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Comptoir Group's (LON:COM) Returns On Capital Are Heading Higher

Simply Wall St · 1d ago

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So when we looked at Comptoir Group (LON:COM) and its trend of ROCE, we really liked what we saw.

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What Is Return On Capital Employed (ROCE)?

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Comptoir Group is:

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

0.061 = UK£1.2m ÷ (UK£30m - UK£10m) (Based on the trailing twelve months to June 2025).

Thus, Comptoir Group has an ROCE of 6.1%. In absolute terms, that's a low return but it's around the Hospitality industry average of 7.2%.

Check out our latest analysis for Comptoir Group

roce
AIM:COM 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 Comptoir Group's ROCE against it's prior returns. If you're interested in investigating Comptoir Group's past further, check out this free graph covering Comptoir Group's past earnings, revenue and cash flow.

So How Is Comptoir Group's ROCE Trending?

It's great to see that Comptoir Group has started to generate some pre-tax earnings from prior investments. The company was generating losses five years ago, but now it's turned around, earning 6.1% which is no doubt a relief for some early shareholders. In regards to capital employed, Comptoir Group is using 31% less capital than it was five years ago, which on the surface, can indicate that the business has become more efficient at generating these returns. Comptoir Group could be selling under-performing assets since the ROCE is improving.

For the record though, there was a noticeable increase in the company's current liabilities over the period, so we would attribute some of the ROCE growth to that. Essentially the business now has suppliers or short-term creditors funding about 35% of its operations, which isn't ideal. It's worth keeping an eye on this because as the percentage of current liabilities to total assets increases, some aspects of risk also increase.

What We Can Learn From Comptoir Group's ROCE

In a nutshell, we're pleased to see that Comptoir Group has been able to generate higher returns from less capital. And investors seem to expect more of this going forward, since the stock has rewarded shareholders with a 98% return over the last five years. Therefore, we think it would be worth your time to check if these trends are going to continue.

If you want to continue researching Comptoir Group, you might be interested to know about the 1 warning sign that our analysis has discovered.

While Comptoir Group 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.