DPLM.L · LSE · Industrials
Diploma PLC
Also onConsensus Drift
Implied value per share
GBp 2625.22
Market price
GBp 7320.00
Implied upside
-64.1%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case
Current EV/EBITDA of 32.3x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.
Value Per Share
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (GBP). Outflows negative.
| Line | FY26 | FY27 | FY28 | FY29 | FY30 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | GBP 1.7bn | GBP 2.0bn | GBP 2.3bn | GBP 2.6bn | GBP 3.0bn | +14.6% |
| EBIT | GBP 277.7m | GBP 318.3m | GBP 364.8m | GBP 418.0m | GBP 479.1m | +14.6% |
| NOPAT | GBP 208.3m | GBP 238.7m | GBP 273.6m | GBP 313.5m | GBP 359.3m | +14.6% |
| Add depreciation & amortisation | GBP 39.8m | GBP 45.6m | GBP 52.2m | GBP 59.9m | GBP 68.6m | +14.6% |
| Less capital expenditure | GBP -25.5m | GBP -29.2m | GBP -33.5m | GBP -38.4m | GBP -44.0m | +14.6% |
| Less increase in working capital | GBP -6.4m | GBP -7.3m | GBP -8.3m | GBP -9.6m | GBP -11.0m | +14.6% |
| Free cashflow to firm | GBP 216.2m | GBP 247.8m | GBP 284.0m | GBP 325.5m | GBP 373.0m | +14.6% |
| Discount factor | 0.9560 | 0.8737 | 0.7985 | 0.7297 | 0.6669 | - |
| Present value | GBP 206.7m | GBP 216.5m | GBP 226.8m | GBP 237.5m | GBP 248.7m | +4.7% |
| Present Value Of The Forecast | GBP 1.1bn | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 4.50% | GBP assumption - no free live source available for this market (assumption) |
| Equity risk premium | 5.50% | Market assumption |
| Beta | 0.943 | Reported 0.915, pulled toward 1.0 (Blume) |
| Cost of equity | 9.69% | Risk-free + beta x equity risk premium |
| Cost of debt | 5.05% | Interest expense / average total debt |
| Market capitalisation | GBP 9.8bn | 95.5% of capital |
| Total debt | GBP 464.9m | 4.5% of capital, book value as a proxy |
| Tax rate | 25.0% | Effective, capped at statutory |
| WACC | 9.42% | 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%
71% of EV
- Forecast FCFF, final year
- GBP 373.0m
- Capex at depreciation, working capital in reinvestment
- GBP 360.6m
- Less reinvestment at g/ROIC (21.9% of NOPAT)
- GBP -79.0m
- Capitalised
- GBP 281.6m
- ROIC (reported)
- 11.4%
- Terminal value, undiscounted
- GBP 4.2bn
- Terminal value, discounted
- GBP 2.8bn
- Enterprise value
- GBP 3.9bn
- Less net debt
- GBP 383.2m
- Equity value
- GBP 3.5bn
Exit at 20.0x EBITDA
87% of EV
- Terminal value, undiscounted
- GBP 11.0bn
- Terminal value, discounted
- GBP 7.3bn
- Enterprise value
- GBP 8.4bn
- Less net debt
- GBP 383.2m
- Equity value
- GBP 8.1bn
Spread between methods: 78%.
Sensitivity
Value per share (GBP) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 7.42% | 34.91 | 36.13 | 37.58 | 39.34 | 41.53 |
| 8.42% | 29.51 | 30.19 | 30.96 | 31.87 | 32.95 |
| 9.42% | 25.47 | 25.84 | 26.25 | 26.72 | 27.24 |
| 10.42% | 22.34 | 22.52 | 22.72 | 22.94 | 23.17 |
| 11.42% | 19.84 | 19.91 | 19.98 | 20.05 | 20.13 |
Outlined: this model. Green text: above today's price of 73.20. 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.
| Input | Model | Implied | Gap |
|---|---|---|---|
| Revenue growth, every year | 14.6% | 41.7% | +27.1pp |
| EBIT margin | 15.9% | 41.9% | +26.0pp |
| Discount rate | 9.4% | 5.1% | -4.3pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.