Examining Informa plc's (LSE:INF) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess INF's latest performance announced on 31 December 2019 and weigh these figures against its longer term trend and industry movements.
Commentary On INF's Past Performance
INF's trailing twelve-month earnings (from 31 December 2019) of UK£226m has increased by 8.5% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 30%, indicating the rate at which INF is growing has slowed down. What could be happening here? Well, let's examine what's transpiring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Informa has fallen short of achieving a 20% return on equity (ROE), recording 4.2% instead. Furthermore, its return on assets (ROA) of 3.1% is below the GB Media industry of 4.0%, indicating Informa's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Informa’s debt level, has declined over the past 3 years from 7.5% to 6.6%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Informa gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Informa to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for INF’s future growth? Take a look at our free research report of analyst consensus for INF’s outlook.
- Financial Health: Are INF’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.
- 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 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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