Assessing Kingsgate Consolidated Limited’s (ASX:KCN) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess KCN’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Kingsgate Consolidated

How Well Did KCN Perform?

I 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 blend allows me to assess many different companies on a more comparable basis, using the latest information. For Kingsgate Consolidated, its most recent trailing-twelve-month earnings is -AU$32.26M, which compared to last year’s level, has become less negative. Since these values may be somewhat short-term, I’ve determined an annualized five-year figure for KCN’s net income, which stands at -AU$103.26M. This suggests that, although net income is negative, it has become less negative over the years.

We can further analyze Kingsgate Consolidated’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Kingsgate Consolidated has seen an annual decline in revenue of -9.66%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the Australian metals and mining industry has been growing its average earnings by double-digit 13.86% in the prior year, and 13.19% over the past five years. This means even though Kingsgate Consolidated is currently loss-making, it may have benefited from industry tailwinds, moving earnings in the 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 difficult to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Kingsgate Consolidated may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Kingsgate Consolidated to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.