Learning Technologies Group PLC (AIM:LTG) said its first-quarter acquisitions have been fully integrated and are achieving substantially improved profit margins.
The digital learning and talent management company said trading in the first quarter of the year was strong and in line with management’s expectations.
In its results statement for 2021, the company upgraded its margin expectations for the current year (2022) after a swifter-than-anticipated improvement in the margins of GP Strategies, the workforce transformation specialist it acquired in October 2021.
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Management said it expects a GP Strategies' adjusted EBIT (earnings before interest and tax) margin of 12% in 2022 and remains confident there is further margin improvement potential for the business beyond this, such that it expects the run-rate adjusted EBIT margin at the end of 2022 to be in the mid-teens.
While mindful of the current macro environment, the company said it is confident of making significant progress in 2022.
As for 2021, the company released a detailed trading statement a week ago that contained the highlights, which included a 95% year-on-year increase in revenue to £258.2mln, a 36% jump in adjusted EBIT to £54.8mln, a decline in the EBIT margin to 21.2% from 30.5% in 2020 and a proposed 40% hike in the final dividend to 0.7p.
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Profit before tax in 2021 slipped to £9.3mln from £13.5mln the year before.
The group ended the year with net cash of £141.4mln compared to net debt a year earlier of £70.2mln.
"2021 was another exciting and successful year for LTG [Learning Technologies Group]. Our strong organic revenue growth reflects the pressing and growing need for organisations to recruit, train, motivate and retain talent and LTG's ability to meet these demands. We have also continued our track record of improving the operating model and performance of businesses we acquire,” said Jonathan Satchell, the chief executive of LTG.
“Our transformational GP Strategies' acquisition is progressing ahead of plan and enables us to upgrade our margin expectation for FY 2022. The enlarged group provides a platform to capture a greater proportion of the circa US$100 billion and growing addressable market in digital learning and talent management. Following the acquisition we have a deeper offering to serve a global customer base facing greater complexity and change, creating further margin enhancement and cross-sell opportunities for LTG,” he added.