Source - LSE Regulatory
RNS Number : 5978N
Learning Technologies Group PLC
26 September 2023
 

26 September 2023

 

Learning Technologies Group plc

HALF YEAR RESULTS 2023

 

Resilient performance with high levels of visibility from recurring revenues

FY23 performance expected to be in line with analyst estimates

 

 

Learning Technologies Group plc, a global market leader in digital learning and talent management, announces half year results for the six months ended 30 June 2023. All figures relate to that period unless otherwise stated.

 

Strategic and operational highlights

 

·     

Resilient, diversified business model reflected in long-term contract wins for Software & Platforms and wins for major customers in Content & Services

·     

Solid performance from SaaS and long-term contracts which account for 72% of H1 2023 revenue (H1 2022: 71%)

·     

As indicated previously, challenging macroeconomic backdrop continues to impact transactional and project-based work

·     

One-off issues relating to LEO integration within GP Strategies resolved in July, as previously indicated, with significant improvement in major KPIs in GPLX since Q2

 

Financial highlights

 

·     

Reported revenues up 2% to £284.6 million (H1 2022: £277.8 million continuing operations)

·     

Flat revenues on an organic constant currency basis: Content & Services up 2% and Software & Platforms down 5%

·     

Adjusted EBIT slightly down 1% to £43.1 million (H1 2022: £43.6 million continuing operations)

·     

Good cash performance with conversion of 65% (last year 60%)

·     

Ongoing deleveraging supporting a planned voluntary debt repayment of $25 million on 29 September 2023, for an expected $0.4 million interest benefit in Q4 2023

·     

Robust balance sheet with net debt of £108.4 million at 30 June 2023 (31 December 2022: £119.8 million) and net debt: EBITDA ratio of 0.9x (FY 2022: 1.1x), allowing for select accretive acquisitions

 

Dividend

 

·     

The Board is pleased to declare an interim dividend of 0.45 pence per share (H1 2022: 0.45 pence).

 

Current trading and outlook

 

·     

We continue to see resilience in our SaaS and long-term contracts, offset by lower transactional volumes in line with the broader macroeconomic environment as well as lower demand in GP Strategies, notably in China

·     

GP Strategies is expected to deliver a significantly improved exit run-rate EBIT margin of c.17%, driven by improvements to GPLX and a commercial transformation programme

·     

FY23 performance expected to be in line with analyst estimates, including updated expectations for FX and share-based payments1

 

1 Median company-compiled analyst estimates, as at 14 September 2023, are £560.2m revenues and £98.0m Adjusted EBIT for FY23

 


Jonathan Satchell, Chief Executive Officer of Learning Technologies Group, said:

 

"LTG has delivered a resilient performance in a challenging macro backdrop, underpinned by our SaaS and long-term contracts, which represent 72% of H1 2023 revenues. Revenues, on an organic constant currency basis, were flat as a result of lower transactional volumes, as indicated in July. 

 

LTG remains uniquely placed to capture growth opportunities in a >$100 billion addressable market as a result of our scale and breadth of offering in digital learning and talent management. Our balance sheet supports investment and accretive acquisitions that fit with our business model, whilst also allowing us to make a voluntary debt repayment. Demand from organisations to recruit, motivate and retain the best talent, allied with improvements from our commercial transformation programme in GP Strategies, support our confidence of meeting analyst estimates for FY23."


Financial summary: 

 

 

 

Continuing

 

Reported

£m unless otherwise stated

H1 2023

H1 2022

Change

H1 2022

Revenue

284.6

277.8

2%

281.8

Organic growth*

0.1%



5.2%

Software & Platforms organic growth 

(4.7)%



6.5%

Content & Services organic growth

1.8%



1.6%

     SaaS & long-term contracts 

72%



71%

Adjusted EBIT

43.1

43.6

(1)%

44.1

Adjusted EBIT margin

15.1%

15.7%


15.6%

Statutory PBT

16.5

18.0

(8)%

18.5

Adj. Diluted EPS (pence)

3.293

3.666

(10)%

3.715

Basic EPS (pence) - continuing & discontinued

1.376



1.848

Net Debt / (Cash)

108.4



145.3

Dividend (pence)

0.45



0.45

* Organic growth on a constant currency basis

 

Analyst and investor presentation:

 

LTG will host an analyst and investor webcast at 09:00 today, 26 September 2023. The registration link can be found below:

 

https://attendee.gotowebinar.com/register/6277184884607235423

 

Telephone dial-in details: +44 330 221 9922 (+1 (951) 384-3421 for international dial-in).

Access Code: 838-970-977



 

Enquiries:

 


Learning Technologies Group plc

Jonathan Satchell, Chief Executive

Kath Kearney-Croft, Chief Financial Officer

 

+44 (0)20 7832 3440

Numis Securities Limited (NOMAD and Corporate Broker)

Nick Westlake, Ben Stoop, Tejas Padalkar

 

+44 (0)20 7260 1000

Goldman Sachs International (Joint Corporate Broker)

Bertie Whitehead, Adam Laikin

+44 (0)20 7774 1000



FTI Consulting (Public Relations Adviser)

Jamie Ricketts, Emma Hall, Lucy Highland, Jemima Gurney

+44 (0)20 3727 1000

 

 

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.

 

 

Chief Executive Review

 

Introduction

 

LTG is a global provider of integrated talent management and learning software and services.

Our purpose is shared by all of our companies: we help organisations keep up with ever-changing workforce development needs. Organisations need to recruit, motivate and retain the best talent. 

To meet this demand, we have built a broad offering to capture a >$100 billion addressable market for digital learning and talent management. The size of the opportunity reflects long-term, structural drivers. 

Our businesses are a cohesive federation of like-minded, highly profitable leaders in talent management and learning software and services with a common go-to-market strategy. Where it is advantageous to our strategy, performance and client needs, we collaborate on bilateral cross-selling and we integrate our businesses' systems. 

LTG continues to evolve by building out our offering through a combination of organic growth and strategic acquisitions that complement the current business. Our strong cash generation and prudent balance sheet give us a platform to pursue select accretive acquisitions.

The Group remains well placed to benefit from AI and continues to make progress with its AI strategy.  A number of projects, trials and policies are underway across the Group. For example, GP Strategies is helping some of its largest clients to train their own AI models across learning and talent and recently launched its AI Consulting framework in May 2023. GP Strategies expects to launch its AI learning programme in October for Learning and Development leaders. Where relevant, our businesses are collaborating on AI initiatives. Character-based AI initiated by the PRELOADED team is being introduced to the largest GP Strategies client for character-based learning assistant exploration. As part of our long-term strategy, we will consider acquisitions of AI technology businesses who have good products but need access to the market.

 

Resilient performance with high levels of visibility from recurring revenues

Revenues from continuing operations for the six months to June 2023 grew by 2% to £284.6 million (H1 2022: £277.8 million). Our recurring revenues were offset by lower transactional volumes in the first half of 2023, as indicated in our July update, resulting in flat revenues on an organic constant currency basis. This performance in a challenging macro backdrop underlines the resilience of our model, with SaaS and long-term contracts representing 72% of H1 2023 revenue (H1 2022: 71%). 

 

As expected, the operational focus in H1 2023 remained the large-scale commercial transformation of GP Strategies, acquired in 2021. The addition of GP Strategies has been a step-change for our scale, tripling revenues and doubling profits. One-off issues in the first half of the year relating to the integration of LEO into GP Strategies' content division to form GPLX, impacted its first half performance.  These have now been resolved and we have seen an improvement in GPLX margins in July and August compared to H1 with further improvement expected in the remainder of the second half of the year. As expected, overall margins in GP Strategies are improving and we expect the exit run-rate adjusted EBIT margin for the entire GP Strategies business will be in line with expectations at c.17%.

Adjusted EBIT was slightly lower at £43.1 million (H1 2022: £43.6 million). Statutory operating profit from continuing operations improved 5% to £23.2 million (H1 2022: £22.2 million), including adjusting items of £19.9 million (H1 2022: £21.4 million).

LTG is a cash generative business, which enables us to make a voluntary debt repayment of $25 million on 29 September 2023, giving an expected $1.7 million benefit per annum on interest payments at current interest rates.

As announced in December 2022, a non-core asset within GP Strategies had been identified for disposal in 2023. The sale of this business is progressing well and we expect to provide a further update before the end of the year.

           

Corporate Governance

ESG initiatives remain at the forefront of our business process and strategy as we continue to advance towards our 2023 targets, including making progress during the first half of the year around sustainable procurement, scope 3 data, colleague engagement and training.

We implemented a group-wide sustainable procurement policy and will continue to refine our data and supplier review process, including cascading our recently updated supplier code of conduct policy. These steps help us to ensure that our supply chain is aligned to our goals in the ESG space. In addition, we are focusing heavily on our scope 3 data, looking more in-depth at our upstream purchased goods and service category and evaluating our supply chain. Our Ecovadis scores from our February 2023 submission improved substantially and we have reduced our Scope 1 and Scope 2 emissions by more than 60% over our 2019 baseline year. 

From the colleague perspective, we reactivated our engagement survey to measure satisfaction and had a response rate of 75%.  Whilst there is no room for complacency, we were heartened by most of results and qualitative feedback.  We have implemented disciplined processes for action planning and follow-up and we have several other colleague initiatives underway in parallel to include delivering our in-house designed core leadership programme, and strengthening our performance enablement process to proactively address development planning and well-being. I am also excited to share that our largest subsidiary, GP Strategies, had numerous internal promotions further diversifying their senior leadership team.

We remain focused and committed to meeting the ESG goals that we set forth in the 2022 annual report.

