Learning Technol.Grp - Full year trading update
24/01/2025 14:02
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RNS Number : 6659U Learning Technologies Group PLC 24 January 2025
24 January 2025
Learning Technologies Group plc
("LTG", the "Group" or the "Company")
(AIM: LTG)
Full year trading update and update on Affirmative Action and DEI in USA
Learning Technologies Group plc, a global market leader in digital learning
and talent management, announces a trading update for the year ended 31
December 2024 and an outlook for 2025. All figures relate to the year ended 31
December 2024 unless otherwise stated.
The Board expects to deliver Group Revenues for continuing operations of not
less than £485 million, within the range of £473 million to £493 million
stated in LTG's half year results on 17 September 2024(1). Revenues declined
by c.5% on an organic constant currency basis as ongoing macroeconomic,
political and AI uncertainty continued to affect customer budgets for LTG's
technologies and services.
The Board anticipates Adjusted EBIT for continuing operations to be not less
than £86 million. As previously indicated in LTG's trading update included in
the Scheme document of 20 December 2024, this is at the lower end of the range
stated on 17 September 2024. Adjusted EBIT margin is expected to be c.17.7%
(2023: c.17.3%(2)).
The Group had net cash of £3.0 million at 31 December 2024, a significant
improvement on net debt of £78.6m as at 31 December 2023. The net cash
position reflects LTG's strong cash generation and the post-tax proceeds of
the sale of Vector.
Update on Affirmative Action and DEI in USA
On 21 January 2025, President Trump rescinded Executive Order 11246, which
since 1965 had imposed Affirmative Action planning obligations on federal
contractors in addition to non-discrimination requirements. As a result of
this order, corporations in the US who are servicing federal contracts will
no longer have to comply with Affirmative Action requirements from Q2 2025.
Affirmity, a business wholly owned by LTG, provides software and services that
assist US clients to comply with such Affirmative Action planning regulations.
We expect some corporate clients to continue using Affirmity's services and
other clients to significantly reduce or no longer take those services.
Under this new Executive Order non-discrimination obligations still exist, and
we expect to be able to continue to assist our clients with those and other
data requirements. While it is too early to quantify the exact impact of this
change, we expect President Trump's Executive Order to have a highly material
impact on Revenue and Adjusted EBIT at Affirmity for 2025 and beyond, which
generated c.$21m and c.$10m respectively in 2024. We are actively assessing
how to meet the evolving needs of Affirmity's extensive customer base and will
update the market as the situation becomes clearer.
GP Strategies US Regulatory Update
As a US company that performs work for the US Government, GP Strategies
requires certain approvals and is subject to restrictions intended to protect
classified information. In July 2024, LTG was notified by GP Strategies of the
invalidation ("temporary suspension") of the eligibility for GP to work on new
classified contracts.
The GP Strategies executive team continues to be in constant dialogue with the
DCSA (Defense Counterintelligence and Security Agency) and is making good
progress on resolving the issues pertaining to certain approvals, with full
resolution our key objective. A new subsidiary, solely focused on all forms of
federal US Government contracts, has been established and is operational for
non-classified contracts from January 2025. It has applied for approval to
work on classified contracts and expects the application process to conclude
within H1 2025.
2025 Outlook
Ongoing macroeconomic and political uncertainty continue to affect the
decision-making of the Group's customers and reduce the budgets allocated for
LTG's technologies and services. Whilst the LTG Board remains confident in
the long-term outlook for the business, it anticipates that such headwinds
will continue to affect the performance of LTG into 2025. Excluding the impact
on Affirmity from the previously mentioned rescinded Executive Order regarding
Affirmative Action, the LTG Board expects revenue performance to be flat in
the 2025 financial year compared to 2024(3).
Recommended Acquisition of LTG by Leopard UK Bidco Limited ("Bidco")
On 4 December 2024, the board of Bidco and the Independent LTG Directors
announced that they had reached agreement on the terms and conditions of a
recommended acquisition by Bidco of the entire issued and to be issued
ordinary share capital of LTG. The Acquisition is being implemented by means
of a Court sanctioned scheme of arrangement under Part 26 of the Companies
Act.
On 15 January 2025, LTG announced that it had reached a view that it was in
the best interests of the Company and LTG Shareholders taken as a whole to
adjourn the Meetings to provide further time for discussions with LTG
Shareholders and to allow LTG Shareholders additional time to consider the
Acquisition. The adjourned Court Meeting will start at 10.00 a.m. on 6
February 2025 and the adjourned General Meeting will start at 10.15 a.m. on 6
February 2025 (or as soon thereafter as the adjourned Court Meeting shall have
been concluded or further adjourned). The Court Meeting and General Meeting
shall be held at the offices of Deutsche Numis at 45 Gresham Street, London,
EC2V 7BF.
As set out in the Scheme Document, Bidco has reserved the right to elect to
implement the Acquisition by way of a Takeover Offer as an alternative to the
Scheme (subject to the consent of the Panel and the terms of the Co-operation
Agreement).
