Learning Technologies beats earnings expectations for 2019

The AIM-traded firm said recurring revenues increased to around 73% of total revenues, from 68%, driven by “strong” ongoing performance in the software and platforms division, a full-year contribution from ‘PeopleFluent’ and ‘Watershed’, and the acquisition of ‘BreezyHR’ in April.

Excluding PeopleFluent, Learning Technologies said it delivered organic revenue growth on a constant currency basis in both the software and platform, and content and services divisions for the year ended 31 December.

PeopleFluent delivered revenues of around $93m in 2019, ahead of previously-announced expectations of $91m, which the board said was supported by a “significantly improved” retention rate for its software licences and a “good” sales performance by ‘Affirmity’.

That underscored the board's confidence that, as guided at the time of the acquisition in 2018, PeopleFluent would return to growth in 2020.

Adjusted EBIT was expected to be “comfortably ahead” of market expectations at no less than £41m, up 58% year-on-year, primarily as a result of a continued trend of improved margins across the group and synergies being realised from the successful integration of acquisitions.

The group said its net cash position at 31 December of £3.8m, swinging from net debt of £11.5m, was better than anticipated due to “substantial” cash generation in the second half.

Learning Technologies said an active pipeline of “attractive” international acquisition opportunities in both software and platforms, and content and services, supported its ambition to further consolidate the high-growth corporate learning and talent market.

“2019 has been a year of encouraging growth across the group with a strong performance in content and services in the second half of the year and outstanding results from our innovative software and platform businesses such as BreezyHR, Rustici and Watershed complementing our established PeopleFluent talent and learning business,” said chief executive officer Jonathan Satchell.

“We are seeing the early successes of the board's decision to make focussed investments in research and development and incremental sales initiatives to support sustainable organic growth, driving momentum into 2020.

“In 2019, the group continued its track record of delivering strong margins, benefiting from enhanced leadership positions in our key markets.”

Satchell said Learning Technologies had proven that it could successfully integrate, improve and grow the businesses it acquired, delivering “excellent value” for shareholders and “comprehensive, innovative and industry-leading” capabilities and services for its clients.

“We have an active pipeline of acquisition opportunities in 2020 and continue to invest in cross-selling initiatives and explore new routes-to-market.”

Learning Technologies said it was expecting to announce its full-year results for 2019 on 24 March.

At 0929 GMT, shares in Learning Technologies were up 15.12% at 158.4p.