 

Operational Review

 

With effect from this interim report, reporting divisions have been updated to reflect internal reporting on a business unit basis, and the revised format is consistent with that used by the Chief Operating Decision Maker. Following the reorganisation and integration of LEO and PDT into GP Strategies, the Content & Services division now includes all three businesses in addition to Affirmity and PRELOADED.  The Software and Platforms division reflects the results for the Product companies.  The categorisation of the companies under the division heading is outlined below. Note 3 to the accounts includes a restatement of the prior year's comparative result.

 

Content & Services (74% of H1 2023 Group revenue)

 

Content & Services comprises GP Strategies, PRELOADED and Affirmity. GP Strategies is a global workforce transformation provider of organisational and technical performance learning solutions.  PRELOADED is a BAFTA-winning immersive games studio.  Affirmity provides a portfolio of software, consulting services and blended learning solutions to help US-based enterprise and mid-market companies measure diversity, build inclusive workforces and operate effective DE&I and affirmative action programmes.

 

Revenue increased by 4.5% to £211.5 million (H1 2022: £202.3 million) reflecting the benefit of the strength of the US dollar and 1.8% organic constant currency growth with particularly strong growth in Affirmity and PRELOADED. There was moderate growth in GP Strategies despite lengthening sales cycles and the challenging macro environment impacting on transactional and project-based work.  As outlined previously, the integration challenges within GPLX that impacted performance in the first half of the year have been resolved.

 

Long-term contracts continued to perform as organisations maintained their investment in delivering effective workforce transformation solutions in a digital, flexible and fast-paced corporate environment.    

 

Effective 1 January 2023, LEO Learning, a digital learning specialist was integrated with GP Strategies' global content design team to create the world's largest and most creative custom content and learning experience design offering, called GPLX. Simultaneously, PDT Global joined GP Strategies' Leadership Training division to create a combined force in Diversity, Equity and Inclusion (DE&I).  These additions to GP Strategies' portfolio enhance its capabilities as a world-leading learning and talent transformation company. 

 

GP Strategies' solutions improve the effectiveness of organisations by delivering innovative and superior consulting, training, and business improvement solutions. Clients include Global 500 companies, automotive, financial services, technology, aerospace and defence industries, and other commercial and government customers.  The business has experienced good growth in managed learning services with the ramp up of new accounts, and in the Americas division with the expansion and growth in existing accounts and non-US automotive accounts. AMEA had strong growth in H1 2023 following a slower Covid recovery in H1 2022. This was partially offset by the temporary GPLX H1 integration challenges and lower transactional revenue due to a slowdown in spending in large Human Capital Management implementation projects.

PRELOADED has seen a strong start to the year and continues to win highly innovative contracts with significant clients including a global entertainment company and a global international social media company.   

 

During the first half of 2023, Affirmity delivered strong revenue growth driven by an improvement to the client renewal rate, cross-selling at renewal and adding new clients. 

 

Software & Platforms (26% of H1 2023 Group revenue)

 

The Software & Platforms division comprises SaaS and on-premise licenced product solutions as well as hosting, support and maintenance services. PeopleFluent provides cloud-based talent management solutions and services to large-enterprise clients that require recruiting, performance, succession, compensation, learning and organisation charting capabilities beyond what is available within their current HR systems.  Breezy provides a largely self-service SaaS talent acquisition solution aimed at small and medium-sized businesses. Bridge is an employee-focused learning and performance platform operating in the higher growth, mid-market with proven potential to move into sectors of the enterprise market. Rustici Software is a global expert in e-learning interoperability software.  Open LMS provides the largest scale capability in the global open-source Moodle™ services market. VectorVMS is a market-leading SaaS-based technology for the contingent workforce. 

Software & Platforms revenue of £72.9 million (H1 2022: £75.5 million) declined 3% due to a combination of mixed business performance and FX tailwinds. On an organic constant currency basis Software & Platforms declined 4.7% driven by a 10.8% decline in PeopleFluent as expected, lower revenue in Breezy due to softer transactional revenue from the US SME recruitment market and lower year-on-year performance in Reflektive due to softness in technology sector customers and the commencement of a strategy to migrate customers to a version of Reflektive within Bridge. This was partially offset by continued strong growth in Rustici and Bridge, and moderate growth in OpenLMS.

 

The macroeconomic picture has suppressed Breezy's performance in H1 2023, as a 49% reduction in transactional revenue related to job postings, now representing c15% of Breezy revenues, masks a 3% growth in platform hosting revenues.   

 

Rustici has continued to deliver strong organic revenue growth in the first half of the year driven by its Content Controller product which represents 60% of the growth (as it is the youngest and fastest growing) and SCORM Cloud products.

 

Open LMS had moderate organic constant currency revenue growth as customers rebased their requirements following strong performance in the Covid years.   

 

VectorVMS reported a slight softening in revenues compared to the first half of 2022 as a result of customers reducing their utilisation of contingent labour and healthcare labour rates moderating after strong demand in Covid years. 

 

Dividend

 

On 14 July 2023, the Company paid a final dividend of 1.15 pence per share, giving a total dividend for 2022 of 1.60 pence per share. Given its confidence in the continuing success of the Group, the Board is pleased to declare an interim dividend of 0.45 pence per share (2022: 0.45 pence per share). This dividend will be paid on 27 October 2023 to all shareholders on the register as at 6 October 2023.

 

Current trading and outlook

 

In line with the pattern established in the first half of 2023, LTG continues to see resilient trading in our SaaS and long-term contracts, offset by lower transactional volumes, consistent with current macroeconomic trends. While GP Strategies has seen lower demand in certain regions such as China, it is expected to deliver a significantly improved exit run-rate EBIT margin of c.17%, driven by improvements to GPLX and a commercial transformation programme.

The Board expects FY23 performance to be in line with analyst estimates, including updated expectations for FX and share-based payments.  The Group remains well-placed to capitalise on greater project activity as macro conditions improve.

LTG remains uniquely placed to capture growth opportunities in a >$100 billion addressable market as a result of our scale and breadth of offering in digital learning and talent management.  Our balance sheet supports accretive acquisitions that fit with our culture. Demand from organisations to recruit, motivate and retain the best talent, allied with improvements from our commercial transformation programme in GP Strategies, support our confidence of further progress in the second half of the year.

 

 

https://lh4.googleusercontent.com/YE85mJ8fwVuVdiNs5FtH3D5xUt9E9IMVtSczPEJyDUX2PGHuvuym1aYskhQi6hRnehkzCo71QoO5-zeInERSctgoOE-qhEbXLKuKoCMEm6hwbmWag3wo1aH3yPh4qkdExyxVDpfWBRZPCckGvKWKcy-DPsrLeSwjlup4SQhAewUZC0ZlFJ2AgBgR6U1v

 

Jonathan Satchell

Chief Executive 

26 September 2023

 

 

 

Chief Financial Officer's Review

 

In the six months ended 30 June 2023, despite the challenging economic climate, revenues for continuing operations increased by 2% to £284.6 million (H1 2022: £277.8 million). The Group has experienced growth and resilience in SaaS and long-term contracts in contrast to transactional revenue with the proportion of this category of revenue increasing to 72% from 71% in H1 2022. 

 

Revenue in Content & Services increased 5% to £211.5 million (H1 2022: £202.3 million) with the division now accounting for 74% of Group revenue (H1 2022: 73%).  Organic constant currency revenue growth was 1.8% (H1 2022: 1.6%), due to a combination of moderate growth in GP Strategies and strong growth in Affirmity and PRELOADED. Long-term contracts accounted for 65% of the division's revenue, an increase from 62% in H1 2022, a testament to the resilience of recurring revenue. GP Strategies saw strong growth in managed learning services contracts, and AMEA following a slower Covid recovery in 2022, and the Americas division. Offsetting this good growth were the temporary H1 integration challenges in GPLX, slowdown in spending in large implementation projects and the macroeconomic climate affecting transactional revenues. PRELOADED revenue growth was fuelled by an increased US presence alongside developing stronger long-term client relationships resulting in increased work from existing clients. Affirmity also delivered strong growth driven by an improvement to the client renewal rate, cross-selling at renewal and acquiring new clients. 

 

Revenue in Software & Platforms decreased 3% to £72.9 million (H1 2022: £75.5 million) with the division now representing 26% of Group revenue (H1 2022: 27%).  On an organic constant currency basis Software & Platforms declined 4.7% (H1 2022: 6.5% growth) driven by an expected 10.8% decline in PeopleFluent, continued challenges in Breezy as the transaction business related to the SME US labour market remained subdued despite resilient SaaS revenues, and Reflektive due to softness in technology sector customers and the strategy to migrate customers to a version of Reflektive within Bridge. These challenges were partially offset by continued growth in Rustici driven by its Content Controller product and moderate growth in OpenLMS as customers rebalance their requirements following the Covid years, including some organisations losing their government sponsored funding and a move back to face-to-face learning.  

 

Adjusted EBIT from continuing operations decreased slightly to £43.1 million (H1 2022: £43.6 million continuing operations). The resulting adjusted EBIT margin of 15.1% was down from 15.7% in H1 2022, driven primarily by lower revenue in the Software & Platforms division resulting in operational deleverage and the temporary H1 challenges in GPLX which are now resolved.

 

Adjusted EBIT margin in the Content & Services division at 11.8% (H1 2022: 12.0%) was broadly in line with the prior year.  Software & Platforms adjusted EBIT margin reduced from 25.5% in H1 2022 to 24.8% due to a decline in revenues resulting in slight operational deleverage.

