Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Learning Technologies churning out the cash

Numis Securities remains "very comfortable" with its 'buy' recommendation and has shifted the price target up to 90p
Computer-based learning
Numis is now expecting EBIT of £14mln for 2017

E-learning specialist Learning Technologies Group PLC (LON:LTG) said profit and cash generation in 2017 were significantly ahead of expectations.

The board said it expects group revenues for 2017 to be not less than £51.8mln, up from £28.3mln in 2016.

READ: Learning Technologies Group interims beat expectations; impact of NetDimensions deal to be felt more fully in the second-half

The strong performance was driven by organic revenue growth of more than 20% (excluding the Civil Service training contract it won in partnership with KPMG), with recurring revenues up to 39% from 27% in 2016, largely as a result of the strong growth in the group’s software businesses and a maiden contribution from NetDimensions, which was acquired in March 2017.

READ: Learning Technologies sees better results this year due to contract timing change

Adjusted earnings before interest and tax (EBIT) will be materially ahead of market expectations at not less than £14mln, up from £7mln the year before.

The doubling of EBIT was primarily as a result of strong growth in services and software licence sales, the successful integration of NetDimensions and a continued focus on controlling costs.

At the end of 2017, gross cash was up to £15.7mln from £5.3mln a year earlier, and net cash was positive at around £1.0mln, versus net debt at the end of 2016 of £8.5mln.

READ: Capital Network’s analysis of Learning Technologies (requires subscription)

There was the promise of more to come, as well, with the group revealing it has an encouraging pipeline of international acquisition opportunities.

"2017 has been another exceptional year. LTG has experienced robust organic revenue growth during the year and, along with the successful acquisition and integration of NetDimensions, now enjoys a higher proportion of recurring revenues and an increasingly diversified client base both in terms of market sectors and geographical reach,” said Andrew Brode, the chairman of LTG.

“LTG's scale and expertise allows it to work closely with large blue-chip corporates and national governments as their trusted strategic partner, who are increasingly embracing e-learning solutions as evidenced by the record order book we carry into 2018,” he added.

Numis Securities raised its target price to 90p after what it termed a “strong trading update”.

The broker had been expecting the group to end the year with net debt of £8mln, whereas it actually ended it cash positive.

Numis is now expecting EBIT of £14mln for 2017 and has increased the underlying profit before tax forecast to £13mln from £12.3mln previously; the earnings per share estimate has been nudged up to 1.9p from 1.8p.

“We remain very comfortable with our BUY recommendation on LTG with risk to estimates firmly on the side as we move through 2018,” the broker said.

In late afternoon trading, shares in Learning Technologies were up 13.4%, or 10.0p at at 84.8p.

--- Updates share price --- 

View full LTG profile View Profile

Learning Technologies Group plc Timeline

Related Articles

The Internet of Things
April 30 2018
Richard Kilsby, the non-executive chairman of Telit, said that the early signs of changes made, especially to the group's activities and cost base, have led to positive operational progress since the beginning of 2018
Buying online
November 14 2017
The company toned down full-year revenue guidance after a review of procedures but is still growing like topsy
The D3S detector kit
April 20 2018
Kromek, formerly Durham Scientific Crystals, was incorporated in April 2003 to commercialise technology that had been developed in the Physics Department of Durham University over a period of some 20 years.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use