Learning Technologies Group PLC (LON:LTG) has traded in line with expectations this year and has seen an encouraging increase in recurring revenues.
The LTG board expects revenues, excluding the PeopleFluent business acquired in May, will be at least £27.3mln for the first half of 2018 compared to £21.5mln in the first half of 2017, which is an increase of around 27%.
READ: Learning Technologies trades in-line with expectations as it completes PeopleFluent acquisition
On a constant currency like-for-like (LFL) basis and excluding the impact of the Civil Service Learning (CSL) project, organic revenue growth was around 10% year-on-year. Growth was driven in particular by a strong performance in LTG's Platforms division, with the board especially pleased with the successful integration of, and new business wins by, the NetDimensions business.
Group operating margins remain robust, driving material increases in underlying earnings (EBIT) compared to the first half of last year, and the group continues to generate strong operating cash flows. Net debt was ahead of the board’s expectations at £15.7mln (31 December 2017: net cash of £1.0mln).
"LTG continues to make excellent progress,” said Jonathan Satchell, the chief executive of LTG.
“I am delighted to see a significant increase in recurring revenues, broadening of our international footprint and deepening of our client base as we continue to evolve,” he added.
“The first half of 2018 saw the transformational acquisition of US-based software platform PeopleFluent, and we are already seeing the complementary potential of PeopleFluent and our prior acquisition NetDimensions,” Satchell said.
Shares in Learning Technologies, which ended last year at 68p, were down 5.5p today at 102.5p.
House broker Numis Securities thinks they are worth 132p, up from its previous price target of 130p to take into account a slightly lower debt situation.
“Net debt was considerably better than our forecast, with net debt finishing the period at -£15.7mln (NSe -£28.5mln) aided by FX [foreign exchange] movements around the closing of the PeopleFluent acquisition,” Numis said.
The group will give an update on the integration of PeopleFluent and the alignment of accounting policies at the interims in September.