Measuring RBR Group Limited’s (ASX:RBR) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess RBR’s recent performance announced on 30 June 2017 and weigh these figures against its long-term trend and industry movements. See our latest analysis for RBR Group
Were RBR’s earnings stronger than its past performances and the industry?
I look at data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend allows me to assess many different companies on a more comparable basis, using new information. RBR Group’s most recent twelve-month earnings -A$1.1M, which, in comparison to the prior year’s level, has become less negative. Given that these figures may be relatively short-term, I’ve estimated an annualized five-year figure for RBR Group’s earnings, which stands at -A$1.6M. This suggests that, although net income is negative, it has become less negative over the years.
Additionally, we can assess RBR Group’s loss by looking at what’s going on in the industry on top of within the company. Firstly, I want to quickly look into the line items. Revenue growth over the last few years has risen by 68.77%, signalling that RBR Group is in a high-growth phase with expenses shooting ahead of elevated top-line growth rates. Scanning growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 7.36% in the previous year, and 8.50% over the past five years. This means even though RBR Group is currently running a loss, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
While past data is useful, it 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 assess company-specific issues RBR Group may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research RBR Group to get a more holistic view of the stock by looking at:
1. Financial Health: Is RBR’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.