Yahoo Finance MJ Hudson Group plc (LON:MJH): When Will It Breakeven?
We feel now is a pretty good time to analyse MJ Hudson Group plc's (LON:MJH) business as it appears the company may be on the cusp of a considerable accomplishment. MJ Hudson Group plc, together with its subsidiaries, operates as a financial services support provider for the fund managers and asset owners in the United Kingdom, rest of Europe, and North America. The UK£49m market-cap company posted a loss in its most recent financial year of UK£5.4m and a latest trailing-twelve-month loss of UK£5.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is MJ Hudson Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for MJ Hudson Group
Consensus from 3 of the British Capital Markets analysts is that MJ Hudson Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of UK£4.2m in 2024. The company is therefore projected to breakeven around 2 years from today. 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 85%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving MJ Hudson Group's growth isn’t the focus of this broad overview, but, 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.
One thing we would like to bring into light with MJ Hudson Group is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in MJ Hudson Group's case is 70%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of MJ Hudson Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – MJ Hudson Group's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:
Historical Track Record: What has MJ Hudson Group's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MJ Hudson Group'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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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