 

The Group reported an increase in operating profit of 5% to £23.2 million (H1 2022: £22.2 million continuing operations, £21.4 million reported) which is stated after amortisation of acquired intangibles, various acquisition earn-out charges, loss on disposal of fixed assets, transaction and integration costs. Amortisation of acquired intangibles decreased to £16.6 million (H1 2022: £18.0 million). Acquisition earn-out charges decreased to £1.1 million (H1 2022: £2.3 million). Contingent consideration arrangements are in place for eThink, eCreators, and PDT and are all dependent on challenging incremental revenue growth targets.  Loss on disposal of fixed assets were £0.9 million (H1 2022: £0.2 million).  Integration costs decreased to £1.2 million (H1 2022: £2.3 million) related to the integration of GP Strategies, with further costs expected in H2.  We remain on track to complete the integration in line with our initial estimate of $13 million. For further details of the items excluded from statutory operating profit, see note 6.

 

Net finance expenses of £6.7 million (H1 2022: £4.2 million) include interest on borrowings of £7.0 million (H1 2022: £3.1 million), £0.3 million (H1 2022: £0.3 million) relating to the Group's leases under IFRS 16, and £0.5 million interest receivable (H1 2022: £0.2 million). 

 

The Group reported a profit before tax of £16.5 million for the six months ended 30 June 2023 (H1 2022: £18.0 million). The tax charge of £4.5 million (H1 2022: tax charge of £3.8 million) is primarily driven by applying UK and international tax rates to associated results offset by the net favourable impact of tax rate changes on deferred assets and liabilities and net non-deductible foreign exchange adjustments.  

 

Discontinued operations, reflecting the closure of the UK Apprenticeship business, generated a loss after taxation of £1.1 million for the period (H1 2022: £0.4 million profit).

 

Basic earnings per share for continuing and discontinued operations in H1 2023 was 1.376 pence (H1 2022: 1.848 pence). Adjusted diluted earnings per share for continuing operations as set out in Note 9 was 10% down on the prior year at 3.293 pence (H1 2022: 3.666 pence) reflecting marginally lower adjusted operating profit, a significant increase in interest costs and a higher number of shares including the potential dilutive impact of share options.

 

Gross cash of £78.1 million and net debt of £108.4 million, excluding £12.6 million of lease liabilities, at 30 June 2023 compares with gross cash of £94.8 million and net debt of £119.8 million, excluding £14.9 million of lease liabilities, at 31 December 2022. The covenant net debt / adjusted EBITDA ratio was 0.9x in June 2023 (1.1x in December 2022).

 

Share-based payments are lower year-on-year due to a release of prior year costs resulting from leavers and performance criteria not being met.  

 

Cash generated from operations was strong at £32.6 million (H1 2022: £26.8 million) as we tightly manage our working capital, and net cash flow from operating activities was £26.7 million (H1 2022: £18.6 million).   

 

Free cash flow2 was £5.6 million (H1 2022: £8.2 million) as set out below, and we expect free cash flow to continue to be H2 weighted.

 

£m

H1 2023

H1 20223

Variance

Statutory operating profit

23.2

21.4

1.8

Adjusting items

19.9

22.7

(2.8)

Adjusted EBIT

43.1

44.1

(1.0)

Depreciation & Amortisation

7.1

7.8

(0.7)

Share based payment charges

3.1

4.1

(1.0)

Dec / (Inc) in working capital4

(12.1)

(17.7)

5.6

Capital expenditure

(7.2)

(5.0)

(2.2)

Lease liabilities

(3.2)

(4.0)

0.8

Other

(2.8)

(3.0)

0.2

Adjusted operating cash flow2

28.0

26.3

1.7

Cash Conversion2

65%

60%

5% pts

Net Interest paid

(10.6)

(3.7)

(6.9)

Tax paid

(5.9)

(8.2)

2.3

Integration & transaction costs

(1.2)

(2.3)

1.1

Earnout & contingent consideration

(4.7)

(6.2)

1.5

Proceeds from asset sale

-

2.3

(2.3)

Free cash flow2

5.6

8.2

(2.6)

 

 

Adjusted operating cash flow was £1.7 million higher than H1 2022 primarily reflecting a lower working capital investment offset by higher capital expenditure in the period and lower share-based payment charges. Cash conversion was 65%, an improvement from 60% in H1 2022. 

 

Net interest payments increased to £10.6 million from £3.7 million, including £4.5m related to interest costs from 2022 payable in January 2023 as the loan was rolled for 6 months to mitigate interest rate rises in H2 2022. Tax payments decreased to £5.9 million (H1 2022: £8.2 million) due to a combination of the reorganisation and prior year payments.  Integration and transaction costs primarily relate to the GP Strategies acquisition in late 2021. Earnout payments relate to Breezy and eCreators. Proceeds from asset sale were £nil in H1 2023, with the 2022 net cash inflow due to the sale of an investment of £2.3 million related to the sale of the NAS JV completed in April 2022.  

 

The Group plans to voluntarily repay $25 million of its term loan in addition to the normal quarterly payment of $9.6 million on 29 September 2023. The expected benefit of the voluntary repayment in 2023, at current interest rates, is c.$1.7 million per annum.

 

Net assets decreased to £419.6 million at 30 June 2023 (31 December 2022: £426.3 million) and total equity per share2 decreased from 54.0 pence per share to 53.0 pence per share.

 

2 Alternative Performance Measure (APM) term defined and explained in the Glossary

3 As reported in H1 2022

4 Excludes integration & transaction costs

 

 

 

 

Kath Kearney-Croft

CFO

26 September 2023

 

Consolidated statement of comprehensive income

 

 

Six months to

30 June 2023

Six months to

30 June 2022

Year to

31 Dec 2022

 

 

Note

 

£'000

£'000

£'000

Revenue

3


284,582

277,836

588,587

Operating expenses



(258,320)

(252,991)

(532,743)

Share-based payment charge

 


(3,081)

(4,061)

(6,693)

Profit on sale of joint venture

 


-

1,242

1,242

Share of profit from equity accounted investment

 


-

155

155

Operating profit

 


23,181

22,181

50,548


 


 



Adjusted EBIT



43,115

43,585

99,925

Adjusting items included in Operating profit

6


(19,934)

(21,404)

(49,377)

Operating profit



23,181

22,181

50,548




 



Finance expenses

7


(7,243)

(4,361)

(10,475)

Finance income

7


539

184

429

 



 



Profit before taxation from continuing operations



16,477

18,004

40,502




 



Income tax charge

4


(4,472)

(3,841)

(9,784)

 

 


 



Profit after taxation from continuing operations

 


12,005

14,163

30,718




 



(Loss) / Profit on discontinued operations, net of tax

5


(1,125)

394

(312)




 



Profit for the period/year



10,880

14,557

30,406

 



 

 

 

Profit for the period/year attributable to the owners of the parent



10,880

14,557

30,406




 



Other comprehensive income:



 



Exchange differences on translating foreign operations



(11,920)

34,483

30,961

Total comprehensive (loss)/profit for the period/year

 

 

(1,040)

49,040

61,367

 

 

 

 

 


Earnings per share from continuing operations

 

 

 

 


Basic (pence)

9

 

1.518

1.798

3.897

Diluted (pence)

9

 

1.476

1.749

3.748

Adjusted earnings per share

 

 

 



Basic (pence)

9

 

3.387

3.768

8.351

Diluted (pence)

9

 

3.293

3.666

8.032



 

 



Earnings per share from continuing and discontinued operations



 



Basic (pence)

9


1.376

1.848

3.857

Diluted (pence)

9


1.338

1.798

3.710

Adjusted earnings per share


 

 

 

 

Basic (pence)

9

 

3.253

3.818

8.443

Diluted (pence)

9

 

3.163

3.715

8.121

 

Consolidated statement of financial position

Note

30 June 2023

£'000

30 June 2022 £'000

31 Dec 2022

£'000

NON-CURRENT ASSETS





Property, plant and equipment

11

2,433

3,233

2,857

Right-of-use assets

11

10,449

14,235

11,808

Intangible assets

10

527,173

585,623

560,972

Deferred tax assets

15

7,331

4,584

4,084

Other receivables, deposits and prepayments


2,146

324

1,874

Amounts recoverable on contracts


-

1,362

1,303



549,532

609,361

582,898

CURRENT ASSETS





Trade receivables

12

105,768

122,872

136,025

Other receivables, deposits and prepayments

13

14,620

17,876

16,765

Amounts recoverable on contracts


39,349

41,800

33,221

Inventory


2,403

4,823

2,432

Amounts due from related parties


-

96

59

Cash and cash equivalents

14

78,132

71,933

94,847

Restricted cash balances

14

2,303

3,158

2,608



242,575

262,558

285,957

Assets in disposal groups classified as held for sale

19

6,695

-

8,369

TOTAL ASSETS

 

798,802

871,919

877,224

CURRENT LIABILITIES





Lease liabilities

17

4,162

8,194

5,082

Trade and other payables

16

141,581

174,470

180,634

Amounts due to related parties


-

6

-

Borrowings

17

31,220

23,845

36,714

Provisions

18

1,621

7,185

1,602

Corporation tax


5,468

4,395

602

ESPP scheme liability


881

703

500



184,933

218,798

225,134

NON-CURRENT LIABILITIES





Lease liabilities

17

8,486

13,196

9,792

Deferred tax liabilities

15

23,547

26,101

27,265

Other long-term liabilities


1,466

806

3,517

Borrowings

17

155,289

193,367

177,944

Corporation tax payable


763

1,428

1,431

Provisions

18

534

949

1,857



190,085

235,847

221,806

Liabilities directly associated with assets in disposal groups classified as held for sale

 

