Why Lifestyle Communities' (ASX:LIC) Soft Earnings Are Just The Beginning Of Its Problems

Simply Wall St.08-22

The recent earnings release from Lifestyle Communities Limited (ASX:LIC ) was disappointing to investors. We looked deeper and believe that there is even more to be worried about, beyond the soft ...

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We looked deeper and believe that there is even more to be worried about, beyond the soft ...</p>\n\n<a href=\"https://finance.yahoo.com/news/why-lifestyle-communities-asx-lic-204700405.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance_au","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>Why Lifestyle Communities' (ASX:LIC) Soft Earnings Are Just The Beginning Of Its Problems</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\">\nWhy Lifestyle Communities' (ASX:LIC) Soft Earnings Are Just The Beginning Of Its Problems\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-22 04:47 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/why-lifestyle-communities-asx-lic-204700405.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The recent earnings release from Lifestyle Communities Limited (ASX:LIC ) was disappointing to investors. We looked deeper and believe that there is even more to be worried about, beyond the soft ...</p>\n\n<a href=\"https://finance.yahoo.com/news/why-lifestyle-communities-asx-lic-204700405.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":"LIC.AU","symbol_name":"Lifestyle Comnts","start_time":0,"source_url":"https://finance.yahoo.com/news/why-lifestyle-communities-asx-lic-204700405.html","article_id":"2461060228","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/JQ_Rw6GBm6tsDJpHitFuLw--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/d6aab6b9031b339946d16ea231fb4a76"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2461060228","pubTimestamp":1724273220,"sourceInfo":{"source_id":"yahoofinance_au","name":"Yahoo Finance AU"},"weMediaInfo":null,"summary":"The recent earnings release from Lifestyle Communities Limited  was disappointing to investors. We looked deeper and believe that there is even more to be worried about, beyond the soft profit numbers.Check out our latest analysis for Lifestyle Communities. In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, Lifestyle Communities increased the number of shares on issue by 17% over the last twelve months by issuing new shares. As a result, its net income is now split between a greater number of shares. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out Lifestyle Communities' historical EPS growth by clicking on this link.How Is Dilution Impacting Lifestyle Communities' Earnings Per Share ?To sum it all up, Lifestyle Communities got a nice boost to profit from unusual items; ","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"LIC.AU":"Lifestyle Comnts"},"translate_title":"为什么Lifestyle Communities(ASX：LIC)盈利疲软只是其问题的开始","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LIC.AU":1},"content_text":"The recent earnings release from Lifestyle Communities Limited (ASX:LIC ) was disappointing to investors. We looked deeper and believe that there is even more to be worried about, beyond the soft profit numbers. \n Check out our latest analysis for Lifestyle Communities \n\n\n\n  ASX:LIC Earnings and Revenue History August 21st 2024\n \n\n In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, Lifestyle Communities increased the number of shares on issue by 17% over the last twelve months by issuing new shares. As a result, its net income is now split between a greater number of shares. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out Lifestyle Communities' historical EPS growth by clicking on this link. \n How Is Dilution Impacting Lifestyle Communities' Earnings Per Share (EPS)? \n Unfortunately, Lifestyle Communities' profit is down 45% per year over three years. Even looking at the last year, profit was still down 39%. Sadly, earnings per share fell further, down a full 42% in that time. And so, you can see quite clearly that dilution is influencing shareholder earnings. \n If Lifestyle Communities' EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow. \n That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. \n The Impact Of Unusual Items On Profit \n Alongside that dilution, it's also important to note that Lifestyle Communities' profit was boosted by unusual items worth AU$52m in the last twelve months. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And, after all, that's exactly what the accounting terminology implies. We can see that Lifestyle Communities' positive unusual items were quite significant relative to its profit in the year to June 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power. \nOur Take On Lifestyle Communities' Profit Performance\n To sum it all up, Lifestyle Communities got a nice boost to profit from unusual items; without that, its statutory results would have looked worse. On top of that, the dilution means that its earnings per share performance is worse than its profit performance. Considering all this we'd argue Lifestyle Communities' profits probably give an overly generous impression of its sustainable level of profitability. If you want to do dive deeper into Lifestyle Communities, you'd also look into what risks it is currently facing. At Simply Wall St, we found 3 warning signs for Lifestyle Communities and we think they deserve your attention. \n In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free  collection of companies boasting high return on equity, or  this list of stocks with significant insider holdings to be useful. \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.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.27.0","shortVersion":"4.27.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2461060228"}