Examining United Carpets Group PLC’s (LON:UCG) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess UCG’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements.
Did UCG’s recent performance beat its trend and industry?
UCG’s trailing twelve-month earnings (from 31 March 2018) of UK£1.3m has declined by -0.2% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 15%, indicating the rate at which UCG is growing has slowed down. Why could this be happening? Let’s examine what’s transpiring with margins and if the entire industry is feeling the heat.
In terms of returns from investment, United Carpets Group has invested its equity funds well leading to a 24% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the GB Specialty Retail industry of 4.6%, indicating United Carpets Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for United Carpets Group’s debt level, has increased over the past 3 years from 26% to 26%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 1.1% to 0.06% over the past 5 years.
What does this mean?
Though United Carpets Group’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I recommend you continue to research United Carpets Group to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for UCG’s future growth? Take a look at our free research report of analyst consensus for UCG’s outlook.
- Financial Health: Are UCG’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 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.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.