Learning Technologies Group PLC Trading Update (1284E)
July 14 2016 - 2:00AM
UK Regulatory
TIDMLTG
RNS Number : 1284E
Learning Technologies Group PLC
14 July 2016
14 July 2016
Learning Technologies Group Plc
Trading Update
Learning Technologies Group plc ("LTG" or "the Group"), the
leading e-learning company, issues the following trading update for
the half year ending 30 June 2016:
The Board is pleased to report significant progress during the
first half of 2016. We continued to strengthen margins while making
excellent progress in delivering on our strategic ambition of
building an international business with revenues in excess of GBP50
million and delivering profits in line with expectations.
In December 2015 we announced that, alongside our strategic
partner KPMG UK LLP, LTG had won a landmark contract to design and
deliver blended courses that incorporate a combination of digital,
informal and classroom components for the entire UK Civil Service
('CSL'). We have already created a substantial number of learning
components and will have delivered the entire library by the
year-end. We expect to see revenues begin to accrue in Q4 2016 with
the majority of returns expected in 2017 and 2018.
In January 2016 we announced the acquisition of Rustici Software
LLC ('Rustici') in the US, the acknowledged global leader in
digital learning interoperability, which enables online learning
content and management systems to communicate and work together.
Rustici has substantial recurring revenues and has performed ahead
of our expectations in the first half of 2016.
In the same month the Group also made a 27% investment in
Watershed Systems Inc ('Watershed'). Watershed has developed a
SaaS-based learning analytics capability, which evaluates the
impact and effectiveness of learning programs. Although at an early
stage of development, Watershed is making excellent progress,
signing up a number of global clients and generating compelling and
objective insights into the effectiveness of e-learning
interventions.
LTG has maintained strong operating cash flows, whilst investing
in the upfront costs of the CSL project. At 30 June 2016 gross cash
was GBP4.3 million (31 December 2015: GBP7.3 million). As part of
the financing of the Rustici acquisition the Group entered into a
USD20 million, three year term loan. At 30 June 2016 net debt was
GBP9.9 million (31 December 2015: net cash of GBP7.3 million).
While it is too early to identify any potential implications
from the UK's likely exit from the European Union, we are confident
that our strategic ambitions will ensure continued progress.
Approximately 32% of LTG's business is undertaken for clients
outside of the UK and a growing percentage of LTG's revenues are
denominated in USD and Euros. Net USD cash inflows are used as an
approximate internal hedge against the USD loan capital and
interest repayments and, therefore, the business' overall exposure
to exchange rate volatility is limited.
The Group continues to pursue acquisition opportunities
particularly in the US and UK. We are also pleased that margins
have strengthened further through improved working practices and
increased scale, and the Board is optimistic about the prospects
for LTG in H2 2016.
Andrew Brode, Chairman of LTG, said:
"LTG has made significant progress in the first half of 2016.
With the acquisition of Rustici and investment in Watershed in
January, LTG is delivering on its ambition to build a diversified
international learning technology business of scale."
"The Group continues to invest in its industry leading portfolio
of learning technologies and service offerings and the Board is
optimistic about the prospects for LTG in the second half of 2016
and beyond."
Enquiries
Learning Technologies Group
plc +44 (0)1273 468 889
Jonathan Satchell, Chief
Executive
Neil Elton, Group Finance
Director
Numis Securities Limited +44 (0)20 7260 1000
Stuart Skinner / Michael
Wharton (Nominated Adviser)
Ben Stoop (Corporate Broker)
Hudson Sandler Limited +44 (0)20 7796 4133
Cat Valentine / Katie Matthews
This information is provided by RNS
The company news service from the London Stock Exchange
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July 14, 2016 02:00 ET (06:00 GMT)