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Summary
- Learning Technologies Group Plc had anticipated achieving FY20 revenue of around £131.0 million.
- LTG is expected to complete the acquisition of Bridge on 26 February 2021.
- LTG had a net cash position of £70.2 million as of 31 December 2020.
- LTG had acquired UK-based PDT Global for £13.2 million on 05 February 2021.
Learning Technologies Group Plc (LON:LTG) is the LSE listed technology stock. LTG’s shares have generated a return of about 9.03% in the last 12 months. It is listed on the FTSE AIM UK 50 Index. It was incorporated in 2010.
On 25 March 2021, LTG will announce its full-year FY20 results.
Business Model
Learning Technologies Group is the leading provider of learning and talent-related software and services to corporate customers all around the world. LTG’s offices are present in Europe, North America, South America, and Asia-Pacific. The Company has two reportable business segments:
- Software and Platforms – It represented 76% of LTG’s revenue.
- Content & Services – accounted for the remaining 24% of total revenue.
(Source: Company website)
Acquisitions History
The brief acquisition history of LTG is shown below -
(Source: Company presentation)
Recent News
On 15 February 2021, LTG had announced that it would acquire getBridge LLC for around USD 50.0 million. The Bridge has its operations in Hungary and the UK and is a skill development platform for mid-level firms. Bridge has delivered FY20 revenue of USD 21.0 million, with more than 800 customers. This deal is expected to be completed on 26 February 2021.
On 08 February 2021, LTG had acquired UK-based PDT Global for £13.2 million. The deal was completed on 05 February 2021, and it would bring synergy by expanding the global reach of LTG’s Affirmity business.
On 01 February 2021, LTG had completed the acquisition of Reflektive Inc for a cash consideration of USD 14.2 million. This acquisition would achieve flagship engagement and analytics tools.
FY20 Trading Update (as of 22 January 2021)
- The Group had anticipated FY20 revenue to remain marginally higher than the levels achieved in FY19 and estimated it to be approximately £131.0 million.
- The recurring revenues for FY20 stood at 80% of the total revenues, which is more than recurring revenue of 74% during FY19. The increase was due to expansion of business through the acquisition of eThink Education, eCreators and Open LMS.
- The business performance of its Content & Services division was impacted by Covid-19 pandemic during FY20.
- On the profitability front, the adjusted EBIT was anticipated to remain at around £40.0 million during FY20, illustrating resilient financial performance despite widespread disruptions caused by Covid-19 pandemic.
- LTG had a net cash position of £70.2 million as of 31 December 2020 due to robust cash conversion and net cash balances achieved through the acquisitions of eCreators and eThink.
H1 FY20 Financial Highlights (for six months period ended 30 June 2020, as of 22 September 2020)
(Source: Company result)
- LTG had delivered a revenue surge of approximately 2.0% from £62.6 million during H1 FY19 to £64.1 million for H1 FY20. The recurring revenue contribution remained at around 81% during the period.
- The Software & Platforms division revenue went up by 13.0%, and Content & Services division revenue slumped by 22%.
- LTG had a net cash position of £77.8 million during H1 FY20 whereas it had a net debt of £13.9 million for H1 FY19. The turnaround was due to successful fundraising activity completed in May 2020.
- During H1 FY20, the adjusted diluted earnings per share of LTG stood at 2.25 pence.
- The Company had reported a decline of 5% in its adjusted EBIT during the period.
- LTG had paid H1 FY20 interim dividend of 0.25 pence per share and FY19 final dividend of 0.50 per share on 30 October 2020.
Share Price Performance Analysis of Learning Technologies Group Plc
(Source: EODHD/Others, chart created by Kalkine group)
Shares of Learning Technologies Group Plc were trading at GBX 175.20 and were up by close to 1.45% against the previous closing price as on 15 February 2021, (before the market close at 10:35 AM GMT). LTG's 52-week Low and High were GBX 106.20 and GBX 190.00, respectively. Learning Technologies Group Plc had a market capitalization of around £1.28 billion.
Business Outlook
LTG is on the verge of completing its seventh acquisition deal since the £81.8 million fundraising activity completed in May 2020. The Company had anticipated revenue of around £230 million and adjusted EBIT of approximately £66 million for FY22. LTG would continue to seek lucrative expansion opportunities which align with its strategic objectives. The Group has an impressive pipeline of several acquisition deals across both business divisions - Software & Platforms and Content & Services. LTG had accelerated its progress towards digital learning and talent management during FY20.