Enquiries:
Learning Technologies Group plc +44 (0)20 7832 3440
Jonathan Satchell, Chief Executive
Kath Kearney-Croft, Chief Financial Officer
Deutsche Numis (NOMAD and Corporate Broker) +44 (0)20 7260 1000
Nick Westlake, Ben Stoop, Tejas Padalkar
Goldman Sachs International (Joint Corporate Broker) +44 (0)20 7774 1000
Bertie Whitehead, Adam Laikin
FTI Consulting (Public Relations Adviser) +44 (0)20 3727 1000
Jamie Ricketts, Emma Hall, Lucy Highland, Jemima Gurney
About LTG
Learning Technologies Group plc (LTG) is a leader in the growing workplace
digital learning and talent management market. The Group offers end-to-end
learning and talent solutions ranging from strategic consultancy, through a
range of content and platform solutions to analytical insights that enable
corporate and government clients to close the gap between current and future
workforce capability.
LTG is listed on the London Stock Exchange's Alternative Investment Market
(LTG.L) and headquartered in London. The Group has offices in Europe, North
America, South America and Asia-Pacific.
Notes
1. On 17 September 2024, LTG stated that it expected revenue to be in the range
of £473 million to £493 million with Adjusted EBIT of £86 million to £91
million for the financial year ended 31 December 2024. At that time, and
subsequently reconfirmed in a trading update on 20 December 2024, the LTG
Board commented that it expected performance to be towards the bottom of the
range given current trading, in particular at GP Strategies.
2. Like-for-like basis after excluding Lorien and TTi contracts disposed of in
2023, reclassification of pass-through revenue and H2 2023 results for Vector
disposed of on 1 July 2024, at a 1.24 FY23 average.
3. After excluding a contribution from VectorVMS' performance during the first
half of the 2024 financial year and assuming an average GBP:USD rate of 1.29
LTG DIRECTORS' CONFIRMATIONS
On 17 September 2024, LTG announced its half year results for the six months
ended 30 June 2024. As part of that announcement, the following statement
regarding the current trading and outlook for the full financial year to 31
December 2024 was published:
"The Group previously expected revenue to be in the range of £480 to £500
million and adjusted EBIT to be in the range of £88 to £93 million for FY
2024 (adjusting for the completion of the sale of Vector on 1 July). This
range was based on an average GBP:USD rate of 1.26 for H2 2024. Based on an
average GBP:USD rate of 1.31 for H2, the ranges adjust to £473 to £493
million of revenue and adjusted EBIT of £86 to £91 million for FY 2024
(adjusting for the completion of the sale of Vector on 1 July). The Board
expects the Group to be towards the bottom of the range given current trading,
in particular at GP Strategies." (the "LTG Statement").
The LTG Statement is made again today in this Part 14 (LTG Directors'
Confirmations) as per the above.
The LTG Statement was originally published before the start of the Offer
Period. The requirements of Rule 28.1(c) of the Code apply in relation to the
LTG Statement.
Basis of preparation and confirmation
The LTG Directors confirm that the LTG Statement remains valid and confirm
that the LTG Statement has been properly compiled on the basis of the
assumptions stated below and that the basis of accounting used is consistent
with LTG's accounting policies.
Assumptions
The LTG Statement was prepared on the basis of the following assumptions,
any of which could turn out to be incorrect and therefore affect the validity
of the LTG Statement:
Factors within the influence and control of the LTG Directors
● There is no material change in the operational strategy of the Group from the
date of this document.
● There will be no further acquisitions or disposals that will have a material
impact on LTG's results beyond those already announced prior to 3 December
2024.
● There is no material change to the Group's existing and prospective customer
contracts or agreements since 3 December 2024.
● There are no material strategic investments over and above those currently
planned, including the hiring of additional employees.
● There will be no change in the Group's costs over and above those currently
planned and anticipated.
● The LTG Statement does not include any impact on LTG or the Group of the
Acquisition.
● LTG's current accounting policies will be consistently applied until at least
the end of LTG's current financial year ending on 31 December 2024.
Factors outside the influence or control of the LTG Directors
● There will be no material macroeconomic change in the principal markets and
regions in which the Group operates.
● There will be no material adverse events that will have a significant impact
on LTG's financial results.
● There will be no material impact from the launch of new software products or
services, which will have an impact on customer demand and acceptance and
supply of the Group's products and services, which will have a significant
impact on LTG's financial results.
● There will be no changes in interest rates, bases of taxation, regulatory
environment or legislation that have a material impact on the Group, including
in relation to operations or accounting policies.
● There will be no material changes in customer demand for the Group's software
products or services or the competitive environment in which the Group
operates.
● There will be no business disruptions that materially affect the Group or its
partners.
● There will be no significant and sustained weakening or strengthening of
sterling against the currencies of the major territories in which the Group
operates.
● There will be no material litigation that will have a significant impact on
LTG's financial results.
Other important factors and information are contained in LTG's most recent
annual report and accounts for the 12 months ended 31 December 2023 (including
the risks summarised in the section entitled "Principal Risks and
Uncertainties"), LTG's most recent interim report for the six months ended 30
June 2024, and LTG's other periodic filings and statements are available at
https://www.ltgplc.com/.
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