quickwin casino Continued challenging macro backdrop
Learning Technologies Group plc, a global market leader in digital learning and talent management, announces half year results for the six months ended 30 June 2024. All figures relate to that period unless otherwise stated.
Strategic and operational highlights
- Resilient performance in a tough macroeconomic environment.
- SaaS and long-term contracts account for 76% of total revenues (H1 2023: 72%)1.
- All major clients above $5 million annual revenue that were up for renewal in H1 2024 were successfully QuickWin Casino review renewed and strong growth in LATAM and Leadership divisions of GP Strategies.
- GP Strategies profits more than doubled in the three years since acquisition, reflecting margin progression and operational improvement actions.
- Completed the sale of VectorVMS (“Vector”) for $50 million as part of ongoing initiatives to simplify our portfolio and sharpen focus on learning and talent development.
- Increased investment in AI product innovation including GP’s Content AIQ Learning Platform, Human+ AI Learning Series, Rustici Generator and Bridge Learn and Develop. Early signs of customer uptake are encouraging.
Financial highlights
- Organic constant currency revenue down 3.8% to £250.3 million, with the subdued macro backdrop affecting overall spending on learning and talent development activities, particularly in transactional and project work and softness in SaaS subscriptions:
○ Content & Services down 2.9%;
○ Software and Platforms down 5.9%. - QuickWin Casino app Continued growth in profits and margin progression on a like-for-like basis2:
○ Adjusted EBIT up 5% to £43.3 million.
○ quickwin casino Adjusted EBIT margin increased to 17.3% (H1 2023: 15.3%) as the Group benefits from the successful commercial transformation of GP Strategies and focus on cost optimisation.
○ Statutory operating profit increased 65% to £38.3 million
- Strong cash performance with cash conversion of 70%3 (H1: 65%).
- Robust balance sheet with net debt as at 30 June of £57.5 million, reduced to c.£1 million at 30 August 2024 following the disposal of Vector.
- Voluntary debt repayment of $25 million in July 2024.
US regulatory update
- GP Strategies continues to be in constant dialogue with DCSA (Defense Counterintelligence and Security Agency), and is making good progress on resolving the issues pertaining to certain approvals, however there is more work to be done.
- A new subsidiary, solely focused on all forms of US Government contracts, is in the process of being established. It is expected to become operational in H1 2025 QuickWin Casino review and has applied to be eligible to work on new classified contracts.
- No existing classified contracts are due for renewal imminently and the value of the contracts is not material in the context of total Group revenue and profit.
Dividend
- The Board is pleased to declare an interim dividend of 0.45 pence per share (H1 2023: 0.45 pence).
Current trading and outlook
- The Group previously expected revenue to be in the range of £480 million to £500 million and adjusted EBIT to be in the range of £88 to £93 million for FY 2024 (adjusting for the completion of the sale of Vector on 1 July). This range was based on an average GBP:USD rate of 1.26 for H2 2024.
- Based on an average GBP:USD rate of 1.31 for H2, the ranges adjust to £473 to £493 million of revenues and adjusted EBIT of £86 to £91 million for FY 2024 (adjusting for the completion of the sale of Vector on 1 July).
- The Board expects the Group to be towards the bottom of the range given current trading, in particular at GP Strategies
- The Board is focused on continuing to drive efficiencies whilst actively managing the portfolio to support a return to quickwin casino organic growth once market conditions improve.
Jonathan Satchell, Chief Executive Officer of Learning Technologies Group, 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.”
Financial Summary:
|
|
Continuing |
|
|
|
£m unless otherwise stated |
H1 2024 |
H1 2023 |
Change |
|
Revenue |
250.3 |
284.6 |
(12)% |
|
Revenue like-for-like4 |
250.3 |
268.2 |
(7)% |
|
Organic constant currency |
(3.8)% |
0.1% |
|
|
Software & Platforms constant currency |
(5.9)% |
(4.7)% |
|
|
Content & Services organic constant currency |
(2.9)% |
1.8% |
|
|
SaaS & long-term contracts |
76% |
72% |
|
|
Adjusted EBIT |
43.3 |
43.1 |
0.5% |
|
quickwin casino Adjusted EBIT margin |
17.3% |
15.1% |
+220bps |
|
Adjusted EBIT like-for-like2 |
43.3 |
41.1 |
+5% |
|
quickwin casino Adjusted EBIT margin like-for-like2 |
17.3% |
15.3% |
+200bps |
|
Statutory operating profit |
38.3 |
23.2 |
+65% |
|
Statutory PBT |
34.0 |
16.5 |
106% |
|
Adj. Diluted EPS (pence) |
3.496 |
3.293 |
6% |
|
Basic EPS (pence) – continuing & discontinued |
3.363 |
1.376 |
144% |
|
Net Debt / (Cash) |
57.5 |
108.4 |
(47)% |
|
Dividend (pence) |
0.45 |
0.45 |
0% |
NOTES
1. Proportion of total revenues that are SaaS or long-term contracts increased to 76% although there was a slight decline in revenue in absolute terms to £191.4 million.
2. Excluding TTI Global Staffing contracts and Lorien Engineering disposed of in 2023 & 2 Jan 2024 respectively, at 1.23 average H1 2023 USD/GBP FX.
3. Adjusted operating cash flow as a percentage of adjusted EBIT. Adjusted operating cashflow is cashflow in the period after accounting for operating activities and capital expenditure.
4. Excluding TTI Global Staffing contracts and Lorien Engineering disposed of in 2023 & 2 Jan 2024 respectively, and reclassification of pass-through revenue, at 1.23 average H1 2023 USD/GBP FX.