“The LearnAfrica values are encapsulated in the acronym – PRIDE ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Å“ which represents five pairs of principles that guide them wherever they may be, whatever they may be doing.  The principles are: Professionalism and Performance, Reliability and Respect, Integrity and Innovativeness, Devotion and decency, Excellence and Equity”

Source: LearnAfrica website

Lagos-In this interview with PETER OBIORA Online Editor at InvestAdvocate, Fred Ijewere, Managing Director/Chief Executive of Learn Africa Plc takes on issues about the Publishing Company and other matters arising. Excerpts:

Divestment of 51% stake by Pearson and Longman

First and foremost, the relationship has spanned 50 to 51 years now, and I say both organisations has grown to maturity and they both decided it was time to part ways and focus on their areas of comparative advantage.

Status update on the divestment

As at today, they have divested fully and the Nigerians who had the other 49% have received a one for one shareholding. All the Nigerian share units have been doubled effectively. There is obviously a little amount that has been warehoused by the Company Secretary.

FACTS CHECK:

“On March 06 2012 the Company notified The Exchange that the Board of Directors of Pearson Education Limited and Longman Group (Overseas Holdings) Limited. (Collectively the “Majority Shareholders”), have both resolved to divest their combined 51% holdings in Learn Africa Plc. (formally Longman Nigeria Plc. – the “Company”).

The majority shareholders (the Donors) intend to dispose of their 393,450,000 ordinary shares of 50 Kobo each (51% shareholding) of the company (“Shares) by way of gift to the minority shareholders of the company (the “Donees”) on a pro-rata basis. In this respect, the Donors have executed a Deed of Gift pursuant to which the transfer of the shares will be done without consideration. The Donees are not required to take any action to be entitled to receive the shares. However, only shareholders of the company other than the Donors as of the close of business on March 8, 2012 (the “Closure Date”) shall be entitled to the shares.

The divestment is being undertaken to enable the majority shareholders to pursue their strategic focus of operating a broad education business model rather than narrow business model focused exclusively on textbooks which Learn Africa Plc. is presently operating. Due to this strategic mis-alignment, Pearson has withdrawn its trading agreement with Learn Africa Plc. and has incorporated a company: Pearson Educational Publishing Limited, to pursue its strategic objectives of textbook publishing business as well as investment in new areas of the Nigerian education sector, such as digital learning, qualifications, vocational training, teacher development and assessments”.

Source: NSE

Projected dividend payment to investors of the Company for year 2012 end

I would have to say this; we have gone through a transition period. If you consider the uncertainties that surround the divestment, the uncertainties a lot of the shareholders had because the majority stakeholders were moving on and these are foreign partners as well, they were not sure the Nigerians and the new team coming on board was going to be able to man the ship. Not only that, even with the Nigerians, we also did quite a significant change within the Chairmanship and Board Members; including the Managing Director.

These changes obviously will jolt any Company; notwithstanding we managed the Company for the remaining three months of the year and still paid dividend of 25 Kobo in year 2011. We intend on maintain that minimum payment this year and possibly improving on it. With the rebranding, expansion of the Company, consolidation as well as in the Market share that we have always had all these years, we will and should be maintaining the minimum like I said earlier what we did last year and subsequently, we would improve on it.

Rebranding and its impact on your operations

Some facts as to the change of name and divestment should be open; which means that the divestment of Pearson; although they own 51%, the core assets and business of ours is publishing. And we are publishing books, we had close to about 7,000 titles, with the divestment, Pearson took along with it 20% of these titles; while the old Longman; now Learn Africa maintained about 80% of the titles; that tells the public that our core business still remains in publishing. Out of the 20% that Pearson moved on with, a lot of that development came from our core publishing team; but the ownership is theirs. However, within a very short space of time, we have been able to replace those core books; such as the Regional Mathematics which is quite popular, we replaced it with the New Concept Series, since it was our own team that developed it, they have not only replicated that, but improved on it to even meet the Nigerian Education Research and Development Council (NERDC) and International standards as well. Our New Concept Series is also been pushed to other parts of the African Continent where we are seeking to do business. We are looking at doing business in Ghana, Tanzania and Uganda. So, we have come up much stronger as a wholly owned Nigerian entity.

On the appointment of two Directors to your Board

First of all, it was done in trying to meet up with compliance to Corporate Governance policies. We need to also have an Independent Director, someone who didn’t have shares or stake in the Company; but had to come in with his wealth of experience and that was why the choice of Alhaji Awwalu Makarfi as an Independent Director.

Chinedu Iloeje came on because one of their families have a major stake-holding within the organisation and he was elected to a common Board.

EDITOR’s NOTE:

“Both Awwalu Makarfi and Chinedu Iloeje were appointed as Directors to the Board of Learn Africa Plc in 2011”.

What is the holdings structure in the post-divestment era?

The holding structure is in relation to what existed of the Nigerian shares of 49%, it has remained that way. The time the shares were sold to the Nigerians, obviously some of them were sold at that time for liquidity purposes.

