Learning Technologies Share Discussion Threads

[euclid5] 29/1/2016 12:16

so they are part funding this with a $20m loan - guess better than a large placing

The consideration for Rustici comprises an initial payment of USD26 million of which USD20 million will be paid in cash

The transactions will be part funded by a USD20 million term loan. The loan is amortised over 5 years, repayable in quarterly instalments with a final bullet payment in January 2019.

[tarrant777] 29/1/2016 10:08

£15m on introduction to AIM. £140m this morning, with I suspect a bit of upward momentum still to go.
£200m during 2016?
Still not a big company- but clearly an ambitious executive team who seem to have all the necessary qualities to go all the way.

[multibagger] 29/1/2016 09:47

We have bought some excellent IP in terms of the SCORM platform and 30% of Watershed - this will be transformational in terms of scale, recurrence of revenue and profit margins. With more and more training going online and agile working, increasing governance, risk and compliance requirements for corporates - LTG has a massive market and is an early and successful mover.

Looks like profit enhancing from Day 1 and 4 year record of 41% CAGR - this will be cash cow. Our leaders (Brode and Satchell) have stellar track records and own about 56% of the equity - they have put their hands in the pockets and ample skin in the game. LTG is dividend paying.

Minimal equity dilution and payment structured to retain top talent of acquired company. Also with USD strengthening, this could improve our revenue profile.

May sound a bit overpriced in terms of PE - but these are the kind of companies that Silicon Valley biggies take a look at, when they are bigger in scale.

I am very pleased - LTG is one of my 2016 stockpics in the UK stockchallenge :)

[ramridge] 29/1/2016 09:22

The acquisition is very attractive but I have been put off by LTG's valuation which seems too rich.
A forward PE of 38.8 and Price/ Sales ratio of 7.23.

As the acquisition is immediately earnings enhancing, the PE will come down but in today's market, IMO it would still be too rich?

[tarrant777] 29/1/2016 09:12

Brokers target price lifted to 39p.
2016/17 promising to be a very exciting time for the company.

[multibagger] 29/1/2016 08:41

I have added another 50k shares(33.90p) and then a further 64.2k shares(36.4p)...very tightly held, so premium justified and to me makes sense for the medium to longer term.

[multibagger] 29/1/2016 08:39

Superb, cracking much bigger than expected acquisition which gives LTG far greater reach - this is transformational....

Learning Technologies Group PLC Acquisition
29/01/2016 7:00am
UK Regulatory (RNS & others)

Learning Tech. (LSE:LTG)
Intraday Stock Chart

Today : Friday 29 January 2016
Click Here for more Learning Tech. Charts.

TIDMLTG

RNS Number : 3802N

Learning Technologies Group PLC

29 January 2016

Learning Technologies Group plc

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

Acquisition of Rustici and 30% stake in Watershed

LTG has conditionally agreed to acquire the entire issued share capital of Rustici Software LLC ("Rustici"), the global market leader in digital learning interoperability, for an initial consideration of USD26 million from its founders, Mike Rustici and Tim Martin. Simultaneously, LTG will provide a USD3 million cash investment for a 30% equity stake in Watershed Systems Inc. ("Watershed"), developer of the next generation learning analytics platform. Both transactions will be funded through a mix of cash and shares and are conditional on issue of consideration shares and transfer of funds. The Board anticipates the transactions to be materially EPS enhancing in 2016 and beyond. Completion is expected to be announced shortly.

Rustici was established in Nashville, USA in 2002 and has been instrumental in the support and development of the universal technical standards for the e-learning software industry. It is the acknowledged global leader in SCORM (Sharable Content Object Reference Model) conformance. SCORM is the de facto industry standard for e-learning interoperability, allowing online learning content and learning management systems to communicate and work together.

Rustici is also the co-creator of the next generation of learning interoperability standards, Tin Can API, or xAPI. This global standard was created to capture rich data on every aspect of learning experiences. To utilise and exploit this data, the founders created a separate business, Watershed, which has developed a SaaS based learning analytics service to fully ascertain the impact and effectiveness of learning programmes.

