Assessing Pioneer Credit Limited’s (ASX:PNC) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PNC’s recent performance announced on 30 June 2017 and evaluate these figures to its longer term trend and industry movements. View our latest analysis for Pioneer Credit
Did PNC beat its long-term earnings growth trend and its industry?
I look at the ‘latest twelve-month’ data, 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 examine different companies on a more comparable basis, using the latest information. For Pioneer Credit, its latest earnings (trailing twelve month) is A$10.8M, which, in comparison to the prior year’s level, has moved up by 13.79%. Given that these figures are fairly short-term thinking, I have calculated an annualized five-year value for PNC’s earnings, which stands at A$6.2M. This suggests that, generally, Pioneer Credit has been able to steadily improve its earnings over the last few years as well.
What’s enabled this growth? Let’s take a look at if it is only a result of industry tailwinds, or if Pioneer Credit has seen some company-specific growth. Over the last few years, Pioneer Credit expanded its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Looking at growth from a sector-level, the Australian diversified financial services industry has been enduring some headwinds in the previous year, leading to an average earnings drop of -3.35%. This is a major change, given that the industry has constantly been delivering a a solid growth of 14.46% in the past couple of years. This means whatever recent headwind the industry is experiencing, Pioneer Credit is relatively better-cushioned than its peers.
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 Pioneer Credit gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Pioneer Credit to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for PNC’s future growth? Take a look at our free research report of analyst consensus for PNC’s outlook.