Plutus PowerGen plc’s (LON:PPG): Plutus PowerGen plc, through its subsidiary, Plutus Energy Limited, develops and operates flexible standby electricity generation sites in the United Kingdom. The company’s loss has recently broadened since it announced a -UK£202k loss in the full financial year, compared to the latest trailing-twelve-month loss of -UK£597k, moving it further away from breakeven. Many investors are wondering the rate at which PPG will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for PPG, its year of breakeven and its implied growth rate.
Check out our latest analysis for Plutus PowerGen
Expectation from Renewable Energy analysts is PPG is on the verge of breakeven. They anticipate the company to incur a final loss in 2018, before generating positive profits of UK£400k in 2019. PPG is therefore projected to breakeven around a few months from now. What rate will PPG have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 78%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving PPG’s growth isn’t the focus of this broad overview, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. PPG has managed its capital prudently, with debt making up 21% of equity. This means that PPG 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:
This article is not intended to be a comprehensive analysis on PPG, so if you are interested in understanding the company at a deeper level, take a look at PPG’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:
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Historical Track Record: What has PPG’s 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 Plutus PowerGen’s board and the CEO’s back ground.
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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.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.