Learning Technologies Group plc
ANNUAL REPORT
2022
For the year ended 31 December 2022
Introduction plc Annual Report 2022
Table of | |
contents | |
Chairman's Statement | 01 |
Case Studies | 03 |
Growth Strategy | 13 |
Strategic Report | 15 |
ESG Report | 33 |
Corporate Governance Report | 49 |
Report of the Audit & Risk | 55 |
Committee | |
Report of the Remuneration | 59 |
Committee | |
Directors' Report | 65 |
Directors' Responsibilities | |
Statement | 67 |
Independent Auditor's Report | 69 |
Consolidated Statement of | |
Comprehensive Income | 76 |
Consolidated Statement of | |
Financial Position | 77 |
Consolidated Statement of | |
Changes in Equity | 79 |
Consolidated Statement of | |
Cash Flows | 80 |
Notes to the Consolidated | |
Financial Statements | 81 |
Company Statement of | |
Financial Position | 139 |
Company Statement of | |
Changes in Equity | 140 |
Notes to the Company | |
Financial Statements | 141 |
Glossary | 145 |
Company Information | 146 |
Visit us online at
www.ltgplc.com
The Annual Report contains certain forward-looking statements regarding the operations, performance and financial condition of the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results to differ from those anticipated. Nothing contained in this Annual Report should be construed as a profit forecast.
Helping
Organisations
Transform
Through Their
People
Our purpose
We are a global market leader in learning and talent development and we work as a strategic partner, helping our customers transform through their people. We do this via a combination of thinking (consulting), services and technologies.
Highlights
- Transformational year for LTG following the successful integration of GP Strategies, which became our lead market-facing brand in Q4
- Broader offering supports cross-selling and positions LTG to capture growth opportunities in >$100bn digital learning and talent management market
- Resilient model with high levels of visibility due to the majority of revenues from SaaS and long-term contracts (71%) from diversified end markets
- Organic revenue up 3%; pro forma constant currency organic revenue growth of 5%
- Achieved margin targets for GP Strategies of an average of 12% and a Q4 2022 exit rate of 14%, a significant increase compared to c.5% pre-acquisition
- Significant addition of scale, with revenues more than doubling and adjusted EBIT almost doubling
- Robust cash conversion of 82% (2021: 81% on a like-for-like basis) resulted in swift deleveraging, in spite of US dollar strength, with net debt of £119.8m at year end (2021: £141.4m)
- Strong balance sheet supports ability to make accretive acquisitions that fit long-term strategy
- Progressive dividend policy: final dividend increased 64% to 1.15p. Full-year dividend 1.60p (+60%)
Who | What |
we are | we do |
plc Annual Report 2022 Introduction
Our key ESG initiatives
We are a global provider of learning and talent technologies and services, with a focus on the estimated $100 billion global external corporate training market. We have a strong track record of driving organic revenue growth and profit while also investing in the future through innovation, content, software and systems. This approach, when combined with selective acquisitions, provides cross-selling and margin improvement opportunities which helps drive sustainable value for our stakeholders. The Group has over 5,000 employees in 35 countries around the world and circa £600 million in revenue.
We play a valuable and important role in society. As a business, we help our customers manage and develop human capital, and our products and services have provided efficient learning to more than 200 million people globally during 2022.
LTG's ESG framework and initiatives are focused around five key objectives, which are integral to our business strategy:
- Supporting clients in making a positive ESG impact
- Taking care of our people
- Environmental sustainability
- Meeting our stakeholder expectations on governance
- Achieving high standards of data privacy and security
See page 33 for our ESG report.
Revenue
£596.9m
2021: £258.2m
Adjusted EBIT*
£100.9m
2021: £54.8m
Adjusted, diluted EPS*
8.121p
2021: 5.010p
Adjusted operating cash
flow conversion*
82%
2021: 81% on like-for-like basis (76% reported)
*For details of Alternative Performance Measures see Glossary on page 145.
Organic revenue growth
5%(pro forma)
3%(underlying)
2021: 8%
Statutory operating profit
£50.5m
2021: £11.7m
Basic EPS
3.857p
2021: 1.959p
Net debt/(cash)*
£119.8m
2021: £141.4m
1 plc Annual Report 2022
Chairman's Statement
"LTG continues to deliver impressive and sustainable growth in a challenging macroeconomic environment."
Introduction
We are pleased to announce that Learning Technologies Group plc (LTG) has completed another year of strong operational results, including organic revenue growth in addition to a substantial increase in adjusted EBIT and adjusted diluted Earnings per Share driven by a full year's contribution from GP Strategies.
