Greatland Gold plc (LON:GGP) About To Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Greatland Gold plc's (LON:GGP) future prospects. Greatland Gold plc, together with its subsidiaries, explores for and develops precious and base metals in Australia. On 30 June 2024, the UK£785m market-cap company posted a loss of UK£15m for its most recent financial year. The most pressing concern for investors is Greatland Gold's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Greatland Gold

According to the 3 industry analysts covering Greatland Gold, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£91m in 2025. Therefore, the company is expected to breakeven roughly 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 32%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Greatland Gold's growth isn’t the focus of this broad overview, however, keep in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. Greatland Gold currently has a debt-to-equity ratio of 101%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Greatland Gold to cover in one brief article, but the key fundamentals for the company can all be found in one place – Greatland Gold's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Greatland Gold worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Greatland Gold is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Greatland Gold’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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.