DCF Studio

    D01.SI · SES · Consumer Defensive

    DFI Retail Group Holdings Limited

    Also onConsensus Drift

    Implied value per share

    USD 2.23

    Market price

    USD 3.12

    Implied upside

    -28.4%

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

    AdjustedReported capital expenditure averages 2.11% of revenue against depreciation of 9.33%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 9.33% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    USD 2.23-28.4%
    Exit multiple
    USD 2.61-16.3%
    Market price
    USD 3.12

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m175m351mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 8.8bnUSD 8.7bnUSD 8.6bnUSD 8.5bnUSD 8.4bn-1.1%
    EBITUSD 304.5mUSD 301.1mUSD 297.7mUSD 294.4mUSD 291.1m-1.1%
    NOPATUSD 251.4mUSD 248.5mUSD 245.7mUSD 243.0mUSD 240.3m-1.1%
    Add depreciation & amortisationUSD 818.0mUSD 808.8mUSD 799.8mUSD 790.8mUSD 781.9m-1.1%
    Less capital expenditureUSD -818.0mUSD -808.8mUSD -799.8mUSD -790.8mUSD -781.9m-1.1%
    Less increase in working capitalUSD 99.5mUSD 98.4mUSD 97.3mUSD 96.2mUSD 95.1m+1.1%
    Free cashflow to firmUSD 350.8mUSD 346.9mUSD 343.0mUSD 339.2mUSD 335.4m-1.1%
    Discount factor0.96820.90760.85070.79750.7475-
    Present valueUSD 339.7mUSD 314.8mUSD 291.8mUSD 270.5mUSD 250.7m-7.3%
    Present Value Of The ForecastUSD 1.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.640Reported 0.462, pulled toward 1.0 (Blume)
    Cost of equity8.36%Risk-free + beta x equity risk premium
    Cost of debt4.47%Interest expense / average total debt
    Market capitalisationUSD 4.2bn64.1% of capital
    Total debtUSD 2.4bn35.9% of capital, book value as a proxy
    Tax rate17.5%Effective, capped at statutory
    WACC6.68%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 shareUSD 2.23

    72% of EV

    Forecast FCFF, final year
    USD 335.4m
    Capex at depreciation, working capital in reinvestment
    USD 240.3m
    Less reinvestment at g/ROIC (14.6% of NOPAT)
    USD -35.2m
    Capitalised
    USD 205.1m
    ROIC (reported)
    17.1%
    Terminal value, undiscounted
    USD 5.0bn
    Terminal value, discounted
    USD 3.8bn
    Enterprise value
    USD 5.2bn
    Less net debt
    USD 2.2bn
    Equity value
    USD 3.0bn

    Exit at 5.3x EBITDA

    Value per shareUSD 2.61

    74% of EV

    Terminal value, undiscounted
    USD 5.7bn
    Terminal value, discounted
    USD 4.3bn
    Enterprise value
    USD 5.7bn
    Less net debt
    USD 2.2bn
    Equity value
    USD 3.5bn

    Spread between methods: 16%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.68%3.714.365.306.819.58
    5.68%2.552.873.293.874.71
    6.68%1.832.012.232.522.89
    7.68%1.341.451.581.741.94
    8.68%0.991.061.141.241.35

    Outlined: this model. Green text: above today's price of 3.12. 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
    Revenue growth, every year-1.1%-11.2%-10.1pp
    EBIT margin3.5%4.3%+0.9pp
    Discount rate6.7%5.8%-0.9pp
    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.