Loss-Making MJ Hudson Group plc (LON:MJH) Set To Breakeven

With the business potentially at an important milestone, we thought we'd take a closer look at MJ Hudson Group plc's (LON:MJH) future prospects. MJ Hudson Group plc operates as a financial services support provider for the fund managers and asset owners in the United Kingdom, the Channel Islands, Switzerland, Netherlands, Luxembourg, rest of Europe, North America, the Cayman Islands, and internationally. On 30 June 2020, the UK£79m market-cap company posted a loss of UK£7.2m for its most recent financial year. Many investors are wondering about the rate at which MJ Hudson Group will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for MJ Hudson Group

MJ Hudson Group is bordering on breakeven, according to the 3 British Capital Markets analysts. They expect the company to post a final loss in 2020, before turning a profit of UK£100k in 2021. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 136%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for MJ Hudson Group given that this is a high-level summary, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 8.4% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of MJ Hudson Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – MJ Hudson Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Historical Track Record: What has MJ Hudson Group's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MJ Hudson Group's board and the CEO’s background.
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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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. 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. Simply Wall St has no position in any stocks mentioned.
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