Key Financial highlights
· Revenues up 60% to £33.8m
· Organic revenues up 10% on a constant currency basis (excluding CSL)
· Strong EBIT margin performance; 26.3% (H1 2017: 17.8%)
· Adjusted diluted EPS increased by 140% to 1.122p (H1 2017: 0.468p)
· Business model continuing to support robust margin progression
· Strong cash generation with significant funding capacity for further acquisitions
· Interim dividend of 0.15p; a 67% increase on 2017
Strategic highlights
· Significant expansion in recurring software revenues via transformational PeopleFluent acquisition
· Strong recurring revenue growth, c70% on a pro forma basis; H1 2018: 51% (H1 2017: 37%)
· Integration of PeopleFluent ahead of expectations and adds talent capability and US reach
· Increased revenue diversity with majority now generated outside the UK
· Active pipeline of attractive acquisition opportunities
Outlook
· Full year profit will be significantly ahead of the Board’s expectations based on the upgraded PeopleFluent EBIT margin
· High recurring revenue provides good visibility into 2019
· Healthy order book and strong margins provide further confidence
Commenting, Jonathan Satchell, CEO of LTG, said:
“The first half of 2018 has been pivotal for LTG with the PeopleFluent acquisition confirming our shift towards recurring software revenues, and significantly increasing our US presence. Together with NetDimensions, PeopleFluent demonstrates our ability to successfully integrate businesses and drive growth and margin progression through operating model improvements.
Alongside our track record of delivering organic growth and substantial margin improvements, LTG has a strong balance sheet and acquisition pipeline, and is well placed to continue its strategy of consolidating the high growth corporate e-learning market. A robust performance from our core business and the successful integration of PeopleFluent underpins our confidence that full year profit will be significantly ahead of the Board’s expectations.”
Financial summary
| H1 2018 | H1 2017 | change | |
| Revenue | £33.8m | £21.1m | +60% |
| Recurring Revenue % | 51% | 37% | |
| Revenues Outside UK % | 59% | 45% | |
| Adjusted EBIT | £8.9m | £3.8m | +137% |
| Adjusted EBIT margin | 26.3% | 17.8% | |
| Statutory PBT | £1.3m | (£2.3m) | |
| Adj. Diluted EPS | 1.122p | 0.468p | +140% |
| Interim Dividend per share | 0.15p | 0.09p | +67% |
| Net Debt | (£15.7m) | (£6.1m) | -159% |
Operational highlights
Software & Platforms – 51% of Group revenues (H1 2017: 40%)
· NetDimensions returned to organic growth at a substantially lower cost base; renewal rate in excess of 100% in H1 2018, plus new sales wins 500% higher than H1 2017
· Integration of PeopleFluent acquisition ahead of expectations; the Board now expects the EBIT margin of PeopleFluent to be at least 25% in 2019
· Merging NetDimensions and PeopleFluent’s talent software businesses – substantial benefits to be gained from leadership, operational and revenue synergies
· Rustici Software and gomo continue to show strong organic growth
Content & Services – 49% of Group revenues (H1 2017: 60%)
· In-line performance despite tough prior year comparators in LEO Learning and PRELOADED
· CSL project revenues completed in H1 2018 as anticipated
· Margin progression from 9% in H1 2017 to 18% in H1 2018
Analyst and investor presentation
LTG will host an analyst and investor presentation at 9 a.m. today, Tuesday 25 September 2018, at the offices of Numis.
Capital Markets Day
LTG expects to host a Capital Markets Day for analysts and investors on Thursday 15 November 2018.
Enquiries:
| Learning Technologies Group plc
Jonathan Satchell, Chief Executive Neil Elton, Chief Financial Officer |
+44 (0)20 7402 1554 |
| Numis Securities Limited
Stuart Skinner / Michael Wharton (Nominated Adviser) Ben Stoop (Corporate Broker) |
+44 (0)20 7260 1000 |
| Goldman Sachs International (Joint Corporate Broker)
James A Kelly Adam Laikin |
+44 (0)20 7774 1000 |
| FTI Consulting (Public Relations Adviser)
Rob Mindell / Jamie Ricketts |
+44 (0)20 3727 1000 |
About LTG
LTG is a leader in the high growth workplace learning industry. 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 meet their performance objectives.
LTG is listed on the London Stock Exchange Alternative Investment Market (LTG.L) and headquartered in London. The Group has offices in Europe, the United States, Asia-Pacific and South America.
Further information on the Group is available at www.ltgplc.com