Learning Technologies marks profits higher after transformational year

Learning Technologies revealed profits last year were better than expected as a US acquisition significantly outperformed and a contract to provide training to the entire UK civil service began to transform the e-learning group's prospects.

Revenues from the civil service contract began to accrue in 2016 and will grow "significantly" in 2017 onwards.

AIM-listed Learning Tech said profit margins before interest, tax, depreciation and amortisation margins were "firmly ahead" of its strategic ambition of 20% on top of annual recurring revenues being upped to around 27% from 10% the previous year.

Boosted by the January 2016 acquisition of Rustici Software in the US, revenues generated outside of the UK have tripled to roughly 36% of the group's total.

Chairman Andrew Brode said the revenues from Rustici and the civil service contract, the largest the group has ever undertaken, "will have a transformational impact on profits in 2017 and beyond".

Cash generation was "strong" though the significant operational investment meant there was a year-end net debt of £8.5m.

"LTG has made great strides in delivering on its strategic objectives to create an international e-learning business of scale," Brode said.

"EBITDA margins are now firmly in the mid twenties, underpinned by strong recurring revenues and expansion of sales outside our core UK market, and we have entered the new financial year with significant momentum.

"The board is confident of delivering further strong performances given the Group's industry leading capabilities in a fast growing sector."

Shares in LTG shot up to 44p in early trade on Tuesday, the highest since the company was formed through a reverse takeover by In-Deed Online in 2013.