We feel now is a pretty good time to analyse Kibo Energy PLC's (LON:KIBO) business as it appears the company may be on the cusp of a considerable accomplishment. Kibo Energy PLC, together with its subsidiaries, explores for and develops energy projects in Sub Saharan Africa and the United Kingdom. The UK£3.8m market-cap company posted a loss in its most recent financial year of UK£22m and a latest trailing-twelve-month loss of UK£23m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Kibo Energy's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Kibo Energy

Kibo Energy is bordering on breakeven, according to some British Renewable Energy analysts. They expect the company to post a final loss in 2022, before turning a profit of UK£1.2m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 170% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Kibo Energy given that this is a high-level summary, though, bear in mind that by and large 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. The company has managed its capital prudently, with debt making up 17% 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.

Next Steps:

There are too many aspects of Kibo Energy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Kibo Energy's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Historical Track Record: What has Kibo Energy's 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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kibo Energy's board and the CEO’s background.

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.

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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