Shares in digital leaning company Learning Technologies Group (LTG:AIM) increased by 5% to 138p following the announcement of full year 2021 results that were ahead of expectations.
The results follow on from last week’s positive trading update. The market is likely to be encouraged by the increased margin guidance for its GPS division, a training and delivery consultant business acquired in October 2021.
Revenue of £258 million was underpinned by an 8% underlying growth driven by a robust Content and Service performance. Adjusted earnings before interest and taxes increased by 36% to £54.8 million.
Earnings per share rose by 17% year on year to 5p, and the dividend per share moved ahead by 40% to 0.7p.
Management highlighted strong momentum, coupled with a robust balance sheet can support further M&A (mergers and acquisitions) and underpinned its confidence of significant progress for 2022.
SYMBIOTIC GPS DEAL
Management’s decision to raise their margin guidance for GPS, reflects the shrewd and symbiotic nature of the $394 million acquisition.
The deal offers unique benefits for both companies. Learning Technology Group, provides scalable platforms to help GP Strategies deliver their top-notch learning services and workforce performance improvement initiatives.
For LTG, the merger offers instant access to GP Strategies’ inherent expertise in building complex learning solutions, which is a notoriously difficult skill to recruit for and would have taken considerable time to develop in house.
With expertise in all of the core process capabilities of training organizations, the merged company will be ideally positioned to help even the most demanding corporates to deliver successful programs.
Numis analyst Gareth Davies commented: ‘Outlook comments confirm a strong start to 2022. The GP Strategies Integration is running ahead, and margin guidance for GPS in 2022 is increased to 12% (previous 11%)..we feel it prudent to hold out 2022 estimates for now with risk firmly on the upside’.
