Ten Lifestyle Group Plc’s (LON:TENG) Shift From Loss To Profit - Simply Wall St

Ten Lifestyle Group Plc’s (LON:TENG) Shift From Loss To Profit - Simply Wall St

Ten Lifestyle Group Plc’s (LON:TENG): Ten Lifestyle Group plc provides concierge services to private banks, retail banks, premium payment card providers, and high-net-worth individuals worldwide. The company’s loss has recently broadened since it announced a -UK£8.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of -UK£8.3m, moving it further away from breakeven. The most pressing concern for investors is TENG’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for TENG, its year of breakeven and its implied growth rate.

Check out our latest analysis for Ten Lifestyle Group

According to the 2 industry analysts covering TENG, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of UK£7.0m in 2021. TENG is therefore projected to breakeven around 2 years from today. What rate will TENG have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 85%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

AIM:TENG Past and Future Earnings, November 22nd 2019

Given this is a high-level overview, I won’t go into details of TENG’s upcoming projects, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. TENG has managed its capital prudently, with debt making up -0.1% of equity. This means that TENG has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on TENG, so if you are interested in understanding the company at a deeper level, take a look at TENG’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should look at:

1. Valuation: What is TENG 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 TENG 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 Ten Lifestyle Group’s board and the CEO’s back ground.
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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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2019-11-22 13:33:07Z
https://simplywall.st/stocks/gb/retail/aim-teng/ten-lifestyle-group-shares/news/ten-lifestyle-group-plcs-lonteng-shift-from-loss-to-profit/

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