19

4,137

-

3,984

TOTAL LIABILITIES


379,155

454,645

450,924

NET ASSETS


419,647

417,274

426,300






EQUITY





Share capital


2,967

3,037

2,962

Share premium account


318,699

317,406

318,183

Merger relief reserve


31,983

31,983

31,983

Reverse acquisition reserve


(22,933)

(22,933)

(22,933)

Share based payment reserve


17,674

13,322

14,714

Foreign exchange translation reserve


13,809

29,251

25,729

Accumulated retained earnings


57,448

45,208

55,662

TOTAL EQUITY


419,647

417,274

426,300


Consolidated statement of changes in equity 

 

 

    Share

capital

Share

Premium

Merger relief reserve

Reverse acquisition reserve

Share based

payments

reserve

Foreign

exchange

reserve

Retained earnings

Total equity

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 January 2022

 

 

3,034

317,114

31,983

(22,933)

11,148

(5,232)

36,224

371,338



-

-

-

-

-

-

-

-

Profit for period


-

-

-

-

-

-

14,557

14,557

Exchange differences on translating foreign operations


-

-

-

-

-

34,483

-

34,483

Total comprehensive income for the period

 

-

-

-

-

-

34,483

14,557

49,040

Issue of shares net of share issue costs


3

292

-

-

-

-

-

295

Share based payment charge / credited to equity


-

-

-

-

4,061

-

-

4,061

Distributions in respect of cancelled share options


-

-

-

-

(1,887)

-

-

(1,887)

Tax credit on share options


-

-

-

-

-

-

(58)

(58)

Transfer on exercise and lapse of options


-

-

-

-

-

-

-

-

Dividends paid

 

-

-

-

-

-

-

(5,515)

(5,515)

Balance at 30 June 2022

 

3,037

317,406

31,983

(22,933)

13,322

29,251

45,208

417,274

Profit for period


-

-

-

-

-

-

15,849

15,849

Exchange differences on translating foreign operations


-

-

-

-

-

(3,522)

-

(3,522)

Total comprehensive income for the period

 

           -  

               -  

             -  

             -  

           -  

(3,522)

15,849

12,327

Issue of shares net of share issue costs


5

737

             -  

             -  

           -  

        -

-

742

Reserves transfer


(80)

40

-

-

-

-

40

-

Share based payment charge / credited to equity


           -  

               -  

             -  

             -  

2,632

             -  

             -  

2,632

Share-based payment charge treated as consideration, credited to equity


           -  

               -  

             -  

             -  

542

             -  

             -  

542

Distributions in respect of cancelled share options


           -  

               -  

             -  

             -  

(1,782)

             -  

             -  

(1,782)

Tax credit on share options


           -  

               -  

             -  

             -  

-

             -  

(1,888)

(1,888)

Transfer on exercise and lapse of options


           -  

               -  

             -  

             -  

-

             -  

-

-

Dividends paid


           -  

               -  

             -  

             -  

           -  

             -  

(3,547)

(3,547)

 

Balance at 31 December 2022

 

 

2,962

318,183

31,983

(22,933)

14,714

25,729

55,662

426,300

Profit for period


-

-

-

-

-

-

10,880

10,880

Exchange differences on translating foreign operations


-

-

-

-

-

(11,920)

-

(11,920)

Total comprehensive (expense) / income for

the period

 

-

-

-

-

-

(11,920)

10,880

(1,040)

Issue of shares net of share issue costs


5

516

-

-

-

-

-

521

Reserves transfer






-



-

Share based payment charge / credited to equity


-

-

-

-

3,081

-

-

3,081

Share based payment consideration debited to equity


-

-

-

-

(121)

-

-

(121)

Tax credit on share options


-

-

-

-

-

-

-

-

Transfer on exercise and lapse of options


-

-

-

-

-

-

-

-

Dividends paid


-

-

-

-

-

-

(9,094)

(9,094)

Transactions with owners

 

5

516

-

-

2,960

-

(9,094)

(5,613)

Balance at 30 June 2023

 

2,967

318,699

31,983

(22,933)

17,674

13,809

57,448

419,647

 

 


Consolidated statement of cash flows

 

Note

Six months to

30 June 2023

£'000

Six months to

30 June 2022

£'000

Year to

31 Dec 2022

£'000

Cash flow from operating activities





Profit before taxation


16,477

18,004

40,502

(Loss)/profit before taxation from discontinued operations

5

(1,452)

486

(26)

Adjustments for:-





Loss on disposal of PPE and right-of-use assets


893

232

230

Share based payment charge


3,081

4,061

7,235

Amortisation of intangible assets


20,880

21,359

43,183

Depreciation of plant and equipment

11

745

2,334

2,141

Depreciation of right-of-use assets

11

2,128

2,140

4,343

Impairment of Goodwill and acquired intangibles


-

-

7,958

Finance expense

7

257

306

573

Interest on borrowings

7

6,986

3,297

9,102

Acquisition-related contingent consideration and earn-outs

6

1,088

2,254

3,273

Fair value movement on contingent consideration


-

-

(21)

Payment of acquisition-related contingent consideration and earn-outs


(4,726)

(6,163)

(6,139)

Profit on sale of joint venture


-

(1,242)

(1,242)

Share of profit in equity accounted investment


-

(155)

(155)

Interest income

7

(539)

(108)

(429)

Operating cash flow before working capital changes


45,818

46,805

110,528

Decrease/(increase) in trade and other receivables


24,189

8,113

(6,521)

Increase in inventory


(70)

(3,727)

(1,210)

(Increase)/decrease in amount recoverable on contracts


(6,187)

(10,222)

3,647

Decrease in payables


(31,190)

(14,213)

(14,317)

Cash generated from operations

 

32,560

26,756

92,127

Income tax paid


(5,904)

(8,151)

(20,180)

Net cash flow from operating activities

 

26,656

18,605

71,947

Cash flow used in investing activities

 

 

 

 

Purchase of property, plant and equipment


(490)

(289)

(1,641)

Development of intangible assets


(6,707)

(4,700)

(9,966)

Sale of Investment in associates or joint ventures


-

2,300

2,300

 

Net cash flow used in investing activities

 

(7,197)

(2,689)

(9,307)






Cash flow (used in)/from financing activities





Dividends paid

8

-

-

(9,062)

Cash generated from issue of shares, net of share issue costs


521

293

1,037

Repayment of bank loans


(15,409)

(30,496)

(38,458)

Interest paid1


(11,147)

(3,851)

(4,609)

Interest received


539

108

352

Contingent consideration payments in the period


-

-

(705)

Interest paid on lease liabilities


(261)

(334)

(614)

Cash payments for the principal portion of lease liabilities


(2,977)

(3,707)

(6,719)

Net cash flow (used in)/from financing

 

 

 

 

activities

 

(28,734)

(37,987)

(58,778)






Net (decrease) / increase in cash and cash equivalents


(9,275)

(22,071)

3,862

Cash and cash equivalents at beginning of the period/year


94,847

83,850

83,850

Effects of foreign exchange rate changes


(7,440)

10,154                                      

7,135

Cash and cash equivalents at end of the period/year

14

78,132

71,933

94,847

 

 

1 Interest paid for six months ending 30 June 2023 (£11.1 million) is higher than interest charged for the same period (£6.9 million), mainly as the last six months interest of 2022 were paid in January 2023 as per the lending agreement.


 Notes to the consolidated financial statements for the six months to 30 June 2023

 

1.       General information

 

Learning Technologies Group plc ("the Company'') and its subsidiaries (together, "the Group'') provide a range of learning and talent software and services to corporate customers. The principal activity of the Company is that of a holding company for the Group, as well as performing all administrative, corporate finance, strategic and governance functions of the Group.

 

The Company is a public limited company, which is listed on the AIM Market of the London Stock Exchange and domiciled in England and incorporated and registered in England and Wales. The address of its registered office is 15 Fetter Lane, London, England, EC4A 1BW. The registered number of the Company is 07176993.

 

2.      Basis of preparation

 

The unaudited condensed consolidated interim financial information has been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2022 annual report.

 

The interim results for the six months to 30 June 2023 are unaudited and do not therefore constitute statutory accounts in accordance with Section 434 of the Companies Act 2006.

 

Statutory accounts for the year ended 31 December 2022 have been filed with the Registrar of Companies and the auditor's report was unqualified, did not contain any statement under Section 498(2) or 498(3) of the Companies Act 2006 and did not contain any matters to which the auditors drew attention without qualifying their report.

 

The accounting policies used in preparing the interim results are the same as those applied to the latest audited annual financial statements.

 

Going concern

 

The Group meets its day-to-day working capital requirements from the positive cash flows generated by its trading activities and its available cash resources. These may be supplemented, if required, by additional drawings under the Group's committed $50.0 million revolving credit facility (RCF) which is available until October 2025; refer to Note 17 for further details.

 

The Group continues to hold a strong liquidity position as at 30 June 2023, with gross cash and cash equivalents of £78.1 million (Note 14). Net debt of £108.4 million includes a fully drawn $265.0 million term loan which is repayable in quarterly instalments of $9.6 million commencing in December 2022 (Note 17) (31 December 2022: gross cash was £94.8 million and net debt was £119.8 million). Whilst there are a number of risks to the Group's trading performance, as summarised in the 'Principal risks and uncertainties' section on pages 27 - 28 within the 2022 Annual Report, the Group is confident of its ability to continue to access sources of funding in the medium term.

 

The directors report that they have re-assessed the principal risks, reviewed current performance and forecasts, combined with expenditure commitments, including capital expenditure, and borrowing facilities. The Group's forecasts demonstrate it will generate profits and cash in the year ending 31 December 2023 and beyond and that the Group has sufficient cash reserves to enable it to meet its obligations as they fall due, as well as operate within its banking covenants, for a period of at least 12 months from the date of signing of these financial statements. 

