MIDAS SHARE TIPS UPDATE: Our tip Learning Technologies goes up 12-fold in just 7 years
Jonathan Satchell, like Supreme’s Sandy Chadha, was not one for academia. After getting five O-levels at school in 1984, his headmaster reckoned that Satchell had the aptitude but not the attitude for A-levels and should go out into the big bad world of commerce.
Sound advice. Satchell now runs Learning Technologies Group (LTG) valued on the Stock Exchange at almost £1.75billion. Helping firms to run training and evaluation courses, LTG started trading on AIM in 2013 and was recommended by Midas the following year, when the shares were 20p. The price has soared to £2.21 since then and there is more growth to come.
LTG did not escape unscathed from the Covid-19 pandemic. Demand for some services fell and 2020 profits were maintained at just over £39million. But Satchell used the time well, buying complementary businesses at low prices and ensuring that his company was well positioned for recovery. The approach worked.
Helping hand: Learning Technologies Group is valued on the Stock Exchange at almost £1.75billion
Last week, LTG unveiled interim figures showing double-digit sales and profit growth, with a 20 per cent rise in the half-year dividend to 0.3p. Brokers expect annual turnover to surge by 32 per cent to £175million with profits climbing 22 per cent to £48.5million and the total dividend up 13 per cent to 0.85p.
Satchell also pulled off his most audacious deal to date earlier this summer, buying New York-listed GP Strategies for £284million. GP’s turnover is double that of LTG and the US group counts businesses such as General Motors and HSBC among its clients. The firm has a big presence in Asia too, so LTG can work with more customers in more places than ever before.
GP may be big but it is far less profitable than LTG. Satchell has a history of turning inefficient firms around and is confident of doing the same with his latest purchase.
If all goes to plan, the deal should turbocharge growth at LTG, sending sales well over £500million next year and even higher in 2023. Profits and dividends should follow suit.
Midas verdict: Shareholders have been richly rewarded by Learning Technologies and they may be tempted to sell at £2.21. But Satchell remains as driven as ever, online training is a fast-growing field and GP Strategies should take this business to a new level. Cautious investors could reduce their holdings just in case the US deal goes awry. For Satchell supporters, however, this remains a strong hold.
Traded on: AIM Ticker: LTG Contact: ltgplc.com or 020 7832 3440
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