What Learning Technologies does
Learning Technologies Group PLC (LON:LTG) operates in the fast-growing workplace digital learning and talent management market.
Working across recruitment, performance, learning, compensation, diversity and inclusion, compliance, succession, engagement and technical integration, the firm enables corporate and government clients to keep up with the increasing speed of change in the digital world.
Most of LTG's business comes from the US, the UK and Europe, although it also has some operations in territories such as Australia.
The group comprises a Software and Platforms division which typically sells multi-year SaaS (software-as-a-service) licences which enjoy high customer retention rates.
LTG’s Content & Services division typically delivers shorter-term, fixed price projects to clients.
How it's doing
The firm made a strong start on the acquisition trail in 2021, snapping up San Francisco-based performance management software provider Reflektive Inc for US$14.2mln (£10.4mln) in cash.
This was followed in February by the purchase of PDT Global, a UK-based provider online of diversity & inclusion (D&I) training solutions, for an initial cash sum of £13.2mln.
The trend continued in March with the completed acquisition of learning and talent development software provider getBridge for US$50mln (£36mln) using the firm's existing cash resources.
In an outlook statement accompanying its results for 2020, the company said it expects a “strong recovery” in its content and services division as trading in 2021 began in line with expectations.
The firm said it had seen “excellent momentum in sales in the past six months” which is expected to help boost its recovery, adding that it expects spending by corporates on its solutions to increase in 2021 and beyond as the impact of pandemic lockdowns began to ease, adding that it is also integrating recent acquisitions and “continuing to pursue an exciting pipeline of further opportunities”.
In the numbers for 2020, LTG reported a pre-tax profit of £13.5mln, compared with £14.3mln in the prior year, while revenues rose 2% to £132.3mln.
The company also noted its “high quality of earnings” with recurring revenues rising to 81% of the total from 74% in 2019, while its adjusted (EBIT) margins were maintained above 30%.
LTG also maintained its final dividend at 0.5p per share despite the impact on the business from the Coronavirus pandemic.
What the boss says: Jonathan Satchell, chief executive
"LTG delivered a resilient financial performance in 2020, building recurring revenues while maintaining EBIT margin against a challenging macroeconomic backdrop. Our balance sheet strength was bolstered by an £82mln equity placing to accelerate our future growth and we have used that capital to good effect with acquisitions that extend our capabilities and scale in the global market for digital learning and talent management.”
“In light of the year gone by, we placed an added importance on delivering for all stakeholders, with a particular focus on our environmental, social and governance responsibilities and those of our clients. We are proud that our people and technology are able to reduce the environmental impact of thousands of organisations and improve workplace equality for millions of people. LTG enters 2021 with organic growth momentum, supported by a more diversified business and enhanced capabilities to capture long term structural growth opportunities."
Interview
What the broker says
In a note on March 25, analysts at Peel Hunt reiterated their 'buy' rating and 225p target price on the stock, saying that they expected 2021 to be "a year focused on growing the core business after a period of intense M&A".
The broker added that they believed the group was "making strong progress to achieving their FY22 financial targets".