DCF Studio

    HLG.NZ · NZE · Consumer Cyclical

    Hallenstein Glasson Holdings Limited

    Also onConsensus Drift

    Implied value per share

    NZD 2.51

    Market price

    NZD 12.76

    Implied upside

    -80.3%

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

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedOnly 3 year(s) of history available to anchor assumptions on.
    AdjustedConsensus rests on as few as 2 analyst estimate(s).
    AdjustedReported capital expenditure averages 3.21% of revenue against depreciation and amortisation of 9.29%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 9.29% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: NZD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    NZD 2.51-80.3%
    Exit multiple
    NZD 15.94+24.9%
    Market price
    NZD 12.76

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    0m9m18mFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayNZD
    LineFY25FY26FY27FY28FY29CAGR
    RevenueNZD 485.2mNZD 540.3mNZD 601.8mNZD 670.2mNZD 746.4m+11.4%
    EBITNZD 10.6mNZD 11.8mNZD 13.1mNZD 14.6mNZD 16.3m+11.4%
    NOPATNZD 7.6mNZD 8.5mNZD 9.5mNZD 10.5mNZD 11.7m+11.4%
    Add depreciation & amortisationNZD 45.1mNZD 50.2mNZD 55.9mNZD 62.3mNZD 69.3m+11.4%
    Less capital expenditureNZD -45.1mNZD -50.2mNZD -55.9mNZD -62.3mNZD -69.3m+11.4%
    Less increase in working capitalNZD 3.8mNZD 4.3mNZD 4.7mNZD 5.3mNZD 5.9m-11.4%
    Free cashflow to firmNZD 11.5mNZD 12.8mNZD 14.2mNZD 15.8mNZD 17.6m+11.4%
    Discount factor0.96600.90150.84140.78520.7328-
    Present valueNZD 11.1mNZD 11.5mNZD 12.0mNZD 12.4mNZD 12.9m+3.9%
    Present Value Of The ForecastNZD 59.8m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%NZD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.448Reported 0.176, pulled toward 1.0 (Blume)
    Cost of equity7.41%Risk-free + beta x equity risk premium
    Cost of debt6.50%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationNZD 761.1m90.6% of capital
    Total debtNZD 79.2m9.4% of capital, book value as a proxy
    Tax rate28.0%Effective, capped at statutory
    WACC7.15%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 shareNZD 2.51

    67% of EV

    Forecast FCFF, final year
    NZD 17.6m
    Capex at depreciation, working capital in reinvestment
    NZD 11.7m
    Less reinvestment at g/ROIC (34.9% of NOPAT)
    NZD -4.1m
    Capitalised
    NZD 7.6m
    ROIC (WACC floor)
    7.2%
    Terminal value, undiscounted
    NZD 168.1m
    Terminal value, discounted
    NZD 123.2m
    Enterprise value
    NZD 183.0m
    Less net debt
    NZD 33.3m
    Equity value
    NZD 149.8m

    Exit at 14.7x EBITDA

    Value per shareNZD 15.94

    94% of EV

    Terminal value, undiscounted
    NZD 1.3bn
    Terminal value, discounted
    NZD 924.0m
    Enterprise value
    NZD 983.9m
    Less net debt
    NZD 33.3m
    Equity value
    NZD 950.6m

    Spread between methods: 146%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.15%3.934.134.414.815.44
    6.15%3.053.123.193.293.43
    7.15%2.492.502.512.522.53
    8.15%2.142.152.162.172.18
    9.15%1.871.881.881.891.90

    Outlined: this model. Green text: above today's price of 12.76. 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 year11.4%48.6%+37.2pp
    EBIT margin2.2%10.4%+8.2pp
    Discount rate7.2%3.4%-3.7pp
    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.