22nd Jul 2019 08:59
(Alliance News) - Learning Technologies Group PLC on Monday said it expects a very sharp revenue increase for the first half of the year and expects annual adjusted earnings to be "materially ahead" of market expectations.
Shares in Learning Technologies were up 16% at 109.00 pence in morning trade.
For the six months to June 30, the digital learning and talent management technology and services firm is expecting a roughly 85% increase in revenue to around GBP62.5 million from GBP33.8 million the year before.
Approximately 67% of Learning Technologies revenue in the first half will be from recurring contracts, compared to 51% year-on-year, due to the company's acquisition of PeopleFluent Holdings Corp in May 2018.
The increased PeopleFluent revenue was also aided by a retention rate for its software licences that surpassed expectations, which puts PeopleFluent "on track to return to growth in 2020".
Moreover, adjusted earnings before interest and taxation for the first half is to be at least GBP20.0 million, more than twice the GBP8.9 million recorded for the first half of 2018, equating to an Ebit margin increase to 32% from 26%.
Learning Technologies also expects its annual Ebit to rise, and said its board is "confident that full-year adjusted Ebit will be materially ahead of current market expectations".
Net debt is GBP13.9 million, rising from GBP11.5 million at the end of 2018 following Learning Technologies' acquisition of Breezy HR in April 2019 for an initial GBP8.8 million in cash plus a GBP2.3 million final dividend payment and a final GBP2.8 million contingent payment for Rustici Software LLC, which the company acquired in 2016.
Chief Executive Jonathan Satchell said: "I am particularly delighted by the sales momentum in our Content & Services division that has built over the last nine months. Our Software & Platforms division continues to go from strength-to-strength.
"[Learning technologies'] 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. We continue to consider a number of very interesting acquisition opportunities that would meaningfully enhance the group.
"This strong H1 performance underpins the board's confidence that full-year Ebit will be materially ahead of expectations."
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