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Distribution Finance Capital Holdings plc (LON:DFCH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Distribution Finance Capital Holdings plc, an investment holding company, operates as a specialist personal savings and commercial lending bank in the United Kingdom. The UK£72m market-cap company announced a latest loss of UK£3.7m on 31 December 2021 for its most recent financial year result. The most pressing concern for investors is Distribution Finance Capital Holdings' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Distribution Finance Capital Holdings
Consensus from 2 of the British Diversified Financial analysts is that Distribution Finance Capital Holdings is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of UK£4.2m in 2023. So, the company is predicted to breakeven just over a year from today. 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 75%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Distribution Finance Capital Holdings given that this is a high-level summary, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 0.06% 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 Distribution Finance Capital 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 Distribution Finance Capital Holdings, take a look at Distribution Finance Capital Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:
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Historical Track Record: What has Distribution Finance Capital Holdings' 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.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Distribution Finance Capital Holdings' board and the CEO’s background.
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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.
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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.