Good morning, it's Paul here.

Apologies for last week's poor service from me. Let's get this show back on the road.

Learning Technologies (LON:LTG)

Share price: 93.8p (pre market open)
No. shares: 667.8m
Market cap: £626.4m

Half year trading update

Learning Technologies Group plc, provider of services and technologies for digital learning and talent management, announces the following trading update for the six months to 30 June 2019.

This acquisitive group was the subject of a shorting dossier c. Feb 2019. I've checked through the archive here, and can only find a brief mention from me here on 12 Feb 2019 saying that I thought the shorting dossier looked weak. I can remember printing it off, and struggling to read it by candlelight, in a rather dark local Italian restaurant! The crux of the shorting dossier was that the operating margin looked too high, and was likely to fall.

How wrong that looks today. There's a cracking update out today;

For the first half of the year, the Board expects Group revenues to be approximately £62.5 million (H1 2018: £33.8 million), an increase of c.85%

Adjusted EBIT is anticipated to be ahead of expectations at not less than £20.0 million for the first half of 2019 (H1 2018: £8.9 million), representing an EBIT increase of c.125% and EBIT margin increase from 26.3% to c.32.0%.

The Board is confident that full-year adjusted EBIT will be materially ahead of current market expectations.

That seems to have comprehensively blown the shorters out of the water!

More detail is given, with one point about net debt of £13.9m looking modest.

My opinion - I actually bought some of this share, after the shorting attack had pushed the price down, as it looked good value. What a pity I didn't hang on to them, as the price is up about 50% since then (in 6 months).

The PER is currently about 23, but with forecasts now bound to increase, that should fall back somewhat (maybe to about 20?). Not cheap on a value basis, but a not unreasonable price to pay for a growth company that is exceeding expectations.

The operating profit margin of 32% is exceptionally high. Is that sustainable long term?

I imagine the share is likely to rise again today, perhaps 100p+ is on…

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