, reflecting the closure of the UK Apprenticeship business, generated a loss after taxation of £1.1 million for the period (H1 2022: £0.4 million profit).

Basic earnings per share for continuing and discontinued operations in H1 2023 was 1.376 pence (H1 2022: 1.848 pence). Adjusted diluted earnings per share for continuing operations as set out in Note 9 was 10% down on the prior year at 3.293 pence (H1 2022: 3.666 pence) reflecting marginally lower adjusted operating profit, a significant increase in interest costs and a higher number of shares including the potential dilutive impact of share options.

Gross cash of £78.1 million and net debt of £108.4 million, excluding £12.6 million of lease liabilities, at 30 June 2023 compares with gross cash of £94.8 million and net debt of £119.8 million, excluding £14.9 million of lease liabilities, at 31 December 2022. The covenant net debt / adjusted EBITDA ratio was 0.9x in June 2023 (1.1x in December 2022).

Share-based payments are lower year-on-year due to a release of prior year costs resulting from leavers and performance criteria not being met.  

Cash generated from operations was strong at £32.6 million (H1 2022: £26.8 million) as we tightly manage our working capital, and net cash flow from operating activities was £26.7 million (H1 2022: £18.6 million).

Free cash flow2 was £5.6 million (H1 2022: £8.2 million) as set out below, and we expect free cash flow to continue to be H2 weighted.

Adjusted operating cash flow was £1.7 million higher than H1 2022 primarily reflecting a lower working capital investment offset by higher capital expenditure in the period and lower share-based payment charges. Cash conversion was 65%, an improvement from 60% in H1 2022. 

Net interest payments increased to £10.6 million from £3.7 million, including £4.5m related to interest costs from 2022 payable in January 2023 as the loan was rolled for 6 months to mitigate interest rate rises in H2 2022. Tax payments decreased to £5.9 million (H1 2022: £8.2 million) due to a combination of the reorganisation and prior year payments. Integration and transaction costs primarily relate to the GP Strategies acquisition in late 2021. Earnout payments relate to Breezy and eCreators. Proceeds from asset sale were £nil in H1 2023, with the 2022 net cash inflow due to the sale of an investment of £2.3 million related to the sale of the NAS JV completed in April 2022.

The Group plans to voluntarily repay $25 million of its term loan in addition to the normal quarterly payment of $9.6 million on 29 September 2023. The expected benefit of the voluntary repayment in 2023, at current interest rates, is c.$1.7 million per annum.

Net assets decreased to £419.6 million at 30 June 2023 (31 December 2022: £426.3 million) and total equity per share2 decreased from 54.0 pence per share to 53.0 pence per share.

2 Alternative Performance Measure (APM) term defined and explained in the Glossary

3 As reported in H1 2022

4 Excludes integration & transaction costs

Kath Kearney-Croft

CFO

26 September 2023

Consolidated statement of changes in equity 

Consolidated statement of cash flows

1 Interest paid for six months ending 30 June 2023 (£11.1 million) is higher than interest charged for the same period (£6.9 million), mainly as the last six months interest of 2022 were paid in January 2023 as per the lending agreement.

 Notes to the consolidated financial statements for the six months to 30 June 2023

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 2022 annual report.

The interim results for the six months to 30 June 2023 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 December 2022 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 may be supplemented, if required, by additional drawings under the Group's committed $50.0 million revolving credit facility (RCF) which is available until October 2025; refer to Note 17 for further details.

The Group continues to hold a strong liquidity position as at 30 June 2023, with gross cash and cash equivalents of £78.1 million (Note 14). Net debt of £108.4 million includes a fully drawn $265.0 million term loan which is repayable in quarterly instalments of $9.6 million commencing in December 2022 (Note 17) (31 December 2022: gross cash was £94.8 million and net debt was £119.8 million). Whilst there are a number of risks to the Group's trading performance, as summarised in the 'Principal risks and uncertainties' section on pages 27 - 28 within the 2022 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 December 2023 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. 

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 reforecast for 2023 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, SaaS and long-term contracts, transactional revenue, total equity per share 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 share-based payment charges, contingent consideration and earn-outs, cloud computing configuration and customisation costs, joint venture profits, profit on sale of a joint venture and fixed asset and right-of-use asset disposal gains or losses.

3. Segment analysis

Geographical information

The Group's revenue from external customers and non-current assets by geographical location are detailed below.

1 The values as presented for Canada and the United States for the six months to 30 June 2022 have been combined into 'North America' to align with the geographical segmentation as reported to the Chief Operating Decision Maker internally.

The total non-current assets figure is exclusive of deferred tax assets in each of the periods above.

The non-current assets as at 30 June 2022 have been represented following the prior year acquisition measurement adjustments as detailed in the Annual Report for the year ended 31 December 2022.

3. Segment analysis (continued)

Information about reported segment revenue, profit or loss from continuing operations and assets

3. Segment analysis (continued)

Effective with this interim report, there are changes to the grouping of businesses within the reportable segments, including restating the prior year's comparative result. 

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 June 2023 no customer accounted for more than 10 per cent of reported revenues (Six months to 30 June 2022: no customer accounted for more than 10 per cent of reported revenues).

4. Taxation

Current and deferred tax for the six months to 30 June 2023 has been calculated by applying the jurisdictional statutory rates on an entity-by-entity basis to derive the Group's total income tax expense. This is allocated to current and deferred tax as outlined below:

Of the total income tax expense, £4,472,000 relates to taxation on continuing operations (six months to June 2022 expense £3,841,000 and year to 31 December 2022 expense £9,784,000).

5. (Loss) / Profit on discontinued operations, net of tax

The table below show the results of the discontinued operations which are included in the Group Income Statement and Group Statement of Cash Flows respectively.