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
20241. 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President Trump rescinded Executive Order 11246, which since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 20243.
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:
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Learning Technologies Group plc
Jonathan Satchell, Chief
Executive
Kath Kearney-Croft, Chief Financial
Officer
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+44 (0)20
7832 3440
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Deutsche Numis (NOMAD and Corporate Broker)
Nick Westlake, Ben Stoop, Tejas
Padalkar
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+44 (0)20
7260 1000
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Goldman Sachs International (Joint Corporate
Broker)
Bertie Whitehead, Adam
Laikin
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+44 (0)20
7774 1000
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FTI
Consulting (Public Relations Adviser)
Jamie Ricketts, Emma Hall, Lucy
Highland, Jemima Gurney
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+44 (0)20
3727 1000
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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
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1.
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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.
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2.
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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.
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3.
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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
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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
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There is no material change in the
operational strategy of the Group from the date of this
document.
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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.
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There is no material change to the
Group's existing and prospective customer contracts or agreements
since 3 December 2024.
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There are no material strategic
investments over and above those currently planned, including the
hiring of additional employees.
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There will be no change in the
Group's costs over and above those currently planned and
anticipated.
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The LTG Statement does not include
any impact on LTG or the Group of the Acquisition.
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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.
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Factors outside the influence or control of the LTG
Directors
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There will be no material
macroeconomic change in the principal markets and regions in which
the Group operates.
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There will be no material adverse
events that will have a significant impact on LTG's financial
results.
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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.
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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.
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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.
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There will be no business
disruptions that materially affect the Group or its
partners.
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There will be no significant and
sustained weakening or strengthening of sterling against the
currencies of the major territories in which the Group
operates.
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There will be no material litigation
that will have a significant impact on LTG's financial
results.
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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/.
