Learning Technologies Group PLC (AIM:LTG, OTC:LTTHF), a learning and talent management service provider, said its core market remained "subdued" in the first half as it updated on trading. However, it also revealed that margin enhancements have helped boost earnings.
In its update, LTG expects told investors revenue will be at least £248 million for the six months ended June, compared with £268.2 million in the comparable period last year.
This decline is attributed to a weaker US dollar. The company’s SaaS and long-term services contracts, which constitute about 75% of revenues, have remained stable.
Margin enhancements mean adjusted underlying earnings (EBIT) for the first half is expected to be at least £43 million, up from £41.1 million in the same period last year. This growth is largely driven by the commercial transformation of GP Strategies.
For the full year ending December 31, LTG anticipated group revenues to be between £485 million and £505 million, with EBIT ranging from £91 million to £96 million.
But, following the sale of VectorVMS on July 1, revenue expectations have moved to £480 million to £500 million, with adjusted EBIT between £88 million and £93 million.
LTG has a robust balance sheet and continues to reduce its debt. As of July 19, net debt stood at approximately £6 million, following the disposal of VectorVMS and a $25 million voluntary debt repayment.
Net debt as of June 30, 2024, was £57.2 million, down from £78.6 million at the end of 2023.
In a separate update, LTG addressed a regulatory issue concerning GP Strategies, a US company acquired by LTG in October 2021. GPS, which works on classified contracts for the US Government, has faced a temporary suspension of its eligibility to work on new classified contracts. This suspension will remain until it complies with the necessary operating requirements.
Despite the suspension, GPS continues to work on existing classified contracts with customer agreement, and no customers have indicated plans to terminate their contracts. The Board believes the value of these contracts is not significant relative to the Group's total revenue and profit.