Centaur Media Plc's (LON:CAU) Has Found A Path To Profitability

Centaur Media Plc (LON:CAU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Centaur Media Plc provides business information and marketing solutions to professional and commercial markets in the United Kingdom, rest of Europe, North America, and internationally. The UK£47m market-cap company posted a loss in its most recent financial year of UK£8.0m and a latest trailing-twelve-month loss of UK£18m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Centaur Media's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Centaur Media

According to the 3 industry analysts covering Centaur Media, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£1.0m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 117% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Centaur Media given that this is a high-level summary, but, keep 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 Centaur Media has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Centaur Media 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 Centaur Media 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 Centaur Media’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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