Yahoo Finance NCC Group plc's (LON:NCC) Earnings Dropped -17%, How Did It Fare Against The Industry?
When NCC Group plc (LSE:NCC) released its most recent earnings update (30 November 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were NCC Group's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not NCC actually performed well. Below is a quick commentary on how I see NCC has performed.
View our latest analysis for NCC Group
Was NCC weak performance lately part of a long-term decline?
NCC's trailing twelve-month earnings (from 30 November 2019) of UK£13m has declined by -17% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -7.5%, indicating the rate at which NCC is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, NCC Group has fallen short of achieving a 20% return on equity (ROE), recording 6.5% instead. Furthermore, its return on assets (ROA) of 4.2% is below the GB IT industry of 8.2%, indicating NCC Group's are utilized less efficiently. However, its return on capital (ROC), which also accounts for NCC Group’s debt level, has increased over the past 3 years from 7.7% to 8.3%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 45% to 27% over the past 5 years.
What does this mean?
NCC Group's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. You should continue to research NCC Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for NCC’s future growth? Take a look at our free research report of analyst consensus for NCC’s outlook.
Financial Health: Are NCC’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 30 November 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.
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