DCF Studio

    KMD.NZ · NZE · Consumer Cyclical

    KMD Brands Limited

    Also onConsensus Drift

    Implied value per share

    NZD -0.64

    Market price

    NZD 1.89

    Implied upside

    -133.9%

    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.
    AdjustedReported capital expenditure averages 3.14% of revenue against depreciation and amortisation of 12.39%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 12.39% 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 -0.64-133.9%
    Exit multiple
    NZD 6.82+261.8%
    Market price
    NZD 1.89

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    0m6m12mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayNZD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueNZD 982.0mNZD 985.3mNZD 988.5mNZD 991.8mNZD 995.1m+0.3%
    EBITNZD 15.9mNZD 15.9mNZD 16.0mNZD 16.0mNZD 16.1m+0.3%
    NOPATNZD 11.4mNZD 11.5mNZD 11.5mNZD 11.5mNZD 11.6m+0.3%
    Add depreciation & amortisationNZD 121.7mNZD 122.1mNZD 122.5mNZD 122.9mNZD 123.3m+0.3%
    Less capital expenditureNZD -121.7mNZD -122.1mNZD -122.5mNZD -122.9mNZD -123.3m+0.3%
    Less increase in working capitalNZD 10.8kNZD 10.8kNZD 10.9kNZD 10.9kNZD 11.0k-0.3%
    Free cashflow to firmNZD 11.4mNZD 11.5mNZD 11.5mNZD 11.6mNZD 11.6m+0.3%
    Discount factor0.98110.94450.90920.87520.8425-
    Present valueNZD 11.2mNZD 10.8mNZD 10.5mNZD 10.1mNZD 9.8m-3.4%
    Present Value Of The ForecastNZD 52.4m

    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
    Beta0.318Reported -0.018, pulled toward 1.0 (Blume)
    Cost of equity6.57%Risk-free + beta x equity risk premium
    Cost of debt4.50%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationNZD 89.5m19.3% of capital
    Total debtNZD 374.9m80.7% of capital, book value as a proxy
    Tax rate28.0%Effective, capped at statutory
    WACC3.88%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 -0.64

    83% of EV

    Forecast FCFF, final year
    NZD 11.6m
    Capex at depreciation, working capital in reinvestment
    NZD 11.6m
    Less reinvestment at g/ROIC (64.4% of NOPAT)
    NZD -7.5m
    Capitalised
    NZD 4.1m
    ROIC (WACC floor)
    3.9%
    Terminal value, undiscounted
    NZD 306.0m
    Terminal value, discounted
    NZD 257.8m
    Enterprise value
    NZD 310.3m
    Less net debt
    NZD 340.6m
    Equity value
    NZD -30.3m

    Exit at 5.2x EBITDA

    Value per shareNZD 6.82

    92% of EV

    Terminal value, undiscounted
    NZD 726.2m
    Terminal value, discounted
    NZD 611.8m
    Enterprise value
    NZD 664.3m
    Less net debt
    NZD 340.6m
    Equity value
    NZD 323.7m

    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%
    1.88%28.39————
    2.88%3.044.7410.84——
    3.88%-0.69-0.67-0.64-0.61-0.48
    4.88%-2.00-1.98-1.96-1.94-1.92
    5.88%-2.86-2.85-2.83-2.82-2.80

    Outlined: this model. Green text: above today's price of 1.89. 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 year0.3%7.5%+7.2pp
    EBIT margin1.6%2.2%+0.6pp
    Discount rate3.9%3.3%-0.6pp
    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.