Market Sentiment Around Loss-Making British Land Company Plc (LON:BLND)

By
Simply Wall St
Published
August 25, 2021
LSE:BLND
Source: Shutterstock

We feel now is a pretty good time to analyse British Land Company Plc's (LON:BLND) business as it appears the company may be on the cusp of a considerable accomplishment. Our portfolio of high quality UK commercial property is focused on London Offices and Retail around the UK. On 31 March 2021, the UK£4.8b market-cap company posted a loss of UK£1.0b for its most recent financial year. Many investors are wondering about the rate at which British Land 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.

Check out our latest analysis for British Land

Consensus from 8 of the British REITs analysts is that British Land is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of UK£394m in 2023. 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 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 100% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
LSE:BLND Earnings Per Share Growth August 26th 2021

Given this is a high-level overview, we won’t go into details of British Land's upcoming projects, though, 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 would like to bring into light with British Land is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in British Land's case is 42%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of British Land to cover in one brief article, but the key fundamentals for the company can all be found in one place – British Land's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

  1. Valuation: What is British Land 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 British Land 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 British Land’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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