Market Sentiment Around Loss-Making Plutus PowerGen plc (LON:PPG)
Plutus PowerGen plc’s (AIM:PPG): Plutus PowerGen plc, through its subsidiary, Plutus Energy Limited, develops and operates flexible standby electricity generation sites in the United Kingdom. With the latest financial year loss of -UK£201.50K and a trailing-twelve month of -UK£597.02K, the UK£12.13M market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which PPG will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for PPG.
View our latest analysis for Plutus PowerGen
Expectation from analysts is PPG is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of UK£800.00K in 2019. So, PPG is predicted to breakeven approximately a couple of months from now! What rate will PPG have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 125.38%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into detail the detail of PPG’s upcoming projects, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. PPG has managed its capital prudently, with debt making up 21.21% of equity. This means that PPG 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 too many aspects of PPG to cover in one brief article, but the key fundamentals for the company can all be found in one place – PPG’s company page on Simply Wall St. I’ve also put together a list of essential factors you should look at:
Historical Track Record: What has PPG’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Plutus PowerGen’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
