Back in 2013, when Indeed Online morphed from being a shell company to an eLearning services company called Learning Technologies Group with the £16.3m purchase of Epic, the Board of LTG targeted a strategy to grow annual revenues to £50mln. With the interim results announced in September, the Board have met their target a year ahead of schedule.
Whilst there have been various acquisitions along the way, with the Group adding brands such as Preloaded, Leo, Rustici and NetDimensions to the original Gomo (though the Epic brand has disappeared), the Group is clear to point out that organic growth is a major contributor.
H1 results saw revenues grow 68%, with the NetDimensions acquisition having a major impact, but the improvement still includes 33% organic growth (the Civil Service Learning contract provides nearly 12% of revenue).
Stripping out the one-off impact of the major CSL contract and favourable foreign exchange movements, underlying organic revenue growth is still in the region of 18%. In his interviews, Jonathan Satchell noted that 20% of the organic growth came from gomo, preloaded & rustici. He noted Leo had strong first half of sales which will see revenue will grow significantly in H2.
According to Jonathan, the new strategic objectives announced this week "demonstrate our undiminished ambition and intent to become the global leader and disrupter in technology-driven workplace learning”.
The new objectives run to the end of 2020, and sees LTG aiming to double revenues to £100 million and for EBIT to exceed £25 million, with growth being both organic as well from acquisitions.
Finance for any acquisitions is planned to come through the use of internally generated operating cash flows and debt financing (a debt facility was negotiate early in the year as part of the NetDimensions acquisition).
Growth opportunities are seen in the North American and European markets as well as diversifying into other sectors, particularly in highly regulated markets.
"We are delighted with the progress that Learning Technologies Group has made, growing a business with revenues of GBP7.5 million and a market capitalisation of less than GBP20 million in late 2013 to run-rate revenues of GBP50 million, strong Ebit margins, and a market capitalisation in excess of £300 million in only four years," said Chief Executive Officer Jonathan Satchell.
With £11m cash in the bank, flexibility in its’ debt financing as well as a boost from an “update to the terms of a major contract” that will see the financial impact of the contract coming this year instead of next, we’re expecting some movements on the acquisition front in the not too distant future.
How the revenue has changed - The NetDimensions impact:
30/06/17
|
30/06/16
| ||
H1 Revenue
|
£'000
|
£'000
| |
Content
|
9935
|
6109
|
62.63%
|
Software Licences
|
5396
|
3279
|
64.56%
|
Hosting and SaaS Licences
|
2883
|
309
|
833.01%
|
Support and Maintenance
|
437
|
330
|
32.42%
|
Consulting
|
472
|
440
|
7.27%
|
Platform development
|
1406
|
572
|
145.80%
|
Other
|
943
|
1746
|
-45.99%
|
Total
|
21472
|
12785
|
67.95%
|
Jonathan Satchell H1 result interviews:
