StockMarketWire.com - Learning Technologies (LTG) continued to strengthen margins while making excellent progress in delivering on our strategic ambition of building an international business with revenues in excess of £50 million and delivering profits in line with expectations.

In December 2015 the company said that alongside its strategic partner KPMG UK, LTG won a landmark contract to design and deliver blended courses that incorporate a combination of digital, informal and classroom components for the entire UK Civil Service (CSL).

We have already created a substantial number of learning components and will have delivered the entire library by the year-end.

We expect to see revenues begin to accrue in Q4 2016 with the majority of returns expected in 2017 and 2018.

In January 2016 we announced the acquisition of Rustici Software in the US, the acknowledged global leader in digital learning interoperability, which enables online learning content and management systems to communicate and work together.

Rustici has substantial recurring revenues and has performed ahead of our expectations in the first half of 2016.

In the same month the Group also made a 27% investment in Watershed Systems.

Watershed has developed a SaaS-based learning analytics capability, which evaluates the impact and effectiveness of learning programs.

Although at an early stage of development, Watershed is making excellent progress, signing up a number of global clients and generating compelling and objective insights into the effectiveness of e-learning interventions.

LTG has maintained strong operating cash flows, whilst investing in the upfront costs of the CSL project.

At 30 June 2016 gross cash was £4.3 million (31 December 2015: £7.3 million).

As part of the financing of the Rustici acquisition the group entered a $20 million, three year term loan.

At 30 June 2016 net debt was £9.9 million (31 December 2015: net cash of £7.3 million).

While it is too early to identify any potential implications from the UK's likely exit from the European Union, we are confident that our strategic ambitions will ensure continued progress.

Approximately 32% of LTG's business is undertaken for clients outside of the UK and a growing percentage of LTG's revenues are denominated in USD and Euros.

Net USD cash inflows are used as an approximate internal hedge against the USD loan capital and interest repayments and, therefore, the business' overall exposure to exchange rate volatility is limited.

The Group continues to pursue acquisition opportunities particularly in the US and UK.

We are also pleased that margins have strengthened further through improved working practices and increased scale, and the Board is optimistic about the prospects for LTG in H2 2016.

LTG chairman Andrew Brode said: "LTG has made significant progress in the first half of 2016.

"With the acquisition of Rustici and investment in Watershed in January, LTG is delivering on its ambition to build a diversified international learning technology business of scale.

"The group continues to invest in its industry leading portfolio of learning technologies and service offerings and the board is optimistic about the prospects for LTG in the second half of 2016 and beyond."




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