DCF Studio

    ABDN.L · LSE · Financial Services

    Aberdeen Group Plc

    Also onConsensus Drift

    Implied value per share

    GBp 131.81

    Market price

    GBp 239.60

    Implied upside

    -45.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    GBp 131.81-45.0%
    Exit multiple
    GBp 117.18-51.1%
    Market price
    GBp 239.60

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (GBP). Outflows negative.

    0m13m27mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayGBP
    LineFY26FY27FY28FY29FY30CAGR
    RevenueGBP 1.9bnGBP 2.0bnGBP 2.2bnGBP 2.4bnGBP 2.5bn+7.8%
    EBITGBP -12.4mGBP -13.4mGBP -14.4mGBP -15.5mGBP -16.7m-7.8%
    NOPATGBP -11.7mGBP -12.6mGBP -13.6mGBP -14.7mGBP -15.8m-7.8%
    Add depreciation & amortisationGBP 190.8mGBP 205.8mGBP 221.9mGBP 239.2mGBP 257.9m+7.8%
    Less capital expenditureGBP -44.1mGBP -47.6mGBP -51.3mGBP -55.3mGBP -59.6m+7.8%
    Less increase in working capitalGBP -115.1mGBP -124.1mGBP -133.8mGBP -144.2mGBP -155.5m+7.8%
    Free cashflow to firmGBP 20.0mGBP 21.5mGBP 23.2mGBP 25.0mGBP 27.0m+7.8%
    Discount factor0.95070.85920.77650.70180.6343-
    Present valueGBP 19.0mGBP 18.5mGBP 18.0mGBP 17.6mGBP 17.1m-2.6%
    Present Value Of The ForecastGBP 90.2m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%GBP assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.269Reported 1.401, pulled toward 1.0 (Blume)
    Cost of equity11.48%Risk-free + beta x equity risk premium
    Cost of debt4.50%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationGBP 4.3bn88.5% of capital
    Total debtGBP 557.0m11.5% of capital, book value as a proxy
    Tax rate5.6%Effective, capped at statutory
    WACC10.65%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareGBP 1.32

    92% of EV

    Forecast FCFF, final year
    GBP 27.0m
    Capex at depreciation, working capital in reinvestment
    GBP 177.3m
    Less reinvestment at g/ROIC (23.5% of NOPAT)
    GBP -41.6m
    Capitalised
    GBP 135.7m
    ROIC (WACC floor)
    10.6%
    Terminal value, undiscounted
    GBP 1.7bn
    Terminal value, discounted
    GBP 1.1bn
    Enterprise value
    GBP 1.2bn
    Less net debt
    GBP -1.2bn
    Equity value
    GBP 2.4bn

    Exit at 5.3x EBITDA

    Value per shareGBP 1.17

    90% of EV

    Terminal value, undiscounted
    GBP 1.3bn
    Terminal value, discounted
    GBP 815.1m
    Enterprise value
    GBP 905.3m
    Less net debt
    GBP -1.2bn
    Equity value
    GBP 2.1bn

    Spread between methods: 12%.

    Sensitivity

    Value per share (GBP) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.65%1.511.521.521.521.53
    9.65%1.401.401.411.411.41
    10.65%1.311.321.321.321.32
    11.65%1.241.241.241.251.25
    12.65%1.181.181.181.191.19

    Outlined: this model. Green text: above today's price of 2.40. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    EBIT margin-0.7%8.0%+8.7pp
    Discount rate10.6%5.2%-5.5pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.