DCF Studio

    ICG.L · LSE · Financial Services

    ICG plc

    Also onConsensus Drift

    Implied value per share

    GBp 3009.60

    Market price

    GBp 1860.00

    Implied upside

    +61.8%

    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 3009.60+61.8%
    Exit multiple
    GBp 5194.36+179.3%
    Market price
    GBp 1860.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (GBP). Outflows negative.

    0m408m815mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayGBP
    LineFY27FY28FY29FY30FY31CAGR
    RevenueGBP 1.2bnGBP 1.5bnGBP 1.8bnGBP 2.1bnGBP 2.5bn+19.8%
    EBITGBP 654.2mGBP 783.7mGBP 938.8mGBP 1.1bnGBP 1.3bn+19.8%
    NOPATGBP 566.8mGBP 679.0mGBP 813.5mGBP 974.5mGBP 1.2bn+19.8%
    Add depreciation & amortisationGBP 26.3mGBP 31.5mGBP 37.7mGBP 45.2mGBP 54.1m+19.8%
    Less capital expenditureGBP -13.3mGBP -15.9mGBP -19.0mGBP -22.8mGBP -27.3m+19.8%
    Less increase in working capitalGBP -184.1mGBP -220.5mGBP -264.2mGBP -316.5mGBP -379.2m+19.8%
    Free cashflow to firmGBP 395.8mGBP 474.1mGBP 568.0mGBP 680.4mGBP 815.1m+19.8%
    Discount factor0.96480.89820.83610.77840.7246-
    Present valueGBP 381.8mGBP 425.8mGBP 474.9mGBP 529.6mGBP 590.6m+11.5%
    Present Value Of The ForecastGBP 2.4bn

    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
    Beta1.293Reported 1.437, pulled toward 1.0 (Blume)
    Cost of equity11.61%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 5.4bn45.7% of capital
    Total debtGBP 6.4bn54.3% of capital, book value as a proxy
    Tax rate13.4%Effective, capped at statutory
    WACC7.42%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%

    Value per shareGBP 30.10

    83% of EV

    Forecast FCFF, final year
    GBP 815.1m
    Capex at depreciation, working capital in reinvestment
    GBP 1.2bn
    Less reinvestment at g/ROIC (33.7% of NOPAT)
    GBP -398.2m
    Capitalised
    GBP 783.8m
    ROIC (WACC floor)
    7.4%
    Terminal value, undiscounted
    GBP 16.3bn
    Terminal value, discounted
    GBP 11.8bn
    Enterprise value
    GBP 14.2bn
    Less net debt
    GBP 5.4bn
    Equity value
    GBP 8.8bn

    Exit at 17.9x EBITDA

    Value per shareGBP 51.94

    88% of EV

    Terminal value, undiscounted
    GBP 25.1bn
    Terminal value, discounted
    GBP 18.2bn
    Enterprise value
    GBP 20.6bn
    Less net debt
    GBP 5.4bn
    Equity value
    GBP 15.2bn

    Spread between methods: 53%.

    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%
    5.42%49.9150.2650.6451.0651.54
    6.42%38.1638.4038.6338.8739.11
    7.42%29.7029.9030.1030.2930.49
    8.42%23.2923.4523.6223.7923.95
    9.42%18.2618.4118.5518.6918.84

    Outlined: this model. Green text: above today's price of 18.60. 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 year19.8%12.4%-7.4pp
    EBIT margin53.0%41.3%-11.8pp
    Discount rate7.4%9.4%+2.0pp
    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.