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Returns At S.C. Severnav (BVB:SEVE) Appear To Be Weighed Down

Simply Wall St · 1d ago

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. However, after briefly looking over the numbers, we don't think S.C. Severnav (BVB:SEVE) has the makings of a multi-bagger going forward, but let's have a look at why that may be.

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What Is Return On Capital Employed (ROCE)?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for S.C. Severnav, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.046 = RON7.8m ÷ (RON230m - RON61m) (Based on the trailing twelve months to December 2024).

Therefore, S.C. Severnav has an ROCE of 4.6%. Ultimately, that's a low return and it under-performs the Machinery industry average of 7.0%.

Check out our latest analysis for S.C. Severnav

roce
BVB:SEVE Return on Capital Employed December 4th 2025

Historical performance is a great place to start when researching a stock so above you can see the gauge for S.C. Severnav's ROCE against it's prior returns. If you'd like to look at how S.C. Severnav has performed in the past in other metrics, you can view this free graph of S.C. Severnav's past earnings, revenue and cash flow.

The Trend Of ROCE

In terms of S.C. Severnav's historical ROCE trend, it doesn't exactly demand attention. Over the past five years, ROCE has remained relatively flat at around 4.6% and the business has deployed 39% more capital into its operations. This poor ROCE doesn't inspire confidence right now, and with the increase in capital employed, it's evident that the business isn't deploying the funds into high return investments.

In Conclusion...

In summary, S.C. Severnav has simply been reinvesting capital and generating the same low rate of return as before. And investors may be recognizing these trends since the stock has only returned a total of 2.8% to shareholders over the last year. Therefore, if you're looking for a multi-bagger, we'd propose looking at other options.

One final note, you should learn about the 4 warning signs we've spotted with S.C. Severnav (including 3 which are potentially serious) .

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.