Gullewa (ASX:GUL) Aims to Sustain the Growth of Its Capital Returns

March 04, 2025 04:03 PM AEDT | By Team Kalkine Media

Gullewa (ASX:GUL) Aims to Sustain the Growth of Its Capital Returns

Understanding ROCE

Return on Capital Employed measures the pre-tax profits generated from capital used in the business. The calculation for Gullewa is as follows:

ROCE = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

For Gullewa, this is 0.17 = AU$3.2m ÷ (AU$20m - AU$555k) based on data up to June 2024, resulting in a ROCE of 17%. In comparison, the Metals and Mining industry average stands at 8.6%, making Gullewa's performance noteworthy.

The Trend of ROCE

Over the past five years, Gullewa has shown remarkable growth in its returns from capital employed, reaching 17%. Additionally, the capital employed has skyrocketed by 138%, suggesting substantial internal investment opportunities with growing returns.

Concluding Thoughts

Gullewa has effectively reinvested in its operations, achieving substantial returns, and this trend seems to offer promising prospects. Shareholders have been rewarded with a 63% return over five years, reflecting confidence in the company’s future potential.

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