We feel now is a pretty good time to analyse British Land Company Plc's (LON:BLND) business as it appears the company may be on the cusp of a considerable accomplishment. Our portfolio of high quality UK commercial property is focused on London Offices and Retail around the UK. On 31 March 2021, the UK£4.7b market-cap company posted a loss of UK£1.0b for its most recent financial year. As path to profitability is the topic on British Land's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 8 of the British REITs analysts is that British Land is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of UK£275m in 2023. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 92%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for British Land given that this is a high-level summary, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. British Land currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in British Land's case is 42%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are too many aspects of British Land to cover in one brief article, but the key fundamentals for the company can all be found in one place – British Land's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
Valuation: What is British Land worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether British Land is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on British Land’s board and the CEO’s background.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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