Hotel Grand Central (SGX:H18) Will Be Looking To Turn Around Its Returns

Simply Wall St.06-21

What financial metrics can indicate to us that a company is maturing or even in decline? Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides ...

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Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides ...</p>\n\n<a href=\"https://finance.yahoo.com/news/hotel-grand-central-sgx-h18-223618316.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance_sg","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Hotel Grand Central (SGX:H18) Will Be Looking To Turn Around Its Returns</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHotel Grand Central (SGX:H18) Will Be Looking To Turn Around Its Returns\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-21 06:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/hotel-grand-central-sgx-h18-223618316.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What financial metrics can indicate to us that a company is maturing or even in decline? Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides ...</p>\n\n<a href=\"https://finance.yahoo.com/news/hotel-grand-central-sgx-h18-223618316.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"H18.SI","symbol_name":"大中酒店有限公司","start_time":0,"source_url":"https://finance.yahoo.com/news/hotel-grand-central-sgx-h18-223618316.html","article_id":"2445220083","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/Q7Xnl1gEohQnpcIOzqEAFQ--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/32b2264889e9375193adba765d83b8cf"],"rights":{"source":"yahoofinance_sg","url":"https://finance.yahoo.com/news/hotel-grand-central-sgx-h18-223618316.html","rn_cache_url":null,"customStyle":"","selectors":"article, body","filters":"","directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2445220083","pubTimestamp":1718922978,"sourceInfo":{"source_id":"yahoofinance_sg","name":"Yahoo Finance"},"weMediaInfo":null,"summary":"What financial metrics can indicate to us that a company is maturing or even in decline?Typically, we'll see the trend of both return on capital employed  declining and this usually coincides with a decreasing amount of capital employed. This combination can tell you that not only is the company investing less, it's earning less on what it does invest. So after glancing at the trends within Hotel Grand Central , we weren't too hopeful.Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income  a company earns on the capital invested in its business. The formula for this calculation on Hotel Grand Central is:. Return on Capital Employed = Earnings Before Interest and Tax  ÷ . Therefore, Hotel Grand Central has an ROCE of 1.6%. Ultimately, that's a low return and it under-performs the Hospitality industry average of 4.5%.Check out our latest analysis for Hotel Grand Central","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"H18.SI":"大中酒店有限公司","BK6059":"酒店、度假村与豪华游轮","BK6505":"周期性消费品与消费者服务"},"translate_title":"中央大酒店（新交所股票代码：H18）将寻求扭转其回报","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"H18.SI":0.9},"content_text":"What financial metrics can indicate to us that a company is maturing or even in decline? Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides with a decreasing amount of capital employed. This combination can tell you that not only is the company investing less, it's earning less on what it does invest. So after glancing at the trends within Hotel Grand Central (SGX:H18), we weren't too hopeful. \n Understanding Return On Capital Employed (ROCE) \n Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on Hotel Grand Central is: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.016 = S$23m ÷ (S$1.6b - S$81m) (Based on the trailing twelve months to December 2023).\n Therefore, Hotel Grand Central has an ROCE of 1.6%. Ultimately, that's a low return and it under-performs the Hospitality industry average of 4.5%. \n Check out our latest analysis for Hotel Grand Central \n\n\n\n  SGX:H18 Return on Capital Employed June 20th 2024\n \n\n Historical performance is a great place to start when researching a stock so above you can see the gauge for Hotel Grand Central's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Hotel Grand Central. \n What The Trend Of ROCE Can Tell Us \n There is reason to be cautious about Hotel Grand Central, given the returns are trending downwards. Unfortunately the returns on capital have diminished from the 2.3% that they were earning five years ago. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Since returns are falling and the business has the same amount of assets employed, this can suggest it's a mature business that hasn't had much growth in the last five years. So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on Hotel Grand Central becoming one if things continue as they have. \n The Bottom Line On Hotel Grand Central's ROCE \n In summary, it's unfortunate that Hotel Grand Central is generating lower returns from the same amount of capital. Investors haven't taken kindly to these developments, since the stock has declined 35% from where it was five years ago. With underlying trends that aren't great in these areas, we'd consider looking elsewhere. \n Hotel Grand Central does come with some risks though, we found 3 warning signs in our investment analysis, and 2 of those are significant... \n While Hotel Grand Central may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. \nHave 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.\nHave feedback on this article? Concerned about the content? Get in touch with us directly. 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