 

The Directors have concluded that it is appropriate to adopt the going concern basis of accounting in preparing the interim financial information, having undertaken a review of a reforecast for 2023 and the impact this forecast has on the Group's gross cash, net debt and ability to meet bank covenants under the existing facilities agreement. 

 

Alternative performance measures

 

The Group has identified certain alternative performance measures ("APMs") that it believes will assist the understanding of the performance of the business. The Group believes that Adjusted EBIT, adjusting items, SaaS and long-term contracts, transactional revenue, total equity per share and net cash / debt provide useful information to users of the financial statements. The terms are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, IFRS measures.

 

Adjusting items

 

The Group has chosen to present an adjusted measure of profit and earnings per share, which excludes certain items which are separately disclosed due to their size, nature or incidence, and are not considered to be part of the normal operating costs of the Group. These costs may include the financial effect of adjusting items such as, inter alia, restructuring costs, impairment charges, amortisation of acquired intangibles, costs relating to business combinations, one-off foreign exchange gains or losses, integration costs, acquisition-related share-based payment charges, contingent consideration and earn-outs, cloud computing configuration and customisation costs,  joint venture profits, profit on sale of a joint venture and fixed asset and right-of-use asset disposal gains or losses.



 

3.      Segment analysis

 

Geographical information

 

The Group's revenue from external customers and non-current assets by geographical location are detailed below.

 

 

 

 

 

 

 

 

 

UK

   Europe

North America1

Asia Pacific

Rest of world

   Total

 

£'000

   £'000

£'000

£'000

£'000

     £'000

 







Six months to 30 June 2023







Revenue from continuing operations

33,023

26,916

194,875

17,637

12,131

284,582

Total Revenue

33,023

26,916

194,875

17,637

12,131

284,582

 







Non-current assets

29,653

900

493,927

17,270

451

542,201

 







 







Six months to 30 June 2022







Revenue from continuing operations

30,357

26,463

189,383

18,859

12,774

277,836

Revenue from discontinued operations

3,973

-

-

-

-

3,973

Total Revenue

34,330

26,463

189,383

18,859

12,774

281,809

 







Non-current assets

44,246

912

537,933

21,056

630

604,777

 







 







Year to 31 December 2022







Revenue from continuing operations

58,679

71,637

407,343

21,824

29,104

588,587

Revenue from discontinued operations

8,315

-

-

-

-

8,315

Total Revenue

66,994

71,637

407,343

21,824

29,104

596,902

 







Non-current assets

31,017

569

527,634

19,177

417

578,814

 

1 The values as presented for Canada and the United States for the six months to 30 June 2022 have been combined into 'North America' to align with the geographical segmentation as reported to the Chief Operating Decision Maker internally.

 

The total non-current assets figure is exclusive of deferred tax assets in each of the periods above.

 

The non-current assets as at 30 June 2022 have been represented following the prior year acquisition measurement adjustments as detailed in the Annual Report for the year ended 31 December 2022.

 

 


3.   Segment analysis (continued)

 

Information about reported segment revenue, profit or loss from continuing operations and assets

 



 




 

 

 

 

 

Software & Platforms

Content & Services

Other

Total

 

On-Premise Software Licences

Hosting & SaaS

Platforms Professional Services & Other

Support and Maintenance

 Total

Global Services

Regional Services

Other Technical Services

 Total

Rental Income

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Six months to 30 June 2023





 




 


 

 












Saas and long-term contracts

15,191

50,249

2,057

1,958

69,455

44,142

90,311

2,183

136,636

189

206,280

Transactional

-

31

3,386

-

3,417

9,724

50,991

14,170

74,885

-

78,302

Revenue

15,191

50,280

5,443

1,958

72,872

53,866

141,302

16,353

211,521

189

284,582

Depreciation and amortisation





(3,978)




(2,391)


(6,369)

Adjusted EBIT

 

 

 

 

18,050

 

 

 

24,876

189

43,115

Amortisation of acquired intangibles





(8,995)




(7,581)

-

(16,576)

Acquisition related adjusting items





(1,046)




(1,192)

-

(2,238)

Other adjusting items





(287)




(833)

-

(1,120)

Finance (expenses)/income





(1,717)




(4,987)

-

(6,704)

Profit before tax

 

 

 

 

6,005

 

 

 

10,283

189

16,477

Additions to intangible Assets





1,717




4,990


6,707

Total assets

 

 

 

 

204,547

 

 

 

594,255

 

798,802

 



 




 

 

 

Six months to 30 June 2022



 




 

 

 

 



 




 

 

 

Saas and long-term contracts

15,104

52,395

1,983

2,020

71,502

40,106

82,097

3,214

125,417

70

196,989

Transactional

-

42

3,931

-

3,973

3,698

56,128

17,048

76,874

-

80,847

Revenue

15,104

52,437

5,914

2,020

75,475

43,804

138,225

20,262

202,291

70

277,836

Depreciation and amortisation





(3,673)




(2,865)


(6,538)

Adjusted EBIT

 

 

 

 

19,217

 

 

 

24,298

70

43,585

Amortisation of acquired intangibles





(9,249)




(8,741)

-

(17,990)

Acquisition-related adjusting items





(787)




(3,792)

-

(4,579)

Other adjusting items





317




848

-

1,165

Finance expenses





(1,134)




(3,043)

-

(4,177)

Profit before tax

 

 

 

 

8,364

 

 

 

9,570

70

18,004

Additions to intangible Assets





4,433




267


4,700

Total assets

 

 

 

 

236,858

 

 

 

635,061

 

871,919


3.   Segment analysis (continued)

 

Effective with this interim report, there are changes to the grouping of businesses within the reportable segments, including restating the prior year's comparative result. 

 

Adjusted EBIT is the main measure of profit reviewed by the Chief Operating Decision Maker.

 

The total assets figure is inclusive of deferred tax assets in each of the periods above. 

 

Information about major customers

 

In the six months to 30 June 2023 no customer accounted for more than 10 per cent of reported revenues (Six months to 30 June 2022: no customer accounted for more than 10 per cent of reported revenues).

 

4.      Taxation

 

Current and deferred tax for the six months to 30 June 2023 has been calculated by applying the jurisdictional statutory rates on an entity-by-entity basis to derive the Group's total income tax expense. This is allocated to current and deferred tax as outlined below:

 

 

 

Six months to

Six months to

Year to

 

 

30 June 2023

30 June 2022

31 Dec 2022

 

 

£'000

£'000

£'000

Current tax:





Tax on profits for the period/year


-

1,860

(282)

Adjustments in respect of prior periods / years


1,449

134

2,522

Foreign current tax on profits for the period / year


9,034

11,091

19,193

Total current tax


10,483

13,085

21,433






Deferred tax:





Origination and reversal of temporary differences


(5,836)

(5,830)

(7,459)

Adjustments in respect of prior periods / years


(359)

(87)

(3,597)

Change in deferred tax rate


(143)

(3,235)

(307)

Total deferred tax


(6,338)

(9,152)

(11,363)

 





Income tax expense


4,145

3,933

10,070

 

Of the total income tax expense, £4,472,000 relates to taxation on continuing operations (six months to June 2022 expense £3,841,000 and year to 31 December 2022 expense £9,784,000).



 

5.      (Loss) / Profit on discontinued operations, net of tax

 

The table below show the results of the discontinued operations which are included in the Group Income Statement and Group Statement of Cash Flows respectively.

 

 

 

Six months to

30 June 2023

Six months to

30 June 2022

Year to

31 Dec 2022

 

 

 

£'000

£'000

£'000

Revenue


-

3,973

8,315

Operating expenses


(1,452)

(3,487)

(8,341)



 



Operating (loss) / profit


(1,452)

486

(26)



 



Adjusted EBIT


(1,389)

486

1,018

Adjusting items included in Operating (loss) / profit


 



  (Loss) / profit on disposal of fixed assets


(1)

-

3

  Closure costs


(62)

-

(1,047)

Operating (loss) / profit


(1,452)

486

(26)



 



(Loss) / Profit before taxation


(1,452)

486

(26)

 


 



Taxation


327

(92)

(286)

 


 



(Loss) / Profit after taxation


(1,125)

394

(312)

 

 

 

 

Six months to

30 June 2023

Six months to

30 June 2022

Year to

31 Dec 2022

 

 

 

£'000

£'000

£'000

Net cash (used in) / from operating activities


(1,452)

486

(29)

Net cash from investing activities


-

-

3

Net cash from discontinued operations

 

(1,452)

486

(26)

 



 

6.      Adjusting items

 

These items are included in the normal operating costs of the business, but are significant cash and non-cash expenses that are separately disclosed because of their size, nature or incidence. It is the Group's view that excluding them from Operating Profit gives a better representation of the underlying performance of the business in the period. Further details of the adjusting items are included below.

 

 

Six months to

Six months to

Year to

 

30 June 2023

30 June 2022

31 Dec 2022

 

£'000

£'000

£'000

Adjusting items included in Operating profit:

 



Acquisition related costs:

 



Amortisation of acquired intangibles

16,576

17,990

35,723

Acquisition-related contingent consideration and earn-outs

1,088

2,254

3,273

Acquisition-related share based payment charge

-

-

542

Fair value movement on contingent consideration

-

-

(21)

Acquisition costs

-

43

304

Integration costs

1,150

2,282

3,512

Total acquisition related costs

18,814

22,569

43,333


 



Other adjusting items:

 



Impairment of goodwill and intangibles

-

-

7,958

Loss on disposal of fixed assets

41

-

5

Loss on disposal of right-of-use assets

852

232

228

Share of profit of joint venture

-

(155)

(155)

Profit on sale of joint venture

-

(1,242)

(1,242)

Cloud computing configuration and customisation costs

122

-

719

Disposal costs

105

-

-

Other income

-

-

(1,469)

Total other adjusting items

1,120

(1,165)

6,044


 



Total adjusting items

19,934

21,404

49,377





 

As outlined above, the material adjustments during the period are made in respect of:

-    

Amortisation of acquired intangibles - the cost of £16.6 million (2022: £18.0 million) is excluded from the adjusted results of the Group since the costs are non-cash charges arising from investment activities. As such, they are not considered reflective of the core trading performance of the Group.

