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Has Gateley (Holdings) Plc (LON:GTLY) Improved Earnings Growth In Recent Times?

When Gateley (Holdings) Plc's (AIM:GTLY) announced its latest earnings (31 October 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Gateley (Holdings)'s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not GTLY actually performed well. Below is a quick commentary on how I see GTLY has performed.

Check out our latest analysis for Gateley (Holdings)

How Did GTLY's Recent Performance Stack Up Against Its Past?

GTLY's trailing twelve-month earnings (from 31 October 2019) of UK£14m has increased by 9.0% compared to the previous year.

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Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -12%, indicating the rate at which GTLY is growing has accelerated. What's enabled this growth? Let's take a look at whether it is solely due to an industry uplift, or if Gateley (Holdings) has seen some company-specific growth.

AIM:GTLY Income Statement, February 23rd 2020
AIM:GTLY Income Statement, February 23rd 2020

In terms of returns from investment, Gateley (Holdings) has invested its equity funds well leading to a 44% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the GB Professional Services industry of 7.4%, indicating Gateley (Holdings) has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Gateley (Holdings)’s debt level, has declined over the past 3 years from 62% to 30%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 6.3% to 15% over the past 5 years.

What does this mean?

Gateley (Holdings)'s track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. There could be variables that are affecting the entire industry hence the high industry growth rate over the same period of time. I suggest you continue to research Gateley (Holdings) to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for GTLY’s future growth? Take a look at our free research report of analyst consensus for GTLY’s outlook.

  2. Financial Health: Are GTLY’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.

  3. 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 October 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 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.

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. Thank you for reading.