Learning Technologies Group PLC (AIM:LTG, OTC:LTTHF) hailed the resilience of its software-as-a-service (SaaS) and long-term contracts as it posted half-year results showing growing profit.
The board declared an interim dividend of 0.45p per share, maintained at the same level as a year ago, but trimmed guidance for the full year amid a challenging macroeconomic backdrop.
The digital learning and talent management specialist reported revenue of £250.3 million for the first six months of 2024, down 12% year on year, or 3.8% lower on an organic, constant currency basis, but higher than the £248 million guidance given earlier in the summer.
A subdued macroeconomic backdrop has affected overall spending on learning and talent development activities, the group said, particularly in transactional and project work, with a softness in SaaS subscriptions.
SaaS and long-term contracts accounted for 76% of total revenues, up from 72% a year earlier, while all major clients above $5 million annual revenue that were up for renewal in the period were successfully renewed.
Profits on an adjusted EBIT basis grew 5% to £43.3 million and statutory operating profit increased 65% to £38.3 million.
Adjusted EBIT margin increased to 17.3% from 15.3%, which was put down to the commercial transformation of the GP Strategies talent transformation business, which has seen profits more than doubled in the three years since acquisition, and a focus on cost optimisation.
The sale of VectorVMS was completed for $50 million as part of initiatives to simplify the portfolio to focus on learning and talent development, which along with a strong cash conversion of 70%, saw net debt slashed to roughly £1 million at the end of August from £57.5 million at the 30 June half-year stage.
Guidance for the full-year was trimmed to £473-493 million of revenues and adjusted EBIT of £86-91 million, based on the current sterling-dollar exchange rate of $1.32, with the board expecting the outcome to be towards the bottom of the range given current trading, in particular at GP Strategies.
Chief executive Jonathan Satchell said: "LTG has delivered a resilient performance, with growth in adjusted EBIT of 5% on a like for like basis, and strong cash performance in a macroeconomic backdrop which remains challenging.
“Whilst the lack of revenue growth is disappointing, the structural drivers of the learning and talent development market remain intact and support our belief that LTG will return to growth when market conditions improve."