-    

Impairment of goodwill and intangibles and closure provisions - these costs are excluded from the adjusted results of the Group since the costs are one-off charges related to closure of the non-core UK apprenticeship business in early 2023 as announced in 2022.

-    

Acquisition-related share-based payments, contingent consideration and earn-outs - these costs are excluded from the adjusted results since these costs are also associated with business acquisitions and represent post-combination remuneration, which is not included in the calculation of goodwill and also not considered part of the core trading performance of the Group.

 

6.   Adjusting items (continued)

 

-    

Fair value movement on contingent consideration - similar to the above, any adjustments to contingent consideration through profit or loss are excluded from adjusted results on the basis that it is non-cash non-operational income or costs.

-    

Disposal costs relate to the fees incurred for the sale of a non-core asset (see note 19).

-    

Costs of acquisition and integration - the costs of acquiring and integrating subsidiaries purchased.  These costs associated with completed acquisitions are excluded from the adjusted results on the basis they are directly attributable to investment activities, rather than the core trading activities of the Group. Included within the £1.2 million integration costs are legal and professional fees of £0.2 million, an allocation of internal labour for employees who have worked on integration activities during the year of £0.9 million and costs relating to facilities of £0.1 million.

-    

Other income includes amounts received in relation to a contract and is an adjusting item due to its quantum and non-recurring nature.

-    

Cloud computing configuration and customisation costs reflects the impact of a change in accounting policy following review of IFRIC guidance issued in March 2021 relating to capitalisation of cloud computing software implementation costs. Where there is no underlying intangible asset over which we retain control, the Group recognises configuration and customisation costs as an expense.

 

7.   Finance expenses

 

 

 

Six months to

Six months to

Year to

 

 

30 June 2023

30 June 2022

31 Dec 2022

 

 

£'000

£'000

£'000






Interest on borrowings


6,986

3,148

9,102

Net foreign exchange differences


-

908

800

IFRS 16 finance expense


257

305

573

Finance expense


7,243

4,361

10,475






Credit on contingent consideration


-

-

(77)

Interest receivable


(539)

(184)

(352)

Finance income


(539)

(184)

(429)

Net finance expense


6,704

4,177

10,046

 



 

8.   Dividends paid

 

 

 

Six months to

Six months to

Year to

 

 

30 June 2023

30 June 2022

31 Dec 2022

 

 

£'000

£'000

£'000






Final dividends paid


9,094

5,515

5,515

Interim dividend paid


-

-

3,547



9,094

5,515

9,062

 

The declared interim dividend of 0.45 pence per share, amounting to a total dividend payment of £3.6 million, is not included as a liability in these financial statements and will be paid on 27 October 2023 to shareholders on the register at the close of business on 6 October 2023.

 

9.   Earnings per share

 

 

 

Six months to

Six months to

Year to

 

 

30 June 2023

30 June 2022

31 Dec 2022

 

 

£'000

£'000

£'000






Basic earnings per share (pence)


1.376

1.848

3.857






Diluted earnings per share (pence)


1.338

1.798

3.710






Adjusted basic earnings per share (pence)


3.253

3.818

8.443






Adjusted diluted earnings per share (pence)


3.163

3.715

8.121

 

Basic earnings per share is calculated by dividing the profit/loss after tax attributable to the equity holders of the Group by the weighted average number of shares in issue during the period.

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has share options that are dilutive potential ordinary shares.

 

In order to give a better understanding of the underlying operating performance of the Group, an adjusted earnings per share comparative has been included. Adjusted earnings per share is stated after adjusting the profit after tax attributable to equity holders of the Group for certain charges as set out in the table below.

 

Adjusted earnings per share is stated after the impact of the adjusting items disclosed in note 6.

In the six month period ended 30 June 2022, management had excluded the profit or losses on disposal of fixed assets and right-of-use assets and included the impact of financing items (note 7) in their calculation of adjusted earnings per share. 

 

When including the profit or losses on disposal of fixed assets and excluding interest receivable, finance expense on contingent consideration and finance expense on lease liabilities to present earnings per share on a like for like basis, the adjusted basic earnings per share for the period ended 30 June 2022 would have been 3.717p and adjusted diluted earnings per share 3.617p, a difference of 0.101p and 0.098p, respectively.  On a like for like basis for the period ended 30 June 2022 in relation to continuing operations, the adjusted basic earnings per share would have been 3.667p and the adjusted diluted earnings per share 3.568p, a difference of 0.101p and 0.098p, respectively.

 

The calculation of earnings per share from continuing and discontinued operations is based on the following earnings and number of shares.

 



Six months to 30 June 2023

Six months to 30 June 2022

Year to 31 December 2022


Profit after tax

Weighted average number of shares

Pence per share

Profit after tax

Weighted average number of shares

Pence per share

Profit after tax

Weighted average number of shares

Pence per share


£'000

'000

 

£'000

'000

 

£'000

'000

 











Basic earnings per ordinary share

10,880

790,677

1.376

14,557

787,765

1.848

30,406

788,295

3.857

Effect of adjustments:










Total adjusting items (see note 6)

19,997



22,646



50,421



Adjusting items excluded from earnings per share adjustments:










Loss on disposal of fixed assets

-



(232)



-



Profit on disposal of joint venture

-



(1,242)



-



Interest receivable

-



(184)



-



Net foreign exchange gain on borrowings

-



907



-



Finance expense on lease liabilities (IFRS 16)

-



305



-



Income tax (credit)/expense

4,145



3,933



10,070



Effect of adjustments

24,142

-

3.053

26,133

-

3.317

60,491


7.674

Adjusted profit before tax

35,022

-

-

40,690

-

-

90,897



Tax impact after adjustments

(9,305)

-

(1.177)

(10,613)

-

(1.347)

(24,338)


(3.087)

Adjusted basic earnings per ordinary share

25,717

790,677

3.253

30,077

787,765

3.818

66,559

788,295

8.443

Effect of dilutive potential ordinary shares:







 

 

 

Share options

-

22,509

(0.090)

-

21,807

(0.103)


31,310

(0.322)

Adjusted diluted earnings per ordinary share

25,717

813,186

3.163

30,077

809,572

3.715

66,559

819,605

8.121

Diluted earnings per ordinary share attributable to the owners of the parent

10,880

813,186

1.338

14,557

809,572

1.798

30,406

819,605

3.710

 



 

The calculation of earnings per share from continuing operations is based on the following earnings and number of shares.

 


Six months to 30 June 2023

Six months to 30 June 2022

Year to 31 December 2022


Profit after tax

Weighted average number of shares

Pence per share

Profit after tax

Weighted average number of shares

Pence per share

Profit after tax

Weighted average number of shares

Pence per share


£'000

'000

 

£'000

'000

 

£'000

'000

 











Basic earnings per ordinary share

12,005

790,677

1.518

14,163

787,765

1.798

30,718

788,295

3.897

Effect of adjustments:










Total adjusting items (see note 6)

19,934



22,646



49,377



Adjusting items excluded from earnings per share adjustments:










Loss on disposal of fixed assets

-



(232)



-



Profit on disposal of joint venture

-



(1,242)



-



Interest receivable

-



(184)



-



Net foreign exchange gain on borrowings

-



907



-



Finance expense on lease liabilities (IFRS 16)

-



305



-



Income tax (credit)/expense

4,472



3,841



9,784



Effect of adjustments

24,406


3.087

26,041


3.306

59,161


7.505

Adjusted profit before tax

36,411



40,204



89,879



Tax impact after adjustments

(9,632)


(1.218)

(10,521)


(1.336)

(24,052)


(3.051)

Adjusted basic earnings per ordinary share

26,779

790,677

3.387

29,683

787,765

3.768

65,827

788,295

8.351

Effect of dilutive potential ordinary shares:







 

 

 

Share options

-

22,509

(0.094)

-

21,807

(0.101)

-

31,310

(0.319)

Adjusted diluted earnings per ordinary share

26,779

813,186

3.293

29,683

809,572

3.666

65,827

819,605

8.032

Diluted earnings per ordinary share attributable to the owners of the parent

12,005

813,186

1.476

14,163

809,572

1.749

30,718

819,605

3.748

 

.


