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Analyzing Henry Boot PLC's (LON:BOOT) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess BOOT's recent performance announced on 31 December 2018 and compare these figures to its long-term trend and industry movements.
View our latest analysis for Henry Boot
Despite a decline, did BOOT underperform the long-term trend and the industry?
BOOT's trailing twelve-month earnings (from 31 December 2018) of UK£37m has declined by -11% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 22%, indicating the rate at which BOOT is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Henry Boot has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. Furthermore, its return on assets (ROA) of 8.7% is below the GB Consumer Durables industry of 10%, indicating Henry Boot's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Henry Boot’s debt level, has increased over the past 3 years from 13% to 15%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 27% to 9.7% over the past 5 years.
What does this mean?
Henry Boot's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Henry Boot to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for BOOT’s future growth? Take a look at our free research report of analyst consensus for BOOT’s outlook.
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Financial Health: Are BOOT’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.
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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.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.