Power Root Bhd’s Tasty Track Record Of Growth

Power Root Bhd (KLSE: 7237.KL) is a food and beverage (F&B) company listed in Malaysia’s stock market, Bursa Malaysia. The company manufactures and distributes energy drinks, and ready-to-drink and instant coffee and tea products. The brands that are in Power Root’s portfolio include Power Root, Alicafe, Ah Huat and more.

One of the things that I like to do when analysing a company is to study its track record. The past is no guarantee of the future. But historical information is the most reliable thing that we can use as our basis to forecast what lies ahead.

And this brings me to the main purpose of this article, which is to have a quick overview of Power Root’s historical business growth.

Six years of growth

The table below is a snapshot of Power Root’s important financial metrics from FY2012 (the financial year ended 29 February 2012) to FY2017 (the financial year ended 31 March 2017). On July 2014, Power Root changed the end of its financial year from 28 February to 31 March.

Source: Power Root annual reports

Here are a few points worth noting:

1. Firstly, the company’s revenue had grown by 84.0% from RM 217.0 million to RM 399.3 million during the period under study. This translates to an impressive CAGR (compound annual growth rate) of 13.0%.

2. Secondly, Power Root’s net profit and EPS both displayed even more impressive CAGRs than its revenue. From FY2012 to FY2017, Power Root’s net profit and EPS had increased by 23.8% and 21.8% per year, respectively. Its net profit had grown from RM 16.2 million to  RM 47.2 million, while its dividend per share had jumped from 4.5 sen to 11.5 sen.

3. Thirdly, Power Root’s dividend per share had climbed by 155.6% in total over the period above. This translates to a noteworthy CAGR of 20.6%.

A Foolish conclusion

When I put it all together, I think Power Root has a commendable track record of business growth. It has grown its revenue at a mid-teens annual rate, and its profit and dividends have increased at even better annual rates in the 20-percentage range.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.