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Learning Technologies Group Plc - Half-year Report

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Learning Technologies Group plc

HALF YEAR RESULTS 2020

Resilient performance and FY20 expected to be in line with market expectations

 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 2020.

Key highlights

Resilient performance in H1 2020.

Robust business model delivered organic growth in SaaS and on-premise licence revenues in H1 2020, and a return of project activity in Content & Services since the half year.

£81.8m placing in May 2020 provides platform to capture long-term growth opportunities in digital learning and talent management starting with acquisition of eCreators announced today.

Open LMS integrated and growing well since acquisition in March 2020, adding expertise in a market-leading Learning Management System (Moodle), and a p latform for long-term growth boosted by eCreators bolt-on.

2022 run-rate target reconfirmed; c.£230m revenues and c.£66m Adjusted EBIT.

Financial highlights

Recurring revenues account for 81% of Group (H1 2019: 74%), underpinning resilience.

Revenue up 2%, including contribution from Open LMS acquisition.

Acceleration in digital learning adoption offset by delays to projects and implementations due to COVID-19, leading to a small decline in underlying revenue.

Underlying Adjusted EBIT of £20.1 million (excluding non-cash items), ahead of prior year (H1 2019: £19.4 m); Adjusted EBIT of £18.4 million (H1 2019: £19.4 million), including previously disclosed non-cash items, share-based payments and amortised R&D.

Software & Platforms (76% of Group revenue):

 

o  Revenue up 13%, driven by acquisition of Open LMS and growth across Rustici,   GOMO and Breezy HR.

 

o  Stable retention rates and some postponements in new sales due to COVID-19 in   PeopleFluent.

Content & Services (24% of Group revenue):

 

o  Revenue down 22%, as expected, due to COVID-19 delaying some projects.

 

o  Prestigious project wins include $1m virtual-reality healthcare project for PRELOADED.

Good cash generation, and successful placing in May 2020, resulting in net cash of £77.8m.

Robust balance sheet and debt facility supports strong acquisition pipeline.


Shareholder returns

In recognition of LTG's robust performance and cash generation, the Board intends to reinstate the FY19 final dividend of 0.50 pence, in addition to a proposed interim dividend of 0.25 pence.

LTG will pay the interim dividend of 0.25 pence per share and postponed FY19 dividend of 0.50 pence per share on 30th October 2020 to all shareholders on the register as at 9th October 2020.

The Board will review the appropriate total dividend in respect of FY20 in due course.


Current trading and outlook

Reinstating guidance; Board expects FY20 performance to be in line with market expectations.

LTG is actively pursuing its acquisition pipeline in high growth digital learning and talent management market.

Improving momentum for new sales in Content & Services in H2.


Jonathan Satchell, CEO of LTG, said:

"Our people remain our highest priority, and LTG's performance is a testament to their commitment and dedication.  Delivering strong results during a global crisis is an exceptional achievement.  LTG's combination of excellent cash generation, high margins and a robust balance sheet support the Board's decision to pay the postponed FY19 dividend and propose an interim dividend.

High levels of recurring revenue, momentum for new sales and an improving order book support the Board's confidence of delivering FY20 results in line with market expectations.  We have an exciting and active acquisition pipeline and also a robust balance sheet to capitalise on the structural trends in digital learning and talent management.  These factors enable us to reconfirm our run-rate target of c.£230 million revenues and c.£66 million EBIT by end 2022."