LTG joined Aim in late 2013 after its previous iteration, Epic, completed the reverse takeover of In-Deed Online, a listed cash shell. A few months later, management acquired peer Line to create LEO, the group's flagship e-learning business that counts Jaguar Land Rover and Sky among its clients. It went on to acquire Preloaded - a learning games business - and in July 2015 it purchased Eukleia, which provides digital training in governance, risk and compliance to the financial services industry.
Takeovers, together with brisk trading, underpinned strong growth in the first half of 2015. LTG's sales rose 29 per cent, driving adjusted cash profits up 47 per cent to £1.3m. The British Museum tasked Preloaded with helping visitors use their smartphones and tablets to explore and engage with exhibits. Management also reported strong adoption of gemo - its cloud-based, self-authoring tool - as the likes of Nike, Burberry, Xerox and Santander used it to create e-learning courses for employees and update them on product and strategy developments.
Above: LTG's market cap has more than tripled in the past two years. Source: S&P Datastream
LTG has gathered further momentum in the past six months. In December, it partnered with accounting giant KPMG to sign a three-year contract with the entire UK civil service. Its largest-ever deal centres on delivering 'blended learning' courses, which combine digital, informal and classroom components, to more than 400,000 government employees. Management expects to incur significant upfront costs, but anticipates financial benefits in the second half of 2016.
The group recently agreed to acquire Rustici Software, the global market leader in enabling communication between learning management systems and online learning content. As part of the deal it also took a 30 per cent stake in Watershed Systems, which has developed a next-generation learning analytics platform. That should help LTG to refine its training courses and offer richer insights to customers.
Broker Numis hiked its forecasts in response to the Rustici deal. It now expects cash profits to climb nearly three-quarters to £7.5m this financial year, sending EPS up 41 per cent to 1.1p.
