Learning Technologies (LTG) proved that its significant sales uplift wasn’t down to acquisitions alone, with revenue up by a third on an organic basis. What's more, recurring revenue represented 37 per cent of the overall top line during the period, up from 24 per cent in the previous comparable period. But the adjusted cash profit margin slipped, from 23 per cent to 19.2 per cent, due to the dilutive effect of NetDimensions, acquired in March.
But NetDimensions, a Hong Kong-based learning management system provider, has been integrated according to plan. Most of the targeted $8m (£6.2m) in annualised incremental operating profit benefits have been realised. Management expects the business’s integration will mean better margins in the second half.
While the group’s Civil Service Learning contract progressed well and has been extended by a year into 2019, its ‘Preloaded’ business – offering 'games with purpose' – also showed encouraging momentum. Management noted its virtual reality simulation work, citing an upcoming project for Tate Modern’s Modigliani exhibition.
Also notable was the rising proportion of company revenues derived from outside the UK, up from 32 per cent to 46 per cent. US dollar sales provide a natural hedge against borrowings and interest payments denominated in the greenback.
Analysts at broker Numis upgraded its forecasts for full-year pre-tax profit from £10m to £11.3m, giving EPS of 1.65p. That's up from £6.4m and 1.2p in 2016.
| LEARNING TECHNOLOGIES (LTG) | ||||
| ORD PRICE: | 50p | MARKET VALUE: | £284m | |
| TOUCH: | 50-51p | 12-MONTH HIGH: | 56p | LOW: 30p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 13p* | NET DEBT: | 13%** | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax loss (£m) | Loss per share (p) | Dividend per share (p) |
| 2016 | 12.8 | -0.94 | -0.13 | 0.07 |
| 2017 | 21.5 | -1.90 | -0.39 | 0.09 |
| % change | +68 | - | - | +29 |
| Ex-div: | 5 Oct | |||
| Payment: | 27 Oct | |||
| *Includes intangible assets of £87m, or 15p a share **Adjusted for effect of NetDimensions acquisition | ||||
