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After reading F J Benjamin Holdings Ltd’s (SGX:F10) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether F J Benjamin Holdings’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. See our latest analysis for F J Benjamin Holdings
How F10 fared against its long-term earnings performance and its industry
I look at data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to assess various companies on a more comparable basis, using new information. For F J Benjamin Holdings, its latest trailing-twelve-month earnings is -S$6.57M, which compared to the previous year’s figure, has become less negative. Since these values are somewhat nearsighted, I’ve created an annualized five-year figure for F J Benjamin Holdings’s earnings, which stands at -S$7.70M. This means though net income is negative, it has become less negative over the years.
We can further examine F J Benjamin Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years F J Benjamin Holdings has seen an annual decline in revenue of -10.62%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the SG specialty retail industry has been growing its average earnings by double-digit 38.54% over the previous twelve months, . This is a change from a volatile drop of -7.96% in the previous couple of years. This suggests that, though F J Benjamin Holdings is currently running a loss, it may have only just benefited from the recent industry expansion, moving earnings towards to right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will happen in the future and when. The most valuable step is to assess company-specific issues F J Benjamin Holdings may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research F J Benjamin Holdings to get a better picture of the stock by looking at: