When Will Mr Bricolage SA (EPA:MRB) Breakeven?

Mr Bricolage SA's (ENXTPA:MRB): Mr. Bricolage SA engages in retail distribution of DIY, indoors and outdoors home improvement, gardening, and decoration products and services in France and internationally. The €147.41M market-cap posted a loss in its most recent financial year of -€65.00M and a latest trailing-twelve-month loss of -€61.64M shrinking the gap between loss and breakeven. As path to profitability is the topic on MRB’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for MRB’s growth and when analysts expect the company to become profitable.

MRB is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2017, before turning a profit of €10.10M in 2018. Therefore, MRB is expected to breakeven roughly a couple of months from now! What rate will MRB have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 104.54%, which signals high confidence from analysts. If this rate turns out to be too aggressive, MRB may become profitable much later than analysts predict.

Underlying developments driving MRB’s growth isn’t the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. MRB currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in MRB’s case is 48.74%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of MRB to cover in one brief article, but the key fundamentals for the company can all be found in one place – MRB’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should look at:

1. Valuation: What is MRB 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 MRB is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Mr. Bricolage’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.