Yahoo Finance Reabold Resources Plc (LON:RBD) Is Expected To Breakeven In The Near Future
With the business potentially at an important milestone, we thought we'd take a closer look at Reabold Resources Plc's (LON:RBD) future prospects. Reabold Resources Plc invests in upstream oil and gas projects. On 31 December 2021, the UK£31m market-cap company posted a loss of UK£2.7m for its most recent financial year. Many investors are wondering about the rate at which Reabold Resources will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Reabold Resources
Consensus from 3 of the British Oil and Gas analysts is that Reabold Resources is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of UK£300k in 2023. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 94% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Reabold Resources given that this is a high-level summary, however, bear in mind that generally an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. Reabold Resources currently has no debt on its balance sheet, which is rare for a loss-making oil and gas company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Reabold Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Reabold Resources' company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:
Historical Track Record: What has Reabold Resources' 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 Reabold Resources' 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.
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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.
