When Can We Expect A Profit From Land Securities Group plc (LON:LAND)?

By
Simply Wall St
Published
April 19, 2021
LSE:LAND

We feel now is a pretty good time to analyse Land Securities Group plc's (LON:LAND) business as it appears the company may be on the cusp of a considerable accomplishment. At Landsec, we strive to connect communities, realise potential and deliver sustainable places. With the latest financial year loss of UK£832m and a trailing-twelve-month loss of UK£1.5b, the UK£5.3b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Land Securities Group'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.

View our latest analysis for Land Securities Group

Consensus from 8 of the British REITs analysts is that Land Securities Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of UK£504m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. 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 87% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
LSE:LAND Earnings Per Share Growth April 19th 2021

Given this is a high-level overview, we won’t go into details of Land Securities Group's upcoming projects, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Land Securities Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Land Securities Group's case is 49%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Land Securities Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Land Securities Group's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

  1. Valuation: What is Land Securities Group 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 Land Securities Group 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 Land Securities Group’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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