10.  Intangible assets

 

 

 

Goodwill

Customer contracts and relationships

Branding

Acquired IP

Internal software develop-ment

Total

 

 

£'000

£'000

£'000

£'000

£'000

£'000

Cost

 

 

 

 

 

 

 

At 1 January 2022


337,754

188,860

15,277

90,314

26,199

658,404

Additions


-

-

-

-

4,700

4,700

Foreign exchange differences


      34,404 

10,808                  10,808

      1,396

       7,100

1,202                    -  

     54,910 

At 30 June 2022


    372,158 

199,668                199,668

    16,673

      97,414

32,101              28,844

Additions


-

-

-

-

5,266

5,266

Adjustment related to cloud computing costs


-

-

-

-

(640)

(640)

Reclassified as assets held for sale


(501)

(1,095)

(450)

(28)

-

(2,074)

Impairment


(5,401)

(2,581)

(497)

(59)

-

(8,538)

Foreign exchange differences


1,013

3,129

1,052

2,245

1,089

8,528

At 31 December 2022


367,269

199,121

16,778

99,572

37,816

720,556

Additions


-

-

-

-

6,707

6,707

Foreign exchange differences


(14,025)

(4,354)

(595)

(3,883)

(1,101)

(23,958)

At 30 June 2023


353,244

194,767

16,183

95,689

43,422

703,305









Accumulated amortisation

At 1 January 2022


-

70,947

2,068

23,179

14,838

111,032

Amortisation charged in period


-

10,760

1,466

5,764

3,369

21,359

At 30 June 2022


-

81,707

3,534

28,943

18,207

132,391

Amortisation charged in period


-

9,891

1,590

6,252

4,091

21,824

Reclassified as assets held for sale


-

(182)

(105)

(7)

-

(294)

Impairment


-

(446)

(120)

(14)

-

(580)

Foreign exchange differences


-

2,703

981

1,944

615

6,243

At 31 December 2022


-

93,673

5,880

37,118

22,913

Amortisation charged in period


-

9,367

1,424

5,785

4,304

20,880

Foreign exchange differences


-

(2,080)

(196)

(1,474)

(582)

(4,332)

At 30 June 2023


-

100,960

7,108

41,429

26,635

 

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

 

At 30 June 2022

 

372,158

    117,961

    13,139

      68,471

     13,894 

   585,623

At 31 December 2022


367,269

105,448

10,898

62,454

14,903

560,972

At 30 June 2023

 

353,244

93,807

9,075

54,260

16,787

527,173



 

11.  Property, Plant, equipment and right-of-use assets

 


 

 

 

 

Right of Use Assets


Computer equipment

Property

 

Motor vehicles

Total

Computer equipment

Property

 

Motor vehicles

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Cost

 

 

 

 

 

 

 

 

At 1 January 2022

1,804

438

1,617

3,859

559

23,347

134

24,040

Additions

631

9

7

647

-

587

-

587

Foreign exchange differences

151

31

138

320

21

475

(13)

483

Transfer between cost and depreciation

(11)

-

-

(11)





Disposals

(53)

(1)

-

(54)

(67)

(3,331)

-

(3,398)

At 30 June 2022

2,522

477

1,762

4,761

513

21,078

121

21,712

Reclassifications

1,134

140

(1,274)

-





Additions

884

94

16

994

-

1,475

-

1,475

Foreign exchange differences

1,902

(57)

91

1,936

(9)

(276)

13

(272)

Reclassified as assets held for sale

(236)

(48)

(43)

(327)

-

(278)

-

(278)

Disposals

(538)

(232)

(159)

(929)

(34)

(2,097)

(57)

(2,188)

At 31 December 2022

5,668

374

393

6,435

470

19,902

77

20,449

Additions

415

12

63

490

-

1,316

-

1,316

Foreign exchange differences

(154)

262

(121)

(13)

(2)

(232)

-

(234)

Disposals

(1,706)

(23)

(142)

(1,871)

-

(313)

-

(313)

At 30 June 2023

4,223

625

193

5,041

468

20,673

77

21,218

 

Accumulated Depreciation





At 1 January 2022

281

124

222

627

186

6,596

13

6,795

Charge for the period

675

103

123

901

86

2,366

34

2,486

Disposals





(14)

(1,790)

-

(1,804)

At 30 June 2022

956

227

345

1,528

258

7,172

47

7,477

Charge for the period

944

167

129

1,240

75

1,763

19

1,857

Reclassifications

129

-

(129)

-





Disposals

(480)

(221)

(148)

(849)

(6)

(560)

(22)

(588)

Reclassified as assets held for sale

(178)

(47)

(43)

(268)

-

(105)

-

(105)

Foreign exchange differences

1,765

(10)

172

1,927

-

-

-

-

At 31 December 2022

3,136

116

326

3,578

327

8,270

44

8,641

Charge for the period

558

97

90

745

58

2,055

15

2,128

Disposals

(1,704)

(23)

(105)

(1,832)

-

-

-

-

Foreign exchange differences

(18)

253

(118)

117

-

-

-

-

At 30 June 2023

1,972

443

193

2,608

385

10,325

59

10,769

 









Net book value









At 30 June 2022

1,566

250

1,417

3,233

255

13,906

74

14,235










At 31 December 2022

2,532

258

67

2,857

143

11,632

33

11,808










At 30 June 2023

2,251

182

-

2,433

83

10,348

18

10,449










 



 

12.  Trade receivables

 

 

 

30 Jun

30 Jun

31 Dec

 

 

2023

2022

2022

 

 

£'000

£'000

£'000



 



Trade receivables


109,890

128,384

140,951

Allowance for impairment losses


(4,122)

(5,512)

(4,926)



105,768

122,872

136,025

 

The Group's normal trade credit term is 30-60 days. Other credit terms are assessed and approved on a case-by-case basis.

 

The fair value of trade receivables approximates their carrying amount, as the impact of discounting is not significant. No interest has been charged to date on overdue receivables. 

 

In accordance with IFRS 15, the Group has disclosed trade receivable balances net of the associated contract liabilities, as outlined below.  These balances will be shown net until the earlier of either the date the payment becomes due and a receivable is recognized or the date that the services are delivered and an associated contract asset is recognized.

 

 

 

30 Jun

30 Jun

31 Dec

 

 

2023

2022

2022

 

 

£'000

£'000

£'000



 



Contract liabilities offset within trade receivables above


3,981

7,085

6,639

 

13.  Other receivables, deposits and prepayments

 

 

30 June 2023 

30 June 2022 

31 Dec 2022 

 

£'000

£'000

£'000





Sundry receivables

6,742

4,258

6,767

Prepayments

7,878

13,618

9,998


14,620

17,876

16,765

 

Sundry receivables as at 30 June 2022 have been adjusted relating to the impact of prior year acquisition measurement period adjustment (see the Annual Report for the year ended 31 December 2022).



 

14.  Cash and cash equivalents, restricted cash and short-term deposits

 

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less:

 

 

30 June 2023 

30 June 2022 

31 Dec 2022 

 

£'000

£'000

£'000





Cash and cash equivalents

78,132

71,933

94,847

 

Restricted cash balances comprise amounts held on behalf of third parties and employees as part of the Employee Stock Purchase Plan ('ESPP'):

 

 

30 June 2023 

30 June 2022 

31 Dec 2022 

 

£'000

£'000

£'000





Restricted cash

2,303

3,158

2,608

 

15.  Deferred tax assets / liabilities

 

The movement in deferred tax assets and liabilities prior to offsetting are shown below:

 

Deferred Tax Assets

Share options

Tax losses

Short-term timing differences

Intangibles

Total

 

£'000

£'000

£'000

£'000

£'000

At 31 December 2022

3,622

5,248

12,814

4,939

26,623







Deferred tax charged directly to the income statement

-

1,920

1,058

-

2,978

Exchange rate differences

(48)

(166)

(507)

(198)

(919)

Changes in tax rate

-

124

36

-

160







At 30 June 2023

3,574

7,126

13,401

4,741

28,842

 

Deferred Tax Liability

Intangibles

Accelerated tax depreciation

Short-term timing differences

 

Total

 

£'000

£'000

£'000

 

£'000

At 31 December 2022

46,541

615

2,648


49,804







Deferred tax charge directly to the income statement

(4,284)

(9)

1,075


(3,218)

Deferred tax charged directly to equity

(1,402)

-

-


(1,402)

Exchange rate differences

-

(26)

(118)


(144)

Changes in tax rate

-

-

18


18







At 30 June 2023

40,855

580

3,623


45,058



 

15.  Deferred tax assets / liabilities (continued)

 

The total deferred tax assets and liabilities subject to offsetting are presented below:

 

 

Total Deferred tax assets

Total Deferred tax liabilities

 

30 June

2023

£'000

30 June 2022

£'000

31 Dec

2022

£'000

30 June

2023

£'000

30 June 2022

£'000

31 Dec

2022

£'000


 






Prior to offsetting

28,842

19,682

26,623

45,058

41,199

49,804

Offset of tax

(21,511)

(15,098)

(22,539)

(21,511)

(15,098)

(22,539)

After offsetting

7,331

4,584

4,084

23,547

26,101

27,265

 

The deferred tax assets and liabilities have been represented in the balance sheet as at 30 June 2022 to reflect the requirements of IAS12 to offset deferred tax assets and liabilities when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.   This has resulted in a reduction of deferred tax assets and liabilities included in non-current assets and non-current liabilities respectively of £15.1 million. There is no impact on net assets, cash flow or reserves.

 

16.  Trade and other payables

 

 

 

 

30 June 2023 

30 June 2022 

31 Dec 2022 

 

 

 

 

£'000

£'000

£'000







Trade payables



15,056

27,919

31,813

Contract liabilities



74,292

80,431

99,303

Tax and social security



11,574

23,188

22,300

Contingent consideration



-

-

21

Acquisition-related contingent consideration and earn-outs



1,610

4,776

4,876

Accruals and other payables



39,049

38,156

22,321

 



141,581

174,470

180,634

 

Trade payables as at 30 June 2022 have been adjusted relating to the impact of prior year acquisition measurement period adjustment (see the Annual Report for the year ended 31 December 2022).



 

17.  Borrowings

 

The Group has a debt facility dated 15 July 2021 with HSBC UK Bank PLC, HSBC Innovation Bank Limited, Barclays Bank PLC, Fifth Third Bank NA and The Governor and Company of the Bank of Ireland.

 

At the outset this comprised two committed term loans, Term Facility A, with an original commitment of $265.0 million available to the Group until October 2025 and Term Facility B for $40.0 million, subsequently fully repaid in March 2022. 

