24 January 2025

Learning Technologies Group plc

("LTG", the "Group" or the "Company")

(AIM: LTG)

Full year trading update and update on Affirmative Action and DEI in USA

Learning Technologies Group plc, a global market leader in digital learning and talent management, announces a trading update for the year ended 31 December 2024 and an outlook for 2025. All figures relate to the year ended 31 December 2024 unless otherwise stated.

The Board expects to deliver Group Revenues for continuing operations of not less than £485 million, within the range of £473 million to £493 million stated in LTG's half year results on 17 September 2024¹.  Revenues declined by c.5% on an organic constant currency basis as ongoing macroeconomic, political and AI uncertainty continued to affect customer budgets for LTG's technologies and services.

The Board anticipates Adjusted EBIT for continuing operations to be not less than £86 million. As previously indicated in LTG's trading update included in the Scheme document of 20 December 2024, this is at the lower end of the range stated on 17 September 2024. Adjusted EBIT margin is expected to be c.17.7% (2023: c.17.3%²).

The Group had net cash of £3.0 million at 31 December 2024, a significant improvement on net debt of £78.6m as at 31 December 2023.  The net cash position reflects LTG's strong cash generation and the post-tax proceeds of the sale of Vector.

Update on Affirmative Action and DEI in USA

On 21 January 2025, President Trump rescinded Executive Order 11246, which since 1965 had imposed Affirmative Action planning obligations on federal contractors in addition to non-discrimination requirements.  As a result of this order, corporations in the US who are servicing federal contracts will no longer have to comply with Affirmative Action requirements from Q2 2025.  Affirmity, a business wholly owned by LTG, provides software and services that assist US clients to comply with such Affirmative Action planning regulations.

We expect some corporate clients to continue using Affirmity's services and other clients to significantly reduce or no longer take those  services. Under this new Executive Order non-discrimination obligations still exist, and we expect to be able to continue to assist our clients with those and other data requirements. While it is too early to quantify the exact impact of this change, we expect President Trump's Executive Order to have a highly material impact on Revenue and Adjusted EBIT at Affirmity for 2025 and beyond, which generated c.$21m and c.$10m respectively in 2024. We are actively assessing how to meet the evolving needs of Affirmity's extensive customer base and will update the market as the situation becomes clearer.

GP Strategies US Regulatory Update

As a US company that performs work for the US Government, GP Strategies requires certain approvals and is subject to restrictions intended to protect classified information. In July 2024, LTG was notified by GP Strategies of the invalidation ("temporary suspension") of the eligibility for GP to work on new classified contracts.

The GP Strategies executive team continues to be in constant dialogue with the DCSA (Defense Counterintelligence and Security Agency) and is making good progress on resolving the issues pertaining to certain approvals, with full resolution our key objective. A new subsidiary, solely focused on all forms of federal US Government contracts, has been established and is operational for non-classified contracts from January 2025.  It has applied for approval to work on classified contracts and expects the application process to conclude within H1 2025.

2025 Outlook

Ongoing macroeconomic and political uncertainty continue to affect the decision-making of the Group's customers and reduce the budgets allocated for LTG's technologies and services.  Whilst the LTG Board remains confident in the long-term outlook for the business, it anticipates that such headwinds will continue to affect the performance of LTG into 2025. Excluding the impact on Affirmity from the previously mentioned rescinded Executive Order regarding Affirmative Action, the LTG Board expects revenue performance to be flat in the 2025 financial year compared to 2024³.

Recommended Acquisition of LTG by Leopard UK Bidco Limited ("Bidco")

On 4 December 2024, the board of Bidco and the Independent LTG Directors announced that they had reached agreement on the terms and conditions of a recommended acquisition by Bidco of the entire issued and to be issued ordinary share capital of LTG.  The Acquisition is being implemented by means of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act.

On 15 January 2025, LTG announced that it had reached a view that it was in the best interests of the Company and LTG Shareholders taken as a whole to adjourn the Meetings to provide further time for discussions with LTG Shareholders and to allow LTG Shareholders additional time to consider the Acquisition.  The adjourned Court Meeting will start at 10.00 a.m. on 6 February 2025 and the adjourned General Meeting will start at 10.15 a.m. on 6 February 2025 (or as soon thereafter as the adjourned Court Meeting shall have been concluded or further adjourned). The Court Meeting and General Meeting shall be held at the offices of Deutsche Numis at 45 Gresham Street, London, EC2V 7BF.

As set out in the Scheme Document, Bidco has reserved the right to elect to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme (subject to the consent of the Panel and the terms of the Co-operation Agreement).

Enquiries:

About LTG

Learning Technologies Group plc (LTG) is a leader in the growing workplace digital learning and talent management market. The Group offers end-to-end learning and talent solutions ranging from strategic consultancy, through a range of content and platform solutions to analytical insights that enable corporate and government clients to close the gap between current and future workforce capability.

LTG is listed on the London Stock Exchange's Alternative Investment Market (LTG.L) and headquartered in London. The Group has offices in Europe, North America, South America and Asia-Pacific.

Notes

LTG DIRECTORS' CONFIRMATIONS

On 17 September 2024, LTG announced its half year results for the six months ended 30 June 2024. As part of that announcement, the following statement regarding the current trading and outlook for the full financial year to 31 December 2024 was published:

"The Group previously expected revenue to be in the range of £480 to £500 million and adjusted EBIT to be in the range of £88 to £93 million for FY 2024 (adjusting for the completion of the sale of Vector on 1 July). This range was based on an average GBP:USD rate of 1.26 for H2 2024. Based on an average GBP:USD rate of 1.31 for H2, the ranges adjust to £473 to £493 million of revenue and adjusted EBIT of £86 to £91 million for FY 2024 (adjusting for the completion of the sale of Vector on 1 July). The Board expects the Group to be towards the bottom of the range given current trading, in particular at GP Strategies." (the "LTG Statement").

The LTG Statement is made again today in this Part 14 (LTG Directors' Confirmations) as per the above.

The LTG Statement was originally published before the start of the Offer Period. The requirements of Rule 28.1(c) of the Code apply in relation to the LTG Statement.

Basis of preparation and confirmation

The LTG Directors confirm that the LTG Statement remains valid and confirm that the LTG Statement has been properly compiled on the basis of the assumptions stated below and that the basis of accounting used is consistent with LTG's accounting policies.

Assumptions

 The LTG Statement was prepared on the basis of the following assumptions, any of which could turn out to be incorrect and therefore affect the validity of the LTG Statement:

 Factors within the influence and control of the LTG Directors

Factors outside the influence or control of the LTG Directors

Other important factors and information are contained in LTG's most recent annual report and accounts for the 12 months ended 31 December 2023 (including the risks summarised in the section entitled "Principal Risks and Uncertainties"), LTG's most recent interim report for the six months ended 30 June 2024, and LTG's other periodic filings and statements are available at https://www.ltgplc.com/.