Last checked at 26 Jul 2023 07:00
26 July 2023
Learning Technologies Group plc
("LTG", the "Group")
(AIM: LTG)
Half year trading update
LTG, the leading provider of services and technologies for digital learning and talent management, announces a trading update for the six months to 30 June 2023. All figures relate to this period unless otherwise stated.
As previously guided, and as recently widely reported, the macro environment remains challenging. Reported revenue from continuing operations is expected to be not less than £283 million (H1 2022: £277.8 million1). Year-on-year organic revenue growth is expected to be flat in H1 2023. Resilience in our SaaS and long-term services contracts, which accounted for 71% of FY 2022 revenues, has been offset by a lower than expected level of transactional and project-based work due to the lengthening of sales cycles, particularly for our financial services and technology clients.
Group adjusted EBIT from continuing operations for the first half is expected to be not less than £43 million (H1 2022: £43.5 million2). GP Strategies delivered margins of c.12% in the first half, which while in line with the average in FY 2022 were lower than the 14% margins achieved in Q4 2022.
In particular, GP Strategies' first half performance was impacted by one-off factors from the integration of LEO with GP's content business in January 2023 to form a new business called GPLX, which represents 16% of GP Strategies revenues in H1 2023. Whilst the integration of GPLX caused more initial disruption than expected, that has been resolved and the business has been refocused and new processes implemented during the last two months that will enhance productivity throughout H2. We are confident we will see significantly improved margins in the second half of the year, reflecting the improvements in GPLX and the continued progress with the commercial transformation programme, such that the exit run rate EBIT margin for GP Strategies will be in line with expectations at c.17%.
In light of the first half performance, for the full year ending 31 December 2023 we now expect Group revenues in the range of £550 million to £570 million and adjusted EBIT in the range of £98 million to £103 million (based on an average GBP:USD rate of 1.28 for H2 2023).3,4
LTG has a strong balance sheet and continues to deleverage, with net debt at 30 June 2023 of £108.4 million (FY 2022: £119.8 million).
The Group will publish its half year results in September 2023.
Jonathan Satchell, Chief Executive of Learning Technologies Group, said:
"LTG has high levels of recurring revenues, underpinned by long-term services and SaaS contracts. While macro conditions have impacted transactional volumes, we are well placed to take advantage of greater project activity as the macro environment improves. LTG's model is highly resilient, and we expect the commercial transformation programme within GP Strategies to continue to deliver substantial margin improvements in H2 and beyond.
Our strong balance sheet allows for select accretive acquisitions, which supports our confidence of further progress in the second half of the year."
Enquiries: | |
Learning Technologies Group plc Jonathan Satchell, Chief Executive Kath Kearney-Croft, Chief Financial Officer | +44 (0)20 7832 3440 |
Numis Securities Limited (NOMAD and Corporate Broker) Nick Westlake, Ben Stoop, Tejas Padalkar | +44 (0)20 7260 1000 |
Goldman Sachs International (Joint Corporate Broker) Bertie Whitehead, Adam Laikin | +44 (0)20 7774 1000 |
FTI Consulting (Public Relations Adviser) Jamie Ricketts / Emma Hall / Lucy Highland / Jemima Gurney | +44 (0)20 3727 1000 |
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.
Notes
1. Reported revenue from continuing operations excludes the discontinued UK apprenticeships business, further to our announcement in December 2022 on non-core assets. Including the discontinued UK apprenticeships business, H1 2022 reported revenues were £281.8 million.
2. Reported adjusted EBIT from continuing operations excludes the discontinued UK apprenticeships business, further to our announcement in December 2022 on non-core assets. Including the discontinued UK apprenticeships business, H1 2022 reported adjusted EBIT was £44.1 million.
3. FY 2022 revenue and adjusted EBIT from continuing operations, excluding the discontinued UK apprenticeships business, was £588.6 million and £99.9 million respectively.
4. As at 25 July 2023, company-compiled market expectations for the year ending 31 December 2023 are reported revenues of £609.2 million (median) and adjusted EBIT of £109.4 million (median).