Some of your hot selling products

Our hot selling products are core new products we have launched; which are the New Concept Series in Mathematics and English. These books are very colourful, they have been published and produced to take care of the needs of the Nigerian students and focused for that purpose. We also have our subsidiary called Millennium Education Limited; this is because we want Learn Africa to focus on its core business of publishing. Other aspects of the business of Learn Africa; we now call it not just a publishing Company; it is a learning resource Company.

As a Learning Resource Company, there is the part of business of Teacher training which has accompanied the sale of our Books. Apart from the Teachers Guide that we have produced for these Books, Questions and Answers to be precise, Teachers need to be taught not only with the content of the Book; but also the need within the Nigerian Sectors to imbibe in the Teachers new methods of impacting knowledge to students; interactive methods. Recently we got the results of WAEC, which was just about 38.8% students passing five subjects; this is still very poor; but an improvement of last year if I may add.

One of the reasons is that we see this development as been the challenges those Teachers had in impacting knowledge on the Students, the Books are there, so the techniques they are utilising is where the Millennium Education comes in to try and add support to this in providing Teachers training and building the capacity.

The current student Teachers ratio is about one to 40; when you are talking about World Economic statistics that is quite high; which is one of the highest. Nigeria and Malawi fall under this category. All the others are between one to 15 or one to 20. Some classrooms in Nigeria is still hitting about one to 60 which is not good in trying to have direct interaction with the students. These are some of the reasons why we set up the Millennium Education Limited and it is focusing on Teacher Training.

Apart from Teacher Training, we also have the Information Technology (IT); we are looking to the future, we are talking of e-books. The medium with which students are beginning to learn right is very much on the Computers, the internet, e-technology. So we have to position ourselves as well to get involved in that Market. We recently launched the Learn Africa Pad (LA Pad) which is a tablet. It does not contain our core books; people spend so much time on the screen saying they want to read a textbook. So, what you have is a tool that provides supporting material to your core books, dictionaries, encyclopedias, interactive challenging games, like science. Such materials that support core books, some of the Teachers Guide are placed on that as well on what we have as the LA Pad. We are converting some of the Teachers Guide to e-books; these are the core things that Millennium Education is currently focusing on.

When did you launch the LA Pad?

We launched the LA Pad during our unveiling and so far it cost between N30, 000 to N35, 000. There has been a lot of interest from the schools in buying the product. However, some of them are seeking that we put our core curriculum books into the LA Pad; that’s not wise on our part on one hand. First and foremost, we know you cannot spend that much time reading your textbooks on the screen. Secondly, the industry is bedeviled with piracy. This is a major problem for the Publishing Industry. It will not be wise as a Publisher to take your core materials and put it on electronic format; you just make the job much easier for Pirates to take and copy, so it’s not wise to do that. Also, it is not expedient for the students to read these core books on the electronic format, we worry about the radiation emitting from these screens; so why should a child be sitting and stirring at the screen for so long; that’s not wise.

LearnAfrica and its contribution to education development in Africa

This is our first year in launching into the African Continent, it’s a situation of awareness and so far in the countries we have gone to, we have been welcomed with open arms. Apart from the fact that we have Nigeria as the most populous nation on the Continent and seen as a big brother; regardless the drawbacks we had over the years. They are quite welcome to the fact that Nigeria has produced the highest number of PHDs in the world and Graduates and they know in terms of our educational prowess, Nigerians are up there. So, we have been working with open arms and working towards expanding further than these three countries. We intend on working closely with these countries Ministries of Education; telling them our goals and plans for the African continent.

Further than that, the Africa Continent has this challenge to meet with the development goals of the world in general. Therefore, our own educational system must be channeled to satisfy the needs of the African Child. A lot of what we have been doing so far has just been reading textbooks that the Western World has provided for us and have guided us as our priorities. So, it has been easy for the Brain Drain to occur because we naturally just go to where we fit in. When we now start educating our children to face the challenges that we have, using our materials, developing solutions for the problems we have, it will not be easy for the so called Brain Drain to occur; because they are focused on what they can do best here. In our growth potentials, we are not only talking about 7.5% GDP; but much higher because we are solving our problems; especially the infrastructural problems that we have to import so much and use a lot of foreign currency. It’s expensive to deliver such solutions; we should create our own solutions locally and develop them much cheaper.

On your idea of Brain Gain

I attended a session and that issue came up and they did not address how to reverse the Brain drain syndrome. So, I left that evening and had a good think about it. With the facts on ground concerning the GDP, remittances, I said we don’t have a Brain Drain anymore; especially leveraging on technology. What we have now is a Brain Gain; so is for people to now start looking at the other way.

