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Learning Technologies hikes interim dividend as earnings surge 134%

The digital learning specialist reported that adjusted earnings were ahead of expectations at £19.4mln, while revenues surged 85% to £62.6mln

Learning Technologies Group plc - Learning Technologies hikes interim dividend as earnings surge 134%

Learning Technologies Group PLC (LON:LTG) has hiked its interim dividend after earnings for the first half of its financial year jumped 134%.

For the six months ended 30 June, the AIM 100 digital learning specialist reported adjusted earnings (EBIT) were ahead of expectations at £19.4mln, up from £8.3mln in the prior year, while revenues surged 85% to £62.6mln.

WATCH: Learning Technologies CEO hails 'outstanding margins and cash generation' in first half

The amount of recurring revenue also rose to 74% of the total from 51% in 2018, with the adjusted EBIT margin increasing to 31.1% from 24.5%.

Revenues had been boosted by 7% organic growth from LTG’s software & platforms division, which makes up 68% of the total, offsetting a 3% contraction from the content & services arm.

The company also boasted of “strong cash generation”, with net debt falling to £13.9mln from £15.7mln in the period; since then, it has fallen further to £7.8mln.

As a result of the improved results, the firm hiked its interim dividend 67% to 0.25p per share.

Looking ahead, LTG said trading for the full year was currently in line with expectations, with content & services expected to report 8% organic growth in the year despite its first-half dip.

Jonathan Satchell, the company’s chief executive, added that the firm’s PeopleFluent business was expected to “return to growth in 2020”, while BreezyHR, a US firm its bought for US$30mln in April, was achieving “significant growth”.

Satchell also said current trading provided “great confidence” for the rest of the year, and that LTG was investing in its second half to “drive sales further” and support organic growth initiatives.

In a note, analysts at Peel Hunt said the results had shown LTG was “on track for all divisions” and that moving into its 2020 financial year the focus would be on whether growth could be delivered from the PeopleFluent business.

They also estimated that the company would “move back into net cash” at the end of the current year, which would support acquisitions in 2020.

Peel Hunt rates LTG with a ‘buy’ rating and 150p target price.

In mid-morning trading on Monday, LTG shares were 3.3% lower at 118p.

--Adds broker comment and share price--

Quick facts: Learning Technologies Group plc

Price: 117.6 GBX

AIM:LTG
Market: AIM
Market Cap: £785.97 m
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Learning Technologies 'extremely pleased' with integration of PeopleFluent

Jonathan Satchell, chief executive of Learning Technologies PLC (LON:LTG), discusses with Proactive Investors the group's first half update. He's expecting revenues, excluding the PeopleFluent business acquired in May, will be at least £27.3mln for the first half of 2018 compared to...

on 26/7/18

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