Velocity Capital Partner Berhad's (KLSE:VELOCITY) Profits Appear To Have Quality Issues

Velocity Capital Partner Berhad's (KLSE:VELOCITY) robust recent earnings didn't do much to move the stock. We believe that shareholders have noticed some concerning factors beyond the statutory profit numbers.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand Velocity Capital Partner Berhad's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from RM9.5m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. We can see that Velocity Capital Partner Berhad's positive unusual items were quite significant relative to its profit in the year to September 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Velocity Capital Partner Berhad.

Our Take On Velocity Capital Partner Berhad's Profit Performance

As we discussed above, we think the significant positive unusual item makes Velocity Capital Partner Berhad's earnings a poor guide to its underlying profitability. For this reason, we think that Velocity Capital Partner Berhad's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. The silver lining is that its EPS growth over the last year has been really wonderful, even if it's not a perfect measure. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you'd like to know more about Velocity Capital Partner Berhad as a business, it's important to be aware of any risks it's facing. For instance, we've identified 3 warning signs for Velocity Capital Partner Berhad (1 can't be ignored) you should be familiar with.

Today we've zoomed in on a single data point to better understand the nature of Velocity Capital Partner Berhad's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.