Learning Technologies (LTG) delivered a strong half-year performance, in keeping with July’s better-than-expected trading update. Recurring revenues constituted almost three-quarters of the group’s top line – up from half – thanks largely to the purchase of talent management platform PeopleFluent in May 2018. The acquired business had endured declining sales for many years, because of low client retention rates, but under LTG’s ownership, it is now hitting its targets and is poised to return to growth in 2020.
Excluding PeopleFluent, LTG’s software and services division enjoyed a 7 per cent uptick in organic revenues, offsetting a 3 per cent contraction from the smaller content and services business. That said, the latter still represented progress against the 8 per cent decline reported over 2018 and management expects the segment to deliver an organic improvement of around 8 per cent for 2019, helped by product cross-selling.
Adjusted operating profits of £19.4m were slightly below the £20m guided towards two months ago, but that is because the official numbers reflect the implementation of new lease liability accounting rules and share-based payments.
House broker Numis forecasts adjusted EPS of 4.1p for 2019, up from 3.1p in 2018.
| LEARNING TECHNOLOGIES (LTG) | ||||
| ORD PRICE: | 113p | MARKET VALUE: | £758m | |
| TOUCH: | 113-114p | 12-MONTH HIGH: | 167p | LOW: 59p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 78 | |
| NET ASSET VALUE: | 26p* | NET DEBT**: | £0.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 33.8 | 1.3 | 0.2 | 0.15 |
| 2019 | 62.6 | 6.8 | 1.0 | 0.25 |
| % change | +85 | +422 | +358 | +67 |
| Ex-div: | 17 Oct | |||
| Payment: | 8 Nov | |||
*Includes intangible assets of £244m, or 37p a share **Net debt does not include £13.1m in lease liabilities | ||||
