Castlefield Stock Story - Learning Technologies Group (LTG)
In this featured stock story, Castlefield's David Gorman introduces AIM-listed Learning Technologies Group (LTG). Held within our AIM Portfolio and Sustainable UK Opportunities fund, LTG is a leader in the fast-growing markets of e-learning and people management software, and aligned to our Education positive investment theme.
Pandemic-induced lockdowns were highly disruptive to many traditional working practices, prompting the working from home revolution and leading many people to reassess their relationship with employment. Hybrid working, which we operate at Castlefield, enables workers to bring more flexibility to their lives and employers to retain good staff.
However, many workers still feel undervalued and it’s no longer enough to offer benefits packages to employees – perks don’t develop or retain staff. Instead, workers are looking for opportunities to grow and further their careers.
In a competitive job market, which we still have, good employees are to be cherished and employers who fail to invest in their people deserve to fall behind.
Just over a year ago, we invested in AIM-listed Learning Technologies Group (LTG), a company which offers some solutions to these big challenges; LTG is a highly acquisitive market leader in the fast-growing markets of e-learning and people management software. The global market for e-learning is growing rapidly, especially post-pandemic.
According to industry experts Global Market Insights[1], the E-Learning market was worth $250 billion in 2020 and is anticipated to grow at a compound annual growth rate of more than 21% between 2021 and 2027. The advent of several new technologies, such as Artificial Intelligence and Virtual Reality will help drive this market growth.
the E-Learning market was worth $250 billion in 2020 (1)
In e-learning, the closure of offices and educational establishments contributed to the rapid rise in online and distance learning enrolments. LTG’s products help organisations to train their workforces and educators to teach.
The talent management market refers to the range of software applications that help companies to optimise the recruitment, performance management, training and remuneration of employees. LTG’s customers are generally mid-size to larger corporates, places of learning and government bodies. The bulk of its sales are generated in the US, especially after the acquisition of GP Strategies in 2021 – a deal which transformed the scale and scope of the company.
What LTG does is best illustrated by a couple of examples. LTG’s Affirmity division (https://www.affirmity.com/) provides expert analysis, consulting, training and software to optimise diversity and inclusion programmes within organisations in the US and here at home. Affirmity’s experts guide HR and compliance teams through diversity goal setting and workforce analytics.
Our investment in LTG plays to our positive theme of Education and the company enjoys good profit margins as well as a high level of recurring revenues.
Open LMS (learning management system) is the world’s biggest commercial Moodle™ provider. Students of all ages will be familiar with Moodle™ (www.moodle.com), which is an open-source e-learning platform widely used by schools and universities in the UK, US and across the world. Lockdowns forced schools, colleges and universities to become eLearning institutions - fast.
Moodle™ was created to help educators design online courses in a collaborative manner and it operates on an open-source basis so users can add new features and functionality to help improve distance teaching and learning.
Our investment in LTG plays to our positive theme of Education and the company enjoys good profit margins as well as a high level of recurring revenues. The company has committed to enhancing its already impressive sustainability credentials and it looks well-placed for further growth in attractive markets.
Written by David Gorman
References:
[1] https://www.gminsights.com/industry-analysis/elearning-market-size