Gathering learning data and in turn utilising this data to create more effective learning experiences and tangible business results, is the next significant advance for the learning industry and Watershed is at the forefront of this development.

Tim Martin will remain the CEO of Rustici under LTG's ownership and Mike Rustici will focus exclusively on Watershed to accelerate the development of this young, high growth business.

Highlights

-- Rustici 4 year revenue CAGR of 41% underpinned by c. 80% recurring revenue
-- Increases the Group's scale, capability and credibility as an international, multi-service

e-learning business

-- Significant growth opportunities for Rustici and existing LTG businesses driven by the benefits from the addition of this capability within the Group

-- The Rustici acquisition will be immediately and substantially earnings enhancing/accretive

-- Watershed investment places LTG at the forefront of creating and utilising 'big data' to develop pioneering e-learning content and systems

In the year ended 31 December 2015, Rustici generated unaudited revenue of USD6.6 million and EBITDA of USD2.7 million, with c. 80% of its revenue in recurring subscription fees, derived from products such as SCORM Engine which enables e-learning content to communicate securely with learning platforms, an essential requirement for the entire e-learning industry.

Consideration

The consideration for Rustici comprises an initial payment of USD26 million of which USD20 million will be paid in cash and USD6 million in new LTG shares, issued at a price of 29.19 pence per share. Cash consideration will be adjusted to take account of surplus cash of USD0.5 million in Rustici at completion. Further performance based payments, capped at USD11 million, are payable to the Rustici vendors and key employees based on ambitious revenue growth targets in each of the years ending 31 December 2016, 2017 and 2018, payable with up to 25% in new LTG shares at the option of the Company, and the remainder in cash.

LTG will invest USD3 million in Watershed for a 30% equity stake. This stake is prior to a further investment by Launch Tennessee, a public-private partnership focused on supporting the development of high-growth companies in Tennessee, of USD1 million, the effect of which will be to subsequently reduce LTG's equity stake to 27.27%.

The transactions will be part funded by a USD20 million term loan. The loan is amortised over 5 years, repayable in quarterly instalments with a final bullet payment in January 2019.

Jonathan Satchell, Chief Executive of LTG, commented:

"Consistent with our strategy of establishing an international full-spectrum e-learning business, acquiring Rustici, the global market leader in SCORM conformance, firmly places LTG at the heart of the e-learning industry. Further, our investment in Watershed positions LTG in the vanguard of the industry's future standard, xAPI. This will provide the Group with invaluable insights and a competitive advantage on a platform that will have a profound and long-lasting impact on the digital learning industry."

Enquiries


Learning Technologies Group plc [phone]
Jonathan Satchell, Chief Executive
Neil Elton, Group Finance Director

Numis Securities Limited [phone]
Stuart Skinner/Michael Wharton (Nominated
Adviser)
James Serjeant (Corporate Broker)

Instinctif Partners [phone]
Matthew Smallwood


Notes to Editors

About Learning Technologies Group plc

Learning Technologies Group (LTG) was created with the purpose of building a market-leading business of substance and scale within the exciting and fast-growing learning technologies sector.

LTG's award-winning businesses are at the forefront of innovation and best-practice in the learning technology sector.

LTG aims to create a learning technologies business with revenues in excess of GBP50m which it will achieve through organic growth complemented by strategic acquisitions.

LTG listed on the Alternative Investment Market of the London Stock Exchange (AIM) in November 2013 and has since made a number of strategic acquisitions to grow its business:

2014 Line Communications ("LINE")

2014 Preloaded

2015 Eukleia

LINE was merged with the original business, Epic, to form LEO, a market-leading learning technologies firm with unrivalled capability to provide custom solutions to its corporate and public clients. It is joined by BAFTA-winning applied games studio Preloaded, who bring learning games specialism to the Group and Governance, Risk and Compliance (GRC) experts Eukleia.

Since admission to AIM, LTG's market capitalisation has risen from c. GBP15m to GBP122m at close of business on 28 January 2016.

About the Standards

Since 2000, the e-learning industry has relied on a standard called SCORM that was developed by the US Department of Defense (DoD). Rustici Software is the world's foremost expert on SCORM. Its technology is embedded in hundreds of e-learning products and is essential for ensuring that they work well together.

