With the business potentially at an important milestone, we thought we’d take a closer look at Distribution Finance Capital Holdings plc’s (LON:DFCH) future prospects. Distribution Finance Capital Holdings plc, an investment holding company, operates as a specialist personal savings and commercial lending bank in the United Kingdom. The UK£101m market-cap company’s loss lessened since it announced a UK£14m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£8.7m, as it approaches breakeven. Many investors are wondering about the rate at which Distribution Finance Capital Holdings will turn a profit, with the big question being “when will the company breakeven?” We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 3 of the British Diversified Financial analysts is that Distribution Finance Capital Holdings is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of UK£3.5m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 85% 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.
Given this is a high-level overview, we won’t go into details of Distribution Finance Capital Holdings’ upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 0.06% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of Distribution Finance Capital Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Distribution Finance Capital Holdings’ company page on Simply Wall St. We’ve also compiled a list of essential factors you should further research:
Historical Track Record: What has Distribution Finance Capital Holdings’ performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Distribution Finance Capital Holdings’ board and the CEO’s background.
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.
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.
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