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IMO concern over the debt - but now given the reassurance of the PBT + potential cost savings + growth prospects and the debt coverage cushion (despite higher interest charges).
Dominant market player in their sector enables them to rise prices that can be easily absorbed by customers.
PE(f) per stocko - c12 - historically cheap compared to previous PER
II returning in droves.
Should be back to 400s
01-Feb-23 09:10:16 142.50 110,000 Buy* 141.80 142.40 156.75k O
01-Feb-23 09:10:06 142.50 100,000 Buy* 141.80 142.60 142.50k O
01-Feb-23 09:10:06 142.50 100,000 Buy* 141.80 142.60 142.50k O
Why do they keep things in the dark?
Famous last words - I reckon the results are going to be pretty stellar. Why?
- CEO has tons of shares - he has plenty of skin in the game
- order book MUST be known in advance in respect of projects going forward (at least 6-12 months) - to ensure planning of staff. Expectations must have been set based on these.
- management consultancy is set to grow in 2023 - I reckon peeps think it might retract but even in a recession - companies are going digital / spending on digitalisation / restructuring etc.
- very strong H1 so H2 expectations should not be strenuous to achieve.
- last investor presentation @ 8/12/20 - management appeared relatively confident reiterating current year expectations (so this was 23 days before the year end). Of course, they can not disclose new info - but my reading was that it was pretty positive.
- NED bought shed loads of shares in Nov 23 - before the "closed period" at similar sp.
- they might be eyed up by one of the big boys for a potential TO - would not surprise me.
PE ratio is up there but take a butchers at their CAGR + profitability and tell me that they don't justify a high valuation.
Results out imminently.
These must have been discounted buys - SP has moved up and not down after these transactions
31-Jan-23 08:16:58 570.00 35,000 Sell* 560.00 590.00 199.50k O
31-Jan-23 08:16:49 570.00 34,210 Sell* 556.00 590.00 195.00k O
https://www.mca.org.uk/press-releases/strong-growth-in-management-consulting-expected-in-2023-according-to-biggest-uk-survey#:~:text=The%20latest%20Member%20Survey%20from,of%20economic%20uncertainty%20and%20change.
Some big buys coming in - TU warmly received by II
For a growth company - according to Goldman, ths is growing at PE(f) of c12 - must be way too low for this quality company.
I reckon today's TU is a turning point for this company.
This is the IC article in Sept 22 - after interims. SP was 130p then -
Learning Technologies group is recession resistant
The company provides essential corporate learning which should stay in demand through a slowdown
September 22, 2022
By Arthur Sants
Expects to deliver ahead of analyst consensus for full year
Increased interim dividend
Learning Technologies Group (LTG) provides a 'blended' corporate education service to its clients. By ‘blended’, management means a combination of in-person and remote learning. As it is corporate tutorage, as opposed to say, maths or history, there is an element of necessity, particularly in matters of compliance.
LTG:LSE
Learning Technologies Group PLC
1mth
Today change
0.83%Price (GBP)
121.90
This may sound a little dry. However, it means LTG is reasonably recession-proof. Compliance training is essential for businesses as it is often mandated by regulators. The tail risk for businesses in cyber security and GDPR is also very high. A small expense on training could save them a large pay-out in the future.
Broker Goldman Sachs agrees with this thesis, saying that LTG is “insulated but not immune from macro”. Management admits there is some “discretionary” training, but that it makes up only around £30mn of revenue. Group revenue was £282mn for the half year, which gives it a margin of safety.
The only issue would be if customers went bankrupt. This seems unlikely given most of the customers are blue-chip names and based in America. The GP Strategies purchase provides a lot more exposure to the US market which will be more resilient than Europe next year. In the half year, £184mn of revenue was generated in the US – equal to 65 per cent of group sales.
SaaS and long-term contract revenue as a proportion of total revenue fell from 77 per cent last year to 71 per cent this year. The GP Strategies purchase diluted the recurring revenue proportion and it diluted group margins because GP does mostly in-person training, rather which is more costly. The group adjusted operating margin dropped 111 basis points to 15.6 per cent from last year.
Management is keen to point out that margins at GP Strategies are improving. Last year, the operating margin was 4.5 per cent before moving up to 10.5 per cent in the first half of this year. In May and June of this year it was 12.6 per cent. GP Strategies like-for-like revenue growth was 4.6 per cent on a constant currency basis.
LTG expects to deliver ahead of consensus expectations for the full year. Goldman Sachs upgraded its 2023 EPS forecast to 9.71p up from 8.74p. This gives an affordable looking 2023 PE of 12.2. A B2B product which is mostly essential to businesses is enticing in an economic downturn. We stick to buy.
