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Learning Technologies resumes dividend payments; acquires Aussie learning firm

The acquisition of eCreators is expected to immediately enhance the group's earnings

Learning Technologies Group PLC -

Learning Technologies Group PLC (LON:LTG) revealed it is to acquire eCreators, Australia's largest provider of Moodle, the leading open-source learning management system (LMS), as the UK firm also reported its first-half results.

The company said it will initially pay A$5.5mln (roughly £3.1mln) in cash for eCreators and will integrate the Aussie firm into its existing Moodle business.

Further performance payments, capped at A$6.5mln (about £3.7mln) are payable in cash based on what Learning Technologies described as “ambitious growth targets” in each of the years 2021-2023 inclusive.

The acquisition will be funded from existing cash and is expected to immediately improve Learning Technologies’ earnings.

In the fiscal year ended June 2020, eCreators generated unaudited revenue of around A$4.6 million (about £2.6mln), of which roughly 60% are recurring subscription fees. The proposed acquisition is subject to regulatory approval and is expected to complete before the end of October 2020.

“eCreators' culture fits closely with ours, and I am particularly excited by its potential to integrate with and extend the capability and geographic reach of our market-leading Moodle expert, Open LMS. Our Moodle technology is highly scalable, and eCreators will help us identify and pursue the growth opportunity in the global Moodle market,” Jonathan Satchell, the chief executive officer of Learning Technologies said ina statement.

Separately, Learning Technologies’ half-year report showed an increase in underlying adjusted earnings before interest and tax (EBIT) to £20.1mln (excluding non-cash items) from £19.4mln the year before.

Reported profit before tax fell to £4.1mln in the first half of 2020 from £6.8mln the previous year. Revenue nudged up 2% to £64.1mln from £62.6mln, despite the Content & Services division’s performance being hit by the coronavirus (COVID-19) pandemic.

The group's Content & Services arm’s revenues fell by 22% year-on-year as the pandemic delayed some projects. Software & Platforms saw revenue rise 13% on the same period of last year, driven by the acquisition of Open LMS and growth across the Rustici, GOMO and Breezy HR businesses.

Recurring revenues now account for 81% of the group’s revenues, up from 74% in the first half of last year, while revenue from outside the UK now accounts for 81% of group revenues, up from 79% last year.

Net cash at the end of June stood at £77.8mln, compared to net debt of £13.9mln at the end of June 2019.

The board had previously decided to postpone the payment of the final dividend in respect of 2019 but has now decided the 0.50p dividend can now be paid. It has also proposed an interim dividend for this year of 0.25p, in line with last year’s payment.

“Delivering strong results during a global crisis is an exceptional achievement. LTG's combination of excellent cash generation, high margins and a robust balance sheet support the board's decision to pay the postponed FY19 dividend and propose an interim dividend,” said CEO Satchell.

“High levels of recurring revenue, momentum for new sales and an improving order book support the board's confidence of delivering FY20 results in line with market expectations. We have an exciting and active acquisition pipeline and also a robust balance sheet to capitalise on the structural trends in digital learning and talent management. These factors enable us to reconfirm our run-rate target of c.£230 million revenues and c.£66 million EBIT by end 2022," he added.

The company said it has reinitiated guidance for 2020 in line with market expectations.

Learning Technologies also announced that Simon Boddie, the chief financial officer of Coats PLC, will be appointed to the board as a non-executive director from the beginning of next month.

Shares in Learning Technologies were up 3.2% at 142.4p in early deals on Tuesday.

Quick facts: Learning Technologies Group PLC

Price: 136.3 GBX

AIM:LTG
Market: AIM
Market Cap: £1.01 billion
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Learning Technologies Group reports 'robust and resilient performance' for...

Learning Technologies Group's (LON:LTG) Jonathan Satchell says its half year results to June 2020 were 'robust and resilient'. The six month period saw an increase in underlying adjusted earnings before interest and tax (EBIT) to £20.1m (excluding non-cash items) from £19.4m the year...

on 24/9/20

3 min read