In 2012, the DoD commissioned Rustici Software as its partner to lead the industry wide development of the next generation of SCORM, called the Experience API (xAPI) or the Tin Can API. This new standard is enabling a huge wave of innovation and disruption in an industry that has largely been confined by 16-year-old technology.

SCORM is limited to capturing data about a very small fraction of the training and learning we do (just what happens in a self-paced e-learning course taken in a formal LMS). The Experience API allows us to capture data about all the experiences a learner has, such as watching a video, attending a course or being mentored by a peer.

This flood of data means that for the first time the industry will have the information it needs to take an analytical, data-driven approach to training and learning programs. Watershed LRS is a tool that aggregates all that data and creates actionable insights about employee training and performance.

This information is provided by RNS

The company news service from the London Stock Exchange

END

[tarrant777] 28/1/2016 14:50

You are right. Andrew Brode is a very astute business man chairing two businesses that could reasonably claim to be best in class in the UK, and with ambitions (see the major RWS acquisition in the US recently) to make a world wide reputation.
Very positive trading statement has seen the stock price of LTG move north, but arguably could have been more if the equity markets were not so jumpy!
Certainly one to keep a close eye on.

[microscope] 28/1/2016 14:21

Just 'learning' about this stock, big fan of Andrew Brode's work at RWS. He's getting on a bit now but a shrewd cookie. Very nice trading update from this stock I see, high on the watchlist.

[multibagger] 20/1/2016 07:24

DYR ONOne :)

[onjohn] 20/1/2016 07:23

still going to lose money for a few more years

[multibagger] 20/1/2016 07:13

Excellent progress report :)

Cash at £7m, no debt and acquisitions being actively sought, strong second half trading...financial implications for 2016 significantly beneficial and 2017 transformational


RNS Number : 3746M

Learning Technologies Group PLC

20 January 2016

Learning Technologies Group plc

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

Pre Close Update

Learning Technologies Group plc, the leading e-learning company, is pleased to announce a trading update for the year ended 31 December 2015.

Profit for the year is in-line with expectations with the Group having generated excellent EBITDA margins in the second half of the year. Cash generation remains strong with net cash at 31 December 2015 of GBP7.0 million (2014: GBP4.4 million). The Group has no debt.

The year saw the Company continue to build on the foundations that were laid in 2014. 2015 included the acquisition of Eukleia Training Limited ("Eukleia") in July which added specialist governance, risk and compliance expertise to the Group, particularly in the financial services sector. The integration of Eukleia is complete and the business is trading in line with expectations.

In December 2015, LEO Learning Limited, in a strategic alliance with KPMG UK LLP ("KPMG"), won a formal tender process to provide learning and development services for the entire UK Civil Service ("CSL"). This is a landmark deal which endorses the Group's strategy to build a multi-discipline e-learning business of scale. The contract is for a period of 3 years, with CSL having the option to extend the agreement by a further year. Delivery of the initial learning components will commence in March 2016 and be complete by September 2016. The financial implications for the Group are expected to be significantly beneficial in 2016 and transformational in 2017 onwards.

In addition to CSL, recent contract wins provide LTG with a strong platform as it enters 2016.

The Group continues to pursue exciting new strategic contract opportunities and is actively seeking to acquire suitable businesses as part of its commitment to build an international e-learning business with revenues of at least GBP50 million and EBITDA margins in excess of 20 per cent. We expect to update the market on progress during Q1 2016.

It is anticipated that the preliminary results for the year ended 31 December 2015 will be announced towards the end of March 2016.

Andrew Brode, Chairman said:

"LTG has made good progress in 2015 delivering on its strategy of consolidating the fragmented e-learning industry and is optimistic about acquisition opportunities on both sides of the Atlantic.

As demonstrated by recent contract wins, customers value the comprehensive blended learning services, strategic insight and solutions, and international reach, scale and responsiveness that the Group is able to offer."

20 January 2016

Enquiries


Learning Technologies Group plc [phone]
Jonathan Satchell, Chief Executive
Neil Elton, Group Finance Director

Numis Securities Limited [phone]
Stuart Skinner/Michael Wharton (Nominated
Adviser)

[multibagger] 04/1/2016 08:32

Looks promising this morning and hard to pick up in any decent quantity.

