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Benchmark Holdings plc's (LON:BMK) Shift From Loss To Profit

We feel now is a pretty good time to analyse Benchmark Holdings plc's (LON:BMK) business as it appears the company may be on the cusp of a considerable accomplishment. Benchmark Holdings plc, together with its subsidiaries, engages in the provision of technical services, products, and specialist knowledge that supports the development of food and farming industries. The UK£259m market-cap company posted a loss in its most recent financial year of UK£32m and a latest trailing-twelve-month loss of UK£28m shrinking the gap between loss and breakeven. The most pressing concern for investors is Benchmark Holdings' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Benchmark Holdings

Consensus from 6 of the British Food analysts is that Benchmark Holdings is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of UK£14m in 2025. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 94%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Benchmark Holdings' growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 26% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Benchmark Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Benchmark Holdings, take a look at Benchmark Holdings' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

  1. Valuation: What is Benchmark Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Benchmark Holdings is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Benchmark Holdings’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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