Loss-Making Black Cat Syndicate Limited (ASX:BC8) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse Black Cat Syndicate Limited's (ASX:BC8) business as it appears the company may be on the cusp of a considerable accomplishment. Black Cat Syndicate Limited engages in the exploration and evaluation of gold properties in Australia. The AU$136m market-cap company’s loss lessened since it announced a AU$4.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$4.7m, as it approaches breakeven. The most pressing concern for investors is Black Cat Syndicate's path to profitability – when will it 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 Black Cat Syndicate

According to some industry analysts covering Black Cat Syndicate, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$3.0m in 2025. The company is therefore projected 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 70% is expected, which signals high confidence from analysts. 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 Black Cat Syndicate given that this is a high-level summary, however, take into account that by and large a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Black Cat Syndicate currently has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Black Cat Syndicate, so if you are interested in understanding the company at a deeper level, take a look at Black Cat Syndicate's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Historical Track Record: What has Black Cat Syndicate'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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Black Cat Syndicate's 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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com