We have about 20 million Nigerians out there; they are assets that are currently bringing in officially US $10 billion annually. The US$10 billion according to World Economic Report only constitutes about 22.5%. If you calculate that, we have about US$45 billion coming into this country on a yearly basis. Our current reserve is about US$36.5 billion and they are bringing in US$45 billion. If those 20 million people happen to be in Nigeria, first of all there will be no work for them; even if there is work for them, they won’t be well remunerated.

So, it is best that they are out there generating income for us, they are contributing 4.5% to our GDP and it’s really fantastic. I am not under any illusion asking them to come back and settle. They should continue doing what they are doing; we can create an avenue for them to participate in the economy. One of the things that I am suggesting is these Universities that a lot of people have left, each of them should set up international offices, Universities abroad have International Students offices; this one will not just be for Students; but International offices which will help to communicate with other Universities abroad, they collaborate, share resources and leverage on technology.

Why are we shy on leveraging effectively on technology, in those good old days? They will use town criers for announcement at the Market Square, but when the Public Address System came up, it was utilised. I ask again, why are we shying away from technology?. We should implement it, Nigerians that are out there can do two jobs if necessary; and out of their dedication or trying to put something back to the country; from their current comfort zone; not only in remittances, but they can lecture Nigerian students wherever they are. We must be creative, think outside the box, because Nigeria’s development needs creativity and innovation to take it well above the 7.5% GDP.

EDITOR’s NOTE:

According to World Bank’s report, Nigeria made $10.045 billion through Diaspora remittance. The World Bank said Nigeria has a strong and growing Diaspora community, especially in the US, Europe and Asia, many of whom are responsible for this remittance flows.

On LearnAfrica’s N97.4 million forecast in Q3 of 2012

We should make this forecast; we are on track for it so far. We have already made a N1.29 billion Turnover in the Half Year Period of 2012 and we should be able to do a minimum of N3.0 billion, that’s what we are looking at. This is the time for our season and what has occurred in the Half Year Period reflects an offseason performance. In the worst case scenario, we would double that.

Why partner Courteville Business Solutions Plc?

Our relationship with Courteville has only just started, we are very much at the embryonic stage and what we want to leverage on is their experience and the facilities they have for our books. We will put our books on their platform so that there is access to buying them on their e-platform. With their platform, you can buy our books online and it will be delivered to you by logistics that have been put in place such as direct courier services to your front door; that’s the nature of the relationship that we are currently working on.

Current trend in the Nigerian Capital Market and how it has impacted on the operations of LearnAfrica

The Stock Market so far has been managed quite well. First of all, we had the global economic crisis; where the subprime mortgage facilities was withdrawn from the system and it created financial problems abroad. Notwithstanding, adequate actions have been taken by our Regulatory Authorities to stem any significant negative effects on the Stock Market and the Nigerian Economy. The Central Bank of Nigeria has been able to reduce the cash liquidity ratios for the Banks, interest rates have been managed to forestall these adverse effects. The Stock Exchange as well has also put in certain regulations to try and forestall immediate decline of the prices of shares in the Market.

On LearnAfrica, our price now has currently dropped to about N1.9, it used to be the one of lowest we ever had in history; that does not tell good, however, is also a reflection of the divestment of Pearson. Like I said earlier, uncertainties have trailed this by a lot of shareholders. When you now have a shareholder who has 1.0 million units if shares and suddenly it becomes 2.0 million, it’s an opportunity to cash in some of it. We want to stabilise probably after the Third Quarter; we shall look at what the Market shares are. We are currently permitted about 15% buyback right now; if we are allowed to, we may look at that if necessary, but we do not want to really take this action; because we believe by the performance of the Company itself, the value will pick on its own.

What are you putting in place to make sure you restore investors’ confidence in your shares?

Like I said earlier, this is our first full year since the divestment and no amount of talking to the investors will move them; unless they see the performance of the Company. The season period of our business has just commenced this August and by November when the season is over, then investors will have a good look at what has occurred. We can do a lot of talking, come for “Facts behind the Figures”; but they will say let’s wait and see.

How do you cut down piracy?

Piracy is a worldwide problem and a can be cut to its least minimum. The Nigerian Copyright Commission (NCC) has been helpful in collaborating with the Nigerian Publishers Association (NPA) in trying to check this tide. Very recently, about seven Containers were seized at the Port with the corporation of the NCC. This contained lots of pirated materials; intelligence still tells us that there are still quite a number on the shores coming in from China and we will be investigating the roots of these shipments.

There have been accusations that some of the Publishers are getting involved in this business. For us as Learn Africa Plc, obviously a couple of individuals have seen the gap that Pearson has divested, and we have rested the name Longman as a trading name and so some people want to cash in on that, pirate some books and bring them in as Longman. Quite a lot of the books that were seized still carry the name of Longman. It’s an ongoing problem, like I said give kudos to NCC; they are doing very well for us. We also have the corporation of the Anti-Counterfeit Coalition currently led by T-Mac Omatshola. They too are helping to fight piracy in their own way.

Future outlook for Learn Africa Plc

Just like what I said at our unveiling, LearnAfrica shall be a global brand.

End