Learning Technologies Group plc, the provider of services and technologies for digital learning and talent management, is pleased to announce a trading update for the year ending 31 December 2019.
The Board expects Group revenues to be up c.38% to c.£130.0 million (2018: £93.9 million). Recurring revenues increased to c.73% (2018: 68%), driven by strong ongoing performance in the Software & Platforms division, a full year contribution from PeopleFluent and Watershed, and the acquisition of BreezyHR in April 2019. Excluding PeopleFluent, LTG delivered organic revenue growth on a constant currency basis in both the Software & Platform and Content & Services divisions.
PeopleFluent delivered revenues of c.$93.0 million in 2019, ahead of previously announced expectations of c$91.0 million, supported by a significantly improved retention rate for its software licences and a good sales performance by Affirmity. This underscores the Board’s confidence that, as guided at the time of the acquisition in 2018, PeopleFluent will return to growth in 2020.
Adjusted EBIT* is expected to be comfortably ahead of market expectations at not less than £41.0 million (2018: £26.0 million), an increase of c.58%, primarily as a result of a continued trend of improved margins across the Group and synergies being realised from the successful integration of acquisitions.
The Group’s net cash position at 31 December 2019 of £3.8 million (2018: £11.5 million net debt) was better than anticipated due to substantial cash generation in H2.
An active pipeline of attractive international acquisition opportunities in both Software & Platforms and Content & Services, supports the Group’s ambition to further consolidate the high growth corporate learning and talent market.
Further details will be provided with LTG’s full year results which are expected to be announced on 24 March 2020.
Jonathan Satchell, CEO of LTG, said:
“2019 has been a year of encouraging growth across the Group with a strong performance in Content & Services in the second half of the year and outstanding results from our innovative Software & Platform businesses such as BreezyHR, Rustici and Watershed complementing our established PeopleFluent talent and learning business. We are seeing the early successes of the Board’s decision to make focussed investments in R&D and incremental sales initiatives to support sustainable organic growth, driving momentum into 2020.
In 2019, the Group continued its track record of delivering strong margins, benefiting from enhanced leadership positions in our key markets. LTG has proven that it can successfully integrate, improve and grow the businesses we acquire, delivering excellent value for shareholders and comprehensive, innovative and industry-leading capabilities and services for our clients. We have an active pipeline of acquisition opportunities in 2020 and continue to invest in cross-selling initiatives and explore new routes-to-market.”
* Adjusted EBIT results and comparator year data incorporate the new accounting standard IFRS16 – Leases (adopted 1 January 2019) and the inclusion of share-based payments as set out in the table below. Further details of these changes were provided in the Half Year Report dated 16 September 2019 and will be included in LTG’s full year results.