Acquisitions underpin full-year growth for Learning Technologies

The AIM-traded firm said statutory profit before tax was 334% higher in 2022, at £40.5m.

Proforma constant currency organic revenue growth for the year was 5%, while organic revenue was up by 3%.

The company said it achieved its margin targets for GP Strategies, with an average of 12% and a fourth quarter exit rate of 14%, which was a significant increase compared to pre-acquisition levels of around 5%.

LTG also reported an efficient cash conversion of 82%, resulting in swift deleveraging despite the strength of the dollar, with net debt of £119.8m at the end of 2022.

The firm said its strong balance sheet supported its ability to make accretive acquisitions based on its long-term strategy.

Its board said it was committed to a progressive dividend policy, proposing a final dividend of 1.15p - an increase of 64% year-on-year - leading to a full-year dividend of 1.6p, which would be 60% higher than 2021’s total distributions.

Despite a more challenging macroeconomic environment, LTG said it had seen moderate revenue growth in the first quarter of 2023, and expected to deliver high single-digit adjusted EBIT growth in the year, supported by a strong pipeline.

The pipeline included a number of significant long-term contracts for GP Strategies that were at an advanced stage.

It said it was also expecting further margin improvements in the second half from the next phase of the integration of GP Strategies.

LTG said it was on track to meet its goal of £850m run-rate revenues and £175m run-rate adjusted EBIT by the end of 2025.

“2022 was a transformational and successful year for LTG - we have delivered a step-change in our scale, more than doubling revenues and almost doubling profits,” said chief executive officer Jonathan Satchell.

“We also focused on our core priorities of organic growth, margin improvement in the businesses we acquired and excellent cash generation.

“Our progress reflects the successful integration of GP Strategies, which has broadened and strengthened our offering to help us pursue the $100bn addressable market for digital learning and talent management.”

Satchell said the company’s “resilient model”, with high levels of recurring revenues from diversified end markets, combined with cross-selling opportunities from its greater scale - supported the firm’s confidence of further progress in 2023.

“We remain confident of meeting our goal of £850m run-rate revenues and £175m run-rate EBITDA by the end of 2025.”

At 0834 BST, shares in Learning Technologies Group were down 12.5% at 114.28p.

Reporting by Josh White for Sharecast.com.