LTG has consistently delivered remarkable and sustainable growth for its shareholders since its inception nine years ago. The Group has achieved a compound annual growth rate (CAGR) in revenue of 59% from 2014 to 2022. Our ability to consistently deliver value to shareholders is demonstrated by our growth, which is driven by both organic revenue growth and margin improvement, as well as creating value from the addition of strategic acquisitions. Furthermore, our adjusted EBIT and adjusted diluted EPS have shown similar or higher levels of growth, with CAGRs of 63% and 47% respectively, over the same period from 2014 to 2022. Statutory operating profit has a CAGRs of 88% over the 2014 to 2022 period and diluted EPS has grown 48% since 2015.
ESG
ESG is a top priority for the Board as we recognise its importance and our responsibility to integrate it into the solutions we provide not only to our clients, but also to our employees. This commitment is reflected in many of our offerings to stakeholders, including our custom content and training courses on ESG-related topics. In 2022, we estimate our technology and services reached more than 200 million people globally. Furthermore, we offer virtual training solutions to help minimise travel requirements and promote environmental sustainability.
We not only support our clients on making a positive ESG impact, but we also focus on our internal operations where we have delivered several benefits. During 2022, we reduced our office space which has resulted in a reduction in our carbon footprint. In addition, we implemented several policies within the sustainability space. Looking ahead to 2023, we have already begun a number of new ESG initiatives, and we remain committed to a net zero emissions target by 2050,
or earlier. Further details of LTG's environmental initiatives and performance in 2022 are set out on pages 33 to 48.
Revenue | Adjusted EBIT | Adjusted diluted EPS |
59% | 63% | 47% |
CAGR 2014-2022 | CAGR 2014-2022 | CAGR 2014-2022 |
During 2022, LTG devoted significant effort to delivering the commercial transformation and integration of GP Strategies, which is our largest acquisition to date. The strategic combination of LTG and GP Strategies has established us as a leading global workforce transformation business focused on learning and talent development. This has enabled us to expand our global reach, enhanced our service offerings and strengthened long-standing customer relationships.
The Board
There have been no changes to the LTG plc Board in
2022. Our Board currently consists of eight members, of which four are non-executive directors. The Board notes the recommendations of the Hampton-Alexander and Parker reviews in relation to increasing Board and senior management gender and ethnic diversity, and it takes these into consideration when making appointments. Four of our Board members are women, representing 50%, exceeding the Hampton-Alexander target for FTSE 100 and FTSE 250 Boards. In addition, we are proud to have some 40% of
our wider senior leadership positions held by women, also exceeding the Hampton-Alexander target.
As a Board we take our governance responsibilities seriously and believe these allow the Group to pursue its strategy with more pace and less risk. The approach to our wide range of responsibilities is set out in the Corporate Governance Report on pages 49 to 54.
Dividend and capital allocation
The Board remains committed to a progressive dividend policy. Given the robust operational performance during the year, the Board is pleased to announce it is recommending a final dividend of 1.15 pence per share (2021: 0.7 pence).
Together with the interim payment of 0.45 pence, this gives a total dividend for the year of 1.60 pence, an increase of 60% on the prior year.
If approved the final dividend will be paid on 14 July 2023 to all shareholders on the register on 23 June 2023.
People
On behalf of the Board, I would like to welcome to the LTG family our new Chief People Officer, Liz Freedman, and our new Chief Customer Strategy Officer, Karie Willyerd. Liz came to us from Intercontinental Hotel Group, bringing a wealth of global company experience. Karie, former Chief Learning Officer at Visa, will further enable us to support customers as they move towards a new era of learning and talent transformation. We also welcomed our new Chief Information Officer, David Anderson, who joined us in January 2023.
As a business that exists to help our customers manage and develop their human capital, we rely on our employees to deliver superior customer service. This includes designing and delivering content, managing our client's learning services, and developing and delivering capabilities through our technology platforms. Our employees are the daily face of our business across the broad spectrum of our commercial and government customers.
Our employees continue to demonstrate their dedication, hard work and an ability to drive our delivery and performance forward in challenging conditions and I continue to be impressed by their energy, professionalism and adaptability as they satisfy the ever-changing needs of our customers. On behalf of the Board, I express appreciation and thanks to our employees for their dedication and hard work through the year.
plc Annual Report 2022 2
Looking forward
The Board sees much to be excited about in 2023. Our business is well-positioned in attractive and sustainable learning and talent development markets and has an expanded global reach. It is in robust financial health with differentiated capabilities and technology, and this will help us continue our enviable, long-term record of value creation. The GP Strategies acquisition has already delivered significant value, underpinned by margin enhancement as well as cross- selling to our combined customer base. These factors provide the Board with confidence in the Group's near and longer- term prospects.
Andrew Brode
Chairman
25th April 2023
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Learning Technologies Group plc published this content on 27 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2023 15:43:18 UTC.