Maintel Holdings Plc (LON:MAI): Has Recent Earnings Growth Beaten Long-Term Trend?

Examining Maintel Holdings Plc’s (LON:MAI) 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 MAI’s latest performance announced on 31 December 2018 and weigh these figures against its longer term trend and industry movements.

View our latest analysis for Maintel Holdings

Did MAI beat its long-term earnings growth trend and its industry?

MAI’s trailing twelve-month earnings (from 31 December 2018) of UK£2.0m has jumped 33% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -8.9%, indicating the rate at which MAI is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is only owing to an industry uplift, or if Maintel Holdings has experienced some company-specific growth.

AIM:MAI Income Statement, August 26th 2019
AIM:MAI Income Statement, August 26th 2019

In terms of returns from investment, Maintel Holdings has fallen short of achieving a 20% return on equity (ROE), recording 9.3% instead. Furthermore, its return on assets (ROA) of 2.9% is below the GB Commercial Services industry of 5.0%, indicating Maintel Holdings’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Maintel Holdings’s debt level, has declined over the past 3 years from 44% to 10%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 70% to 115% over the past 5 years.

What does this mean?

Maintel Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be factors that are influencing the industry as a whole, hence the high industry growth rate over the same time period. I recommend you continue to research Maintel Holdings to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for MAI’s future growth? Take a look at our free research report of analyst consensus for MAI’s outlook.
  2. Financial Health: Are MAI’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.
  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.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.