Learning Technologies ends year in line with market consensus

(Sharecast News) - Digital learning and talent management specialist Learning Technologies Group said in an update on Friday that it anticipated group revenues from continuing operations for the year would be at least £560m, consistent with consensus expectations for the year. The AIM-traded firm said that would represent a slight decrease from 2022 revenue of £588.6m, primarily due to a challenging macroeconomic environment affecting transactional and project-based work.

Despite the challenges, the firm said it managed to maintain a resilient performance with a 2% decline in underlying organic revenue.

In terms of adjusted EBIT for continuing operations, LTG said it expected it to be no less than £98m, also aligning with consensus expectations for the year.

That would also be slightly lower than the 2022 adjusted EBIT figure of £99.9m.

However, the company maintained an adjusted EBIT margin of 17.5%, which was broadly consistent with the prior year's margin of 17%.

The board said the slight improvement in margins was driven by a focus on profitability and significant enhancements within GP Strategies following an initiative to enhance the integration of Leo.

As a result, GP Strategies achieved an EBIT margin of 15% in the second half, up from 12% in the first half, and an exit run-rate EBIT margin that slightly exceeded previous guidance of approximately 17%.

Learning Technologies also reported significant progress in reducing its net debt position.

As of 31 December, the company's net debt stood at £78.6m - a substantial reduction from the £119.8m recorded at the end of December 2022.

The board put the positive financial trend down to strong cash generation, which contributed to ongoing deleveraging of the company's balance sheet.

Additionally, on 2 January the group successfully completed the sale of its non-core Lorien Engineering Solutions asset for $21.4m in cash, on a cash and debt-free basis and subject to customary adjustments.

This transaction would further support the company's efforts to swiftly reduce its debt burden.

"LTG has delivered a resilient performance in a challenging macro backdrop, underpinned by our SaaS and long-term contracts, representing 72% of first-half revenues," said chief executive officer Jonathan Satchell.

"Our continued focus on margin progression has supported a strong relative profit performance. As expected, revenues on an organic constant currency basis were marginally down as a result of lower transactional volumes, as indicated in July.

"LTG remains uniquely placed to capture growth opportunities in a more-than-$100bn addressable market as a result of our scale and breadth of offering in digital learning and talent management."

Satchell said the company's strong balance sheet supported investment and accretive acquisitions that fit with its business model, as it continued to optimise its portfolio of businesses.

"Our reliable and strong cash generation creates optionality as demonstrated by our voluntary debt repayment in September.

"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 and resilience in 2024."

Learning Technologies said it would announce its results for the year ended 31 December in April, at which time it would provide further guidance on the year ahead.

At 1223 GMT, shares in Learning Technologies Group were up 17.07% at 81.6p.

Reporting by Josh White for Sharecast.com.