When Will Greatland Gold plc (LON:GGP) Turn A Profit?

We feel now is a pretty good time to analyse Greatland Gold plc's (LON:GGP) business as it appears the company may be on the cusp of a considerable accomplishment. Greatland Gold plc, together with its subsidiaries, engages in the exploration and development of precious and base metals in Australia. On 30 June 2023, the UK£570m market-cap company posted a loss of UK£21m for its most recent financial year. As path to profitability is the topic on Greatland Gold's investors mind, we've decided to gauge market sentiment. 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

Greatland Gold is bordering on breakeven, according to some British Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£1.0m in 2025. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 103% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Greatland Gold's upcoming projects, but, bear 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 79%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Greatland Gold, so if you are interested in understanding the company at a deeper level, take a look at Greatland Gold's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Historical Track Record: What has Greatland Gold'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 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.