24
July 2024
This announcement contains inside
information for the purposes of the market abuse regulation (EU No.
596/2014) as it forms part of United Kingdom domestic law by virtue
of the European Union(Withdrawal) Act 2018,
as amended.
Learning Technologies Group
plc
("LTG", the
"Group")
(AIM:
LTG)
Half year trading and US
regulatory update
Trading update
LTG, a leading provider of services
and technologies for learning and talent management, announces a
trading update for the six months to 30 June 2024. All figures
relate to this period unless otherwise stated.
Reported revenue is expected to be
not less than £248 million (H1 2023: £268.2 million on a
like-for-like basis(1)), with an FX headwind in H1 due
to a weaker US dollar(2). Our SaaS and long-term
services contracts, which account for c.75% of revenues, continue
to be resilient. However, in line with the broader market, we
continue to experience subdued transactional revenues.
LTG continues to deliver margin
progression, driven primarily by GP Strategies' commercial
transformation, with Group adjusted EBIT for the first half
expected to be not less than £43 million (H1 2023: £41.1 million on
a like for like basis).
Despite revenue being challenged in
this current macro environment, LTG will continue to increase
margin in FY24. We expect Group revenues to be in the range of £485
million to £505 million and adjusted EBIT to be in the range of £91
million to £96 million (based on an average GBP:USD rate of 1.26
for H2 2024) for the full year ending 31 December
2024(3). Adjusting for the completion of the sale
of VectorVMS(4) on 1 July, revenue is expected to be in
the range of £480 million to £500 million and adjusted EBIT in the
range of £88 million to £93 million.
LTG has a strong balance sheet and
continues to deleverage, with net debt as at 19 July 2024 of c. £6
million, following the disposal of VectorVMS and a voluntary debt
repayment of $25 million. Net debt as at 30 June 2024, was
£57.2 million (FY 2023: £78.6 million).
The Group will publish its half year
results in September 2024.
US
regulatory update
As a US company that performs work
for the US Government, GP Strategies requires certain approvals and
is subject to restrictions intended to protect classified
information.
LTG has been notified by GP
Strategies of the invalidation ("temporary suspension") of the
eligibility for GP Strategies to work on new classified
contracts. The suspension will remain in effect until GP
Strategies returns to compliance with the applicable operating
requirements. The temporary suspension is a serious matter and GP
Strategies is working tirelessly to resolve all relevant issues to
the satisfaction of the US Government.
GP Strategies will continue to work
on existing classified contracts, subject to the customer's
agreement. No customer has indicated any intention to
terminate their contract. The Board believes that the value
of the contracts is not material in the context of total Group
revenue and profit.
A further update will be provided in
due course.
Further background on the US regulatory
update
LTG announced the acquisition of GP
Strategies in July 2021. This was conditional on CFIUS
(Committee on Foreign Investment in the US) clearance because LTG
is a foreign owner of a US company performing classified work for
the US Government. CFIUS clearance was granted and the acquisition
completed in October 2021.
Since then LTG has operated under
FOCI (Foreign Ownership Control and Influence) arrangements which
govern the amount of 'control and influence' the foreign parent
company has over the operations of the FOCI controlled
subsidiary.
LTG is fully aware of the serious
nature of this situation and supports all actions the leadership of
GP Strategies is taking to resolve it.
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Enquiries:
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Learning Technologies Group plc
Jonathan Satchell, Chief
Executive
Kath Kearney-Croft, Chief Financial
Officer
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+44 (0)20 7832 3440
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Deutsche Numis (NOMAD and Corporate Broker)
Nick Westlake, Ben Stoop, Tejas
Padalkar
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+44 (0)20 7260 1000
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Goldman Sachs International (Joint Corporate
Broker)
Bertie Whitehead, Adam
Laikin
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+44 (0)20 7774 1000
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FTI
Consulting (Public Relations
Adviser)
Jamie Ricketts, Emma Hall, Lucy
Highland, Jemima Gurney
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+44 (0)20 3727 1000
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About LTG
Learning Technologies Group plc
(LTG) is a leader in the growing workplace 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) Excluding Lorien and TTI
contracts disposed of in 2023, and reclassification of pass-through
revenue, at 1.23 average H1 2023 USD/GBP FX. Reported 2023 H1
financials were £284.6m revenue and £43.1m adjusted
EBIT.
(2) Average USD/GBP FX: 1.23 H1 2023
and 1.26 H1 2024.
(3) USD / GBP 1 cent change in
average rate for the year = c.£0.8m FY 2024 adjusted EBIT
impact.
(4) VectorVMS 2023 performance:
$11.4m revenue & $7.1m adjusted EBIT, weighted 45% H1 / 55%
H2.