 

The facilities available also include a $50.0 million committed Revolving Credit Facility (£39.6 million at the period-end exchange rate) and a $50.0 million uncommitted accordion facility (£39.6 million at the period-end exchange rate), both available until July 2025.  The term facility attracts variable interest based on LIBOR plus a margin of between 1.25% and 2.75% per annum, based on the Group's leverage to December 2023, following this it attracts SOFR plus the margin discussed above and an adjusted credit spread until repaid.

 

Term Facility A is repayable with quarterly instalments, starting December 2022, of $9.6 million (c £7.6 million at the period-end exchange rate) with the balance repayable on the expiry of the loan in October 2025. Term Facility B was repayable in full in April 2022 but was fully repaid early in March 2022.

 

The bank loan is secured by a fixed and floating charge over the assets of the Group and is subject to financial covenants that are tested quarterly based on a calendar year.

 

The financial covenants are that the Group must ensure that its interest cover ratio is at least 4.0 times and its leverage ratio does not exceed 3.0 times. The interest cover and leverage ratio is not a statutory measure and so its basis and composition may differ from other leverage measures published by other companies.

 

The interest cover ratio is the ratio of EBITDA to Finance Charges and the leverage ratio is total net debt on the last day of the relevant period to adjusted EBITDA for that relevant period. Both numerator and denominator in each calculation comprise several adjustments as defined in the debt facility agreement and as such are not directly calculable from the financial statements.

 

The Group was compliant with all financial covenants throughout the period and as at 30 June 2023, the Group's interest cover was 8.96 and its leverage ratio was 0.94.

 

The lease liabilities have arisen on adoption of IFRS 16 and are secured by the related underlying assets.

 


30 June 2023 

30 June 2022 

31 Dec 2022 


£'000

£'000

£'000

Current interest-bearing loans and borrowings

31,220

23,845

36,714

Non-current interest-bearing loans and borrowings

155,289

193,367

177,944

Current lease liabilities

4,162

8,194

5,082

Non-current lease liabilities

8,486

13,196

9,792


199,157

238,602

229,532

 

Net debt reconciliation

 

Net debt can be analysed as follows:


30 June 2023 

30 June 2022 

31 Dec 2022 


£'000

£'000

£'000

Cash and cash equivalents

78,132

71,933

94,847

Borrowings:




-     Term loan

(186,509)

(217,212)

(214,658)

Net debt

(108,377)

(145,279)

(119,811)

 

18.  Provisions      

 


Property provisions

Litigation and regulation provisions

Onerous contract provisions

Closure provisions

Total

£'000

£'000

£'000

£'000

£'000


 

 

 

 

 

1,075

6,489

1,024

-

8,588

 

(242)

 

-

 

(212)

-

 

(454)

-

-

-

-

-

At 30 June 2022

833

6,489

812

-

8,134

Charged / (released) to the income statement

208

(3,769)

(431)

-

(3,992)

Paid in the period

(143)

(2,260)

-

-

(2,403)

Additions

204

-

-

1,047

1,251

Foreign exchange movements

(99)

461

107

-

469

At 31 December 2022

1,003

921

488

1,047

3,459

Released to the income statement

-

-

(319)

(62)

(381)

Paid in the period

(86)

(11)

-

(718)

(815)

Additions

6

-

-

-

6

Foreign exchange movements

(64)

(37)

(13)

-

(114)

At 30 June 2023

859

873

156

267

2,155







Current

325

873

156

267

1,621

Non-current

534

-

-

-

534

At 30 June 2023

859

873

156

267

2,155

 

The provisions as at 1 January 2022 have been restated to include the impact of measurement period adjustments as described in the Annual Report for the year ended 31 December 2022.

 

19.  Assets and liabilities classified as held for sale

 

In December 2022, the Group decided to dispose a non-core business as soon as practicable and communicated this decision internally and to investors on 19 December 2022.  This business was acquired as part of the GP Strategies acquisition in October 2021.

 

Following its classification as held for sale the asset group is held at the lower of fair value less costs to sell and net book value.



 

19.  Assets and liabilities classified as held for sale (continued)

 

Effect of the assets and associated liabilities on financial position of the Group

 

30 Jun

31 Dec

 

2023

2022

 

£'000

£'000

Non-current assets



Goodwill

501

501

Intangible assets

1,279

1,279

Property, plant and equipment

53

58

Right of use assets

143

173


1,976

2,011

Current assets



Trade receivables

3,629

5,299

Other receivables, deposits and prepayments

180

82

Amounts recoverable on contracts

910

977


4,719

6,358




Assets in disposal groups classified as held for sale

6,695

8,369




Current liabilities



Lease liabilities

16

77

Trade and other payables

3,984

3,809


4,000

3,886

Non-current liabilities



Lease liabilities

137

98

 



Liabilities directly associated with assets in disposal groups classified as held for sale

4,137

3,984

 

The net assets held for sale as at 30 June 2023 exclude deferred tax assets of £39,000 (31 December 2022: £39,000) and current tax liabilities of £635,000 (31 December 2022: £412,000) which remain within the Group tax position.

 

The Group expects to recover greater than the net book value from the eventual sale which is progressing well and we expect to provide a further update before the end of the year.

 

20.  Events after the balance sheet date

 

On 5 September 2023, the Group sold its 17% investment in LEO Brasil Tecnologia Educacional Ltda (formerly Epic Brasil Tecnologia Educacional Ltda) for proceeds of R$3 million (£0.5 million), realising a gain on sale of £0.4 million.

 

 



 

Glossary

Alternative Performance Measures

In reporting financial information, the Group presents alternative performance measures ("APMs") which are not defined or specified under the requirements of IFRS. The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional useful information on the underlying trends, performance and position of the Group and are consistent with how business performance is measured internally. The alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other companies' alternative performance measures. The key APMs that the Group uses are outlined below.

 

 

Closest equivalent IFRS measure

Reconciling items to IFRS measure

Definition and purpose

Income Statement Measures

Adjusted EBIT

Operating profit

Adjusting items

Adjusted EBIT excludes adjusting items. A reconciliation from Adjusted EBIT to Operating profit is provided in the Consolidated statement of comprehensive income.

Adjusting items

None

Refer to definition

Items which are not considered part of the normal operating costs of the business, are separately disclosed because of their size, nature or incidence are treated as adjusting. The Group believes the separate disclosure of these items provides additional useful information to users of the financial statements to enable a better understanding of the Group's underlying financial performance. An explanation of the nature of the items identified as adjusting is provided in Note 6 to the financial statements.

Saas and long-term contracts

Revenue

Refer to Note 3

Saas and long-term contracts are defined as the revenue streams of the Group that are predictable and expected to continue into the future upon customer renewal.

Transactional

Revenue

Refer to Note 3

Transactional revenue is defined as the revenue streams of the Group that arise from one-off fees or services that may or may not happen again.

Balance Sheet Measures

Net cash or debt

None

Refer to Note 17

Net cash / debt is defined as Cash and cash equivalents and short-term deposits, less Bank overdrafts and other current and non-current borrowings. A reconciliation is provided in Note 17 to the financial statements.

Total equity  per share

None

Refer to definition

Calculated as Total Equity at the end of the period/year divided by the number of shares in issue at the end of the period/year, The shares in issue at 31 December 2022 were 789,824,841 (based on Note 26 of the 2022 Annual report) and 791,160,022 at 30 June 2023.

Cash Flow Measures

Adjusted operating cash flow

None

Refer to definition

Cash flow in the period after accounting for operating activities and capital expenditure.

Cash conversion

None

Refer to definition

Adjusted operating cash flow as a percentage of Adjusted EBIT.

Free cash flow

None

Refer to definition

Cash flow in the period after accounting for operating activities, investing activities, lease payments, interest and tax.

 

 

Company information

 

 

Directors

Andrew Brode, Non-Executive Chairman

Jonathan Satchell, Chief Executive Officer

Kath Kearney-Croft, Chief Financial Officer

Piers Lea, Chief Strategy Officer

Simon Boddie, Non-executive Director

Aimie Chapple, Non-Executive Director

Leslie-Ann Reed, Non-Executive Director

 

Company Secretary

Claire Walsh

 

Company number

07176993

 

Registered address

15 Fetter Lane

Ground Floor

London

England

EC4A 1BW

 

 

Independent auditors

BDO LLP

Chartered Accountants and Statutory Auditors

55 Baker Street

London

W1U 7EU

 

Nominated adviser and joint broker

Numis Securities Limited

10 Paternoster Square

London

EC4M 7LT

 

Joint broker

Goldman Sachs

Plumtree Court

25 Shoe Lane

London

EC4A 4AU

 

Legal advisers

DLA Piper U.K LLP

160 Aldersgate Street

London

EC1A 4HT

 

 

 

 

Registrar

Computershare Investor Services plc

The Pavilions

Bridgewater Road

Bristol

BS13 8AE

 

Principal Bankers

HSBC UK Bank plc

71 Queen Victoria Street,

London, EC4V 4AL, UK

 

HSBC Innovation Bank Limited

Alphabeta, 14-18 Finsbury Square,

London, EC2A 1BR, UK

 

Fifth Third Bank NA

142 W 57th Street,

Suite 1600,

New York, NY 10019, USA

 

Barclays Bank plc

1 Churchill Place,

London, E14 5HP, UK

 

The Governor and Company of the Bank of Ireland

4th Floor, Bow Bells House,

1 Bread Street,

London, EC4M 9BE, UK

 

 

Communications consultancy

FTI Consulting LLP

200 Aldersgate

Aldersgate Street

London

EC1A 4HD

 

 

 

 

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