Examining Brook Crompton Holdings Ltd’s (SGX:AWC) 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 AWC’s latest performance announced on 30 September 2017 and compare these figures to its longer term trend and industry movements. View our latest analysis for Brook Crompton Holdings
How AWC fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to analyze different companies on a more comparable basis, using new information. “For Brook Crompton Holdings, its “, latest twelve-month earnings is SGD4.6M, which, relative to the previous year’s figure, has moved up by a significant 66.32%. Given that these figures are fairly short-term, I’ve calculated an annualized five-year figure for AWC’s net income, which stands at SGD1.9M. This shows that, generally, Brook Crompton Holdings has been able to gradually improve its earnings over the last few years as well.
How has it been able to do this? Let’s take a look at if it is only attributable to an industry uplift, or if Brook Crompton Holdings has seen some company-specific growth. Even though both top-line and bottom-line growth rates in the past couple of years, were, on average, negative, earnings were more so. While this has led to a margin contraction, it has cushioned Brook Crompton Holdings’s earnings contraction. Scanning growth from a sector-level, the SG trade distributors industry has been growing, albeit, at a unexciting single-digit rate of 8.95% over the previous twelve months, . This is a change from a volatile drop of -4.31% in the past couple of years. This means in the recent industry expansion, Brook Crompton Holdings is capable of leveraging this to its advantage.
What does this mean?
Though Brook Crompton Holdings’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Brook Crompton Holdings to get a better picture of the stock by looking at:
1. Financial Health: Is AWC’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.