Analyzing Serica Energy's Excellent Capital Allocation Strategies and Growing ROCE

Serica Energy (LON:SQZ) is a compounding machine, evidenced by its increasing return on capital employed (ROCE) and growth in capital employed over the past five years. With a current ROCE of 29%, significantly above the industry average of 10%, the company has effectively leveraged its assets to generate higher profits without relying on additional liabilities. This positive trend has seen ROCE rise from 11% five years ago, reflecting successful reinvestment and profitability.