When Billington Holdings Plc (AIM:BILN) released its most recent earnings update (30 June 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Billington Holdings performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see BILN has performed. Check out our latest analysis for Billington Holdings
Could BILN beat the long-term trend and outperform its industry?
I prefer to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to analyze different stocks on a more comparable basis, using the most relevant data points. For Billington Holdings, its most recent earnings (trailing twelve month) is UK£3.41M, which, relative to the prior year’s level, has jumped up by 37.39%. Given that these figures are fairly short-term thinking, I have created an annualized five-year figure for BILN’s earnings, which stands at UK£901.98K This suggests that, generally, Billington Holdings has been able to increasingly raise its net income over the past couple of years as well.
What’s the driver of this growth? Well, let’s take a look at if it is only attributable to an industry uplift, or if Billington Holdings has experienced some company-specific growth. Over the past couple of years, Billington Holdings increased its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Inspecting growth from a sector-level, the UK construction industry has been growing its average earnings by double-digit 21.24% in the past twelve months, and a more muted 5.09% over the previous five years. This shows that any tailwind the industry is enjoying, Billington Holdings is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Billington Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Billington Holdings to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for BILN’s future growth? Take a look at our free research report of analyst consensus for BILN’s outlook.
- 2. Financial Health: Is BILN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 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.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2017. This may not be consistent with full year annual report figures.
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.