Understanding Regency Mines Plc’s (AIM:RGM) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Regency Mines is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. See our latest analysis for Regency Mines
Could RGM beat the long-term trend and outperform its industry?
For the most up-to-date info, I use 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 allows me to assess various companies on a similar basis, using the latest information. For Regency Mines, its latest twelve-month earnings is -£0.5M, which, relative to the prior year’s figure, has become less negative. Given that these figures are fairly nearsighted, I have determined an annualized five-year figure for RGM’s net income, which stands at -£2.3M. This shows that, even though net income is negative, it has become less negative over the years.
Additionally, we can evaluate Regency Mines’s loss by researching 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 the past couple of years has been negative at -20.32%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Looking at growth from a sector-level, the UK metals and mining industry has been growing its average earnings by double-digit 36.65% in the prior year, . This is a turnaround from a volatile drop of -7.59% in the previous few years. This shows that, though Regency Mines is currently loss-making, it may have only just gained from the recent industry expansion, moving earnings towards to right direction.
What does this mean?
Regency Mines’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 hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Regency Mines may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Regency Mines to get a better picture of the stock by looking at:
1. Financial Health: Is RGM’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.