Good luck all :)

[multibagger] 30/12/2015 19:24

Hi Cottoner, I'm sure you will do exceedingly well and good luck !

An old presentation from 27 Oct 2015 but excellent in terms of understanding the company and potential, though I appreciate you may have already seen it.

I had posted a link but ADVFN software is repeatedly removing the link to the Tech Capital 27 Oct 2015 event, that LTG presented at. I found it by following the news links at the company website which leads onto the proactive investors website.

The only downside IMHO at the moment is the market cap relative to revenues, but I guess that with an ambitious £50m in revenues being targeted, this will hopefully soon be justified. Not much floating stock with about 61% not in public hands and Brode and Satchell holding about 56%. Liontrust,Hargreave Hale and Nigel Wray on board. Numis projects £20m revenues with 20% EBITDA for the year ending Dec 2015. Gross margins are very attractive.

Maiden dividend declared with progressive dividend policy being indicated.

No debt at the moment, but acquisitions being planned with debt gearing at
2x EBIDTA max being considered (LTG also hold about £3m cash). I guess the next acquisition could be in the £10-12m range(my guess) and US based.

A number of large (? multimillion pound) contracts being bid for.....either US acquisition or contract(s) happening will cause this to re-rate rapidly.

The LTG "buy and build/consolidation of a fragmented market" in the UK software space seems to the flavour of the season and I have added LTG to my stable of CTP, MXCP, IDEA, PHD, ARC, ISPY as part of my thematic "multibagger software fund".

Good luck all :)

Edited: 31 Dec 2015

[cottoner] 30/12/2015 13:32

Thanks mb , if I do half as well in the 2016 challenge I'll be happy. :-)

[multibagger] 30/12/2015 12:31

Congrats Cottoner on your stock challenge victory !

LTG seems to be at the cusp of significant uptrend in the next few months...I have been building a position :)

[cottoner] 23/12/2015 10:29

A few trades (all buys) currently reported today on ISDX :


23/12/2015 09:51 3,980 @ 29.999
23/12/2015 09:30 333 @ 29.999
23/12/2015 09:25 10,000 @ 29.7
23/12/2015 08:27 5,172 @ 29

[cottoner] 23/12/2015 09:38

Continuing on up.

[cottoner] 22/12/2015 14:13

A buy above asking and now currently no stock available online.

edit - so someone sells a few!!

[cottoner] 22/12/2015 12:45

Interest seems to be increasing.

[tarrant777] 22/12/2015 08:50

Find it difficult to understand the financial benefit to the company of the recent huge contract win, but if the company give positive guidance at some stage, it is easy to see the stock price moving north strongly.
In any event I'm not sure that I understand ONjohn's comments above re losses as the company is already reporting positive EBITDA numbers.

[cottoner] 21/12/2015 15:33

Breaking out today.

[onjohn] 16/12/2015 17:59

still going to lose money for a few more years

[stopaloss] 16/12/2015 16:51

p1966

I had a similar problem with this shares liquidity I tried to sell 10,000 at the beginning of the month having lost patience with it when the price dropped to 20p. I was unable to do so and kept reducing the amount to see if I could sell any. Eventually I could sell 2,700 but didn't think it was worth it so held on to them. About a week later the price went up to 22p and I tried a dummy trade and could have sold the whole 10,000 but by then I was wondering why they had started to move and held on to them again. Now I am thinking about selling for a reasonable profit. I agree with the Times that this could be a transformational deal for the company but still feel that further progress will be news driven and in the meantime the price could drift down again. And the liquidity problem will remain. Will hold for now.

[cottoner] 15/12/2015 13:27

In today's Times

Few deals or contracts are truly transformational, but the selection of Learning Technologies Group to provide learning and development services to the UK’s 400,000 civil servants looks as if it could be one. The work, being done in partnership with KPMG, will require some significant investment upfront but will start to yield benefits from the second half of next year. It is the biggest contract the company has won, and the market clearly liked it — the shares on AIM ended up by nearly 10 per cent.