Examining IRC Limited’s (SEHK:1029) 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 1029’s latest performance announced on 30 June 2017 and compare these figures to its longer term trend and industry movements. See our latest analysis for IRC
Did 1029’s recent EPS Growth beat the long-term trend and the industry?
I prefer to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to analyze different stocks on a similar basis, using the latest information. IRC’s most recent earnings -$18.0M, which compared to last year’s figure, has become less negative. Since these figures are relatively short-term thinking, I have determined an annualized five-year value for IRC’s net income, which stands at -$146.9M. This means that, while net income is negative, it has become less negative over the years.
We can further evaluate IRC’s loss by looking at what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over last few years has been negative at -8.30%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Inspecting growth from a sector-level, the HK metals and mining industry has been multiplying growth, more than doubling average earnings in the previous twelve months, . This is a a solid change from a volatile drop of -15.80% in the last few years. This shows that whatever uplift the industry is enjoying, IRC has not been able to reap as much as its average peer.
What does this mean?
IRC’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most useful step is to examine company-specific issues IRC may be facing and whether management guidance has consistently been met in the past. You should continue to research IRC to get a better picture of the stock by looking at:
1. Financial Health: Is 1029’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.