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Learning Technologies surges on back of 'material' improvement in earnings

Revenues for the first six months of the year are expected to rise 85% and adjusted earnings by 125%

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The Content & Services arm returned to growth with a significant increase compared to the second half of last year

Learning Technologies Group PLC (LON:LTG) said full-year underlying earnings are likely to be “materially ahead” of market expectations after a strong first half for sales and profits.

Revenues for the first six months of the year are expected to come out at around £62.5mln, up 85% on this time last year, with adjusted earnings before interest and tax (EBIT) up 125% to no less than £20mln.

READ: Goldman Sachs thinks Learning Technologies' shares could see around 50% upside potential over 12 months

With sales surging and EBIT margins increased to circa 32% from 26.3%, the board expressed its confidence that full-year adjusted EBIT will be materially ahead of current expectations.

The two parts of the business are both enjoying growth, with the larger Software & Platforms segment contributing “strong” organic revenue growth and boosted by the acquisition of human resources and learning specialist PeopleFluent in May last year, which also significantly boosted recurring revenues. 

A return to growth for the Content & Services with a significant increase compared to the second half of last year plus a multi-million dollar contract win for LEO in the US pointed the way to “substantial organic growth” in the second half.

“LTG's outstanding margins and cash generation provide additional capacity to invest in further sales growth in the second half of the year, and pursue a number of new initiatives to augment organic growth into 2020,” said chief executive Jonathan Satchell, adding that the board was considering “a number” of acquisition opportunities. 

Shares in LTG surged 18% higher to 111p on Monday morning, their highest level since November.

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Quick facts: Learning Technologies Group plc

Price: 113.37 GBX

AIM:LTG
Market: AIM
Market Cap: £7.56 m
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Learning Technologies CEO hails 'outstanding margins and cash generation' in...

Learning Technologies Group PLC's (LON:LTG) Jonathan Satchell talks Proactive London's Andrew Scott through the firm's first half 2019 update. He expects full-year underlying earnings to be “materially ahead” of market expectations after a strong first half for sales and...

on 23/7/19

2 min read