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Reabold Resources Plc (LON:RBD) Is About To Turn The Corner

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Simply Wall St
·3-min read
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Reabold Resources Plc (LON:RBD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Reabold Resources Plc invests in upstream oil and gas projects. On 31 December 2019, the UK£52m market-cap company posted a loss of UK£4.2m 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?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Reabold Resources

According to some industry analysts covering Reabold Resources, breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of UK£600k in 2020. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 100%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

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earnings-per-share-growth

Underlying developments driving Reabold Resources' growth isn’t the focus of this broad overview, however, take into account that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Reabold Resources has no debt on its balance sheet, which is rare for a loss-making oil and gas company, which usually has a high level of 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 key fundamentals of Reabold Resources which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Reabold Resources, take a look at Reabold Resources' company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:

  1. 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.

  2. 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.

  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.

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. 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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