Greatland Gold plc (LON:GGP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Greatland Gold plc engages in the exploration and development of natural resources in the United Kingdom and Australia. With the latest financial year loss of UK£5.5m and a trailing-twelve-month loss of UK£6.4m, the UK£373m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Greatland Gold 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.
Greatland Gold is bordering on breakeven, according to the 2 British Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£97m in 2025. The company is therefore projected to breakeven around 3 years from today. 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 83% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Greatland Gold given that this is a high-level summary, though, bear in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one issue worth mentioning. Greatland Gold currently has a debt-to-equity ratio of 165%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Greatland Gold, so if you are interested in understanding the company at a deeper level, take a look at Greatland Gold's company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is Greatland Gold worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Greatland Gold is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Greatland Gold’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.
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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.
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