Kodal Minerals PLC's (LON:KOD) Shift From Loss To Profit

Kodal Minerals PLC (LON:KOD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kodal Minerals PLC, together with its subsidiaries, engages in the exploration and evaluation of mineral resources in the United Kingdom and West Africa. The company’s loss has recently broadened since it announced a UK£1.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£1.5m, moving it further away from breakeven. The most pressing concern for investors is Kodal Minerals' 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 Kodal Minerals

According to some industry analysts covering Kodal Minerals, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of UK£8.0m in 2026. 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 65% is expected, 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 Kodal Minerals given that this is a high-level summary, but, keep in mind that by and large 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.

One thing we’d like to point out is that Kodal Minerals has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Kodal Minerals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Kodal Minerals, take a look at Kodal Minerals' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

1. Historical Track Record: What has Kodal Minerals' 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 Kodal Minerals' 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.