Learning Technologies Group PLC (AIM:LTG, OTC:LTTHF) (LTG) said revenue grew around 2% in the first half of the year as resilient recurring revenues were offset by lower volumes of transactional work.
The digital learning and talent management services provider said the macroeconomic environment remains challenging and levels of transactional and project-based work have been affected by a lengthening of sales cycles, particularly for financial services and technology clients.
Organic revenue growth is expected to be flat in the first half compared with a year earlier, the AIM-listed group said, while underlying profits (EBIT) are expected to be not less than £43mln, compared to £43.5mln a year ago.
For the full year, revenues are now expected to be in a range of £550-570mln and adjusted EBIT between £98-103mln.
Chief executive Jonathan Satchell said: “LTG has high levels of recurring revenues, underpinned by long-term services and SaaS contracts. While macro conditions have impacted transactional volumes, we are well placed to take advantage of greater project activity as the macro environment improves.”
The performance of the GP Strategies talent transformation business was impacted by one-off factors from the combination of GP’s content business with LEO Learning in January to form a new business called GPLX, which represents 16% of GP Strategies revenues in the period but saw some initial disruption.
The company expressed confidence that “significantly improved” margins will be seen in the second half of the year, including the exit run rate EBIT margin for GP Strategies, which will improve from the 12% in the first half to the previously expected 17% or so.
Satchell said the commercial transformation programme within GP Strategies is expected to continue to deliver “substantial margin improvements in H2 and beyond”.
With continued deleverage cutting net debt to £108.4mln at the end of June from £119.8mln at the end of December, he said the balance sheet “allows for select accretive acquisitions, which supports our confidence of further progress in the second half of the year”.