Yahoo Finance Schrole Group Ltd (ASX:SCL): When Will It Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Schrole Group Ltd's (ASX:SCL) future prospects. Schrole Group Ltd engages in the provision of software solutions and training services primarily to the education sector in Australia and internationally. The AU$12m market-cap company announced a latest loss of AU$1.8m on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Schrole Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Schrole Group
According to some industry analysts covering Schrole Group, breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$400k in 2024. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 125% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Schrole Group's growth isn’t the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. Schrole Group currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on Schrole Group, so if you are interested in understanding the company at a deeper level, take a look at Schrole Group's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:
Valuation: What is Schrole Group 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 Schrole Group is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Schrole Group’s 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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