Measuring Photo-Me International plc’s (LON:PHTM) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess PHTM’s recent performance announced on 30 April 2018 and weigh these figures against its long-term trend and industry movements.
How Did PHTM’s Recent Performance Stack Up Against Its Past?
PHTM’s trailing twelve-month earnings (from 30 April 2018) of UK£40m has jumped 15% 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 15%, indicating the rate at which PHTM is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Photo-Me International has invested its equity funds well leading to a 28% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 17% exceeds the GB Leisure industry of 7.0%, indicating Photo-Me International has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Photo-Me International’s debt level, has declined over the past 3 years from 34% to 26%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.8% to 23% over the past 5 years.
What does this mean?
Though Photo-Me International’s past data is helpful, it is only one aspect of my investment thesis. While Photo-Me International 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 Photo-Me International to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PHTM’s future growth? Take a look at our free research report of analyst consensus for PHTM’s outlook.
- Financial Health: Are PHTM’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 30 April 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.