Learning Technologies Group (LTG) H1 2024 earnings summary

Executive summary

• Revenue declined 3.8% organically at constant currency in H1 2024, reflecting a challenging macroeconomic environment and lower transactional/project revenues, especially in the US market.

• Adjusted EBIT increased by up to 5% year-over-year to £43.3m, with margin improving to 17.3% from 15.1%–15.3%, driven by cost control and commercial transformation.

• All contracts above $5 million were renewed in H1, demonstrating strong customer loyalty, with growth in LATAM and Leadership divisions.

• Continued investment in AI and R&D, with early positive feedback from paid pilots and new product rollouts.

• Portfolio simplification continued with the sale of Vector for $50m and Lorien for £16.8m, sharpening focus on core learning and talent development.

Financial highlights

• H1 2024 revenue was £250.3 million, down 3.8% organically at constant currency from H1 2023; Content & Services down 2.9%, Software & Platforms down 5.9%.

• Adjusted EBIT rose to £43.3 million (17.3% margin), up 200 basis points from the prior year.

• Free cash flow reached £29.9 million, up from £5.6 million in H1 2023, aided by disposals.

• Adjusted diluted EPS for continuing operations increased by 6%–6.2% year-over-year to 3.496p.

• Net debt reduced to £57.5m at June 2024, further reduced to near zero post-Vector disposal and voluntary debt repayment; leverage at 0.5x.

Outlook and guidance

• FY 2024 revenue guidance adjusted to £473–£493m and adjusted EBIT to £86–£91m, reflecting FX headwinds and softer expectations for GP Strategies in H2.

• Board expects results toward the lower end of guidance due to current trading, especially at GP Strategies.

• Adjusted effective tax rate expected at ~27%; full-year finance charge net c5.5% on gross debt.

• Dividend held flat at 0.45p, with optionality for the final dividend.

• Expectation for ARR growth in Open LMS and stabilization in PeopleFluent, with AI investments aimed at improving retention.