Examining Johnson Service Group PLC’s (LON:JSG) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess JSG’s latest performance announced on 31 December 2018 and weigh these figures against its longer term trend and industry movements.
Commentary On JSG’s Past Performance
JSG’s trailing twelve-month earnings (from 31 December 2018) of UK£27m has increased by 5.5% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 26%, indicating the rate at which JSG is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Johnson Service Group has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 7.8% exceeds the GB Commercial Services industry of 5.3%, indicating Johnson Service Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Johnson Service Group’s debt level, has increased over the past 3 years from 11% to 12%.
What does this mean?
Johnson Service Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Johnson Service Group has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Johnson Service Group to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for JSG’s future growth? Take a look at our free research report of analyst consensus for JSG’s outlook.
- Financial Health: Are JSG’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 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.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
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