When Will Centaur Media Plc (LON:CAU) Become Profitable?

By
Simply Wall St
Published
May 12, 2021
LSE:CAU
Source: Shutterstock

With the business potentially at an important milestone, we thought we'd take a closer look at Centaur Media Plc's (LON:CAU) future prospects. Centaur Media Plc provides business information, training, and specialist consultancy to professional and commercial markets in the United Kingdom, rest of Europe, North America, and internationally. The UK£62m market-cap company announced a latest loss of UK£1.7m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Centaur Media'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.

View our latest analysis for Centaur Media

According to the 3 industry analysts covering Centaur Media, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of UK£2.4m in 2022. Therefore, the company is expected to breakeven just over a year 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 97% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
LSE:CAU Earnings Per Share Growth May 13th 2021

We're not going to go through company-specific developments for Centaur Media given that this is a high-level summary, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Centaur Media has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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 Centaur Media 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 Centaur Media, take a look at Centaur Media's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

  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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