When Will Greatland Gold plc (LON:GGP) Breakeven?

Greatland Gold plc (LON:GGP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Greatland Gold plc, together with its subsidiaries, engages in the exploration and development of precious and base metals in Australia. The UK£260m market-cap company’s loss lessened since it announced a UK£21m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£13m, as it approaches breakeven. Many investors are wondering about the rate at which Greatland Gold will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Greatland Gold

According to the 2 industry analysts covering Greatland Gold, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of UK£25m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 49% year-on-year, on average, which is extremely buoyant. 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 Greatland Gold given that this is a high-level summary, though, keep in mind that by and large a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Greatland Gold currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Greatland Gold's case is 82%. A higher level of debt requires more stringent capital management which increases the risk around 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 put together a list of relevant aspects 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.