Measuring Fuller, Smith & Turner P.L.C.’s (LON:FSTA) track record of past performance is a valuable exercise for investors. It allows 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 FSTA’s recent performance announced on 29 September 2018 and compare these figures to its historical trend and industry movements.
Was FSTA’s recent earnings decline worse than the long-term trend and the industry?
FSTA’s trailing twelve-month earnings (from 29 September 2018) of UK£33m has declined by -4.9% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 4.9%, indicating the rate at which FSTA is growing has slowed down. Why could this be happening? Well, let’s look at what’s occurring with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Fuller Smith & Turner has fallen short of achieving a 20% return on equity (ROE), recording 9.3% instead. Furthermore, its return on assets (ROA) of 5.4% is below the GB Hospitality industry of 6.4%, indicating Fuller Smith & Turner’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Fuller Smith & Turner’s debt level, has declined over the past 3 years from 8.4% to 8.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 51% to 70% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. You should continue to research Fuller Smith & Turner to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FSTA’s future growth? Take a look at our free research report of analyst consensus for FSTA’s outlook.
- Financial Health: Are FSTA’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 29 September 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.