Last IC View: Buy, 134p, 03 May 2022
Fab results. Upgrade very likely particularly given its strength in recessionary times
This was a ghost town during covid
https://twitter.com/i/status/1618353020999278607
Reuters (@Reuters) tweeted at 6:25 am on Wed, Jan 25, 2023:
Tourists swarm gambling hub Macau over Lunar New Year after COVID curbs dropped https://t.co/fFPymdrSjA https://t.co/fRM7YPW8MR
Reuters (@Reuters) tweeted at 6:25 am on Wed, Jan 25, 2023:
Tourists swarm gambling hub Macau over Lunar New Year after COVID curbs dropped https://t.co/fFPymdrSjA https://t.co/fRM7YPW8MR
At this rate, wouldn't be surprised to find management being on the top list of shorters of this stock. Joke!
Shambolic - how could they not know.
I'm out.
Happened with MCL, CEO sells before a poor TU - joke.
Luckily, a very small position.
MS could have bought SDN for a 300% premium - loose change for them.
https://www.fool.com/investing/2023/01/17/microsoft-just-acquired-a-chip-design-startup-what/#:~:text=After%20rumors%20surfaced%20that%20Microsoft,the%20ballpark%20of%20%24190%20million
Sea of blue today. Nice TU. Should be upwards now.
Some peeps may be put off with cash issue but
1 - they got through Covid without dilution - i.e. no placement / issuance of further shares for money
2 - got loads of headroom with existing bank facility (£8mn I believe is max ceiling)
3 - net debt is falling
4 - profits rising (should hopefully translate to higher FCF to pay down the debt)
5 - business booming with tailwinds
6 - dirt cheap valuation (PE c5.5)
From now to the FY results showtime (May '23), if they can demonstrate further progress with reduction in debt + strong sales and pipeline / ARR - will further fly.
Back on track.
BTW - busy board!
Might be the uncertainty over the debt.
Similarly, CNIC, from my observations (I do not hold) , went through this kind of phase, where uncertainty pervades. This is until the company can prove that they can consistently perform time and time again.
So likewise LTG will need to demonstrate that their profits can cover their debts and reduction in debt. If they can + an ahead of expectation TU = rerating
IMO - LTG is going to rerate come the imminent TU - below is IC Sept 22 after release of the interims. Info below is based on SP of 130p - So PE(f) must be c11 - which is way too cheap.
Learning Technologies group is recession resistant
The company provides essential corporate learning which should stay in demand through a slowdown
September 22, 2022
By Arthur Sants
Expects to deliver ahead of analyst consensus for full year
Increased interim dividend
Learning Technologies Group (LTG) provides a 'blended' corporate education service to its clients. By ‘blended’, management means a combination of in-person and remote learning. As it is corporate tutorage, as opposed to say, maths or history, there is an element of necessity, particularly in matters of compliance.
LTG:LSE
Learning Technologies Group PLC
1mth
This may sound a little dry. However, it means LTG is reasonably recession-proof. Compliance training is essential for businesses as it is often mandated by regulators. The tail risk for businesses in cyber security and GDPR is also very high. A small expense on training could save them a large pay-out in the future.
Broker Goldman Sachs agrees with this thesis, saying that LTG is “insulated but not immune from macro”. Management admits there is some “discretionary” training, but that it makes up only around £30mn of revenue. Group revenue was £282mn for the half year, which gives it a margin of safety.
The only issue would be if customers went bankrupt. This seems unlikely given most of the customers are blue-chip names and based in America. The GP Strategies purchase provides a lot more exposure to the US market which will be more resilient than Europe next year. In the half year, £184mn of revenue was generated in the US – equal to 65 per cent of group sales.
SaaS and long-term contract revenue as a proportion of total revenue fell from 77 per cent last year to 71 per cent this year. The GP Strategies purchase diluted the recurring revenue proportion and it diluted group margins because GP does mostly in-person training, rather which is more costly. The group adjusted operating margin dropped 111 basis points to 15.6 per cent from last year.
Management is keen to point out that margins at GP Strategies are improving. Last year, the operating margin was 4.5 per cent before moving up to 10.5 per cent in the first half of this year. In May and June of this year it was 12.6 per cent. GP Strategies like-for-like revenue growth was 4.6 per cent on a constant currency basis.
LTG expects to deliver ahead of consensus expectations for the full year. Goldman Sachs upgraded its 2023 EPS forecast to 9.71p up from 8.74p. This gives an affordable looking 2023 PE of 12.2. A B2B product which is mostly essential to businesses is enticing in an economic downturn. We stick to buy.
Last IC View: Buy, 134p, 03 May 2022
Cheers GGG