Interested In South Port New Zealand Limited (NZSE:SPN)? Here's How It Performed Recently

Understanding how South Port New Zealand Limited (NZSE:SPN) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how South Port New Zealand is doing by comparing its latest earnings with its long-term trend as well as the performance of its infrastructure industry peers.

View our latest analysis for South Port New Zealand

How Did SPN's Recent Performance Stack Up Against Its Past?

SPN's trailing twelve-month earnings (from 31 December 2017) of NZ$9.24m has jumped 19.16% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.56%, indicating the rate at which SPN is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is solely a result of an industry uplift, or if South Port New Zealand has experienced some company-specific growth.

In the last few years, South Port New Zealand increased its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Inspecting growth from a sector-level, the NZ infrastructure industry has been growing its average earnings by double-digit 21.47% over the previous twelve months, and 14.11% over the last five years. Since the Infrastructure sector in NZ is relatively small, I’ve included similar companies in the wider region in order to get a better idea of the growth, which is a median of profitable companies of companies such as Marsden Maritime Holdings, Port of Tauranga and Auckland International Airport. This shows that any tailwind the industry is deriving benefit from, South Port New Zealand has not been able to leverage it as much as its industry peers.

In terms of returns from investment, South Port New Zealand has invested its equity funds well leading to a 24.80% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 18.05% exceeds the NZ Infrastructure industry of 6.58%, indicating South Port New Zealand has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for South Port New Zealand’s debt level, has increased over the past 3 years from 23.25% to 25.88%.

What does this mean?

Though South Port New Zealand's past data is helpful, it is only one aspect of my investment thesis. While South Port New Zealand has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research South Port New Zealand to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for SPN’s future growth? Take a look at our free research report of analyst consensus for SPN’s outlook.
2. Financial Health: Is SPN’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.
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.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.