DCF Studio

    MND.AX · ASX · Industrials

    Monadelphous Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 15.12

    Market price

    AUD 30.62

    Implied upside

    -50.6%

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

    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    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.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    AUD 15.12-50.6%
    Exit multiple
    AUD 9.32-69.6%
    Market price
    AUD 30.62

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m18m35mFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayAUD
    LineFY25FY26FY27FY28FY29CAGR
    RevenueAUD 2.1bnAUD 2.2bnAUD 2.3bnAUD 2.5bnAUD 2.6bn+5.4%
    EBITAUD 37.1mAUD 39.1mAUD 41.2mAUD 43.4mAUD 45.7m+5.4%
    NOPATAUD 26.2mAUD 27.6mAUD 29.1mAUD 30.7mAUD 32.3m+5.4%
    Add depreciation & amortisationAUD 40.0mAUD 42.1mAUD 44.4mAUD 46.8mAUD 49.3m+5.4%
    Less capital expenditureAUD -42.9mAUD -45.2mAUD -47.6mAUD -50.1mAUD -52.8m+5.4%
    Less increase in working capitalAUD 5.1mAUD 5.3mAUD 5.6mAUD 5.9mAUD 6.3m-5.4%
    Free cashflow to firmAUD 28.4mAUD 30.0mAUD 31.6mAUD 33.3mAUD 35.0m+5.4%
    Discount factor0.98160.94590.91140.87820.8462-
    Present valueAUD 27.9mAUD 28.3mAUD 28.8mAUD 29.2mAUD 29.7m+1.5%
    Present Value Of The ForecastAUD 143.9m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.725Reported 0.589, pulled toward 1.0 (Blume)
    Cost of equity9.70%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 0.000.0% of capital
    Total debtAUD 94.2m100.0% of capital, book value as a proxy
    Tax rate29.3%Effective, capped at statutory
    WACC3.78%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 shareAUD 15.12

    89% of EV

    Forecast FCFF, final year
    AUD 35.0m
    Capex at depreciation, working capital in reinvestment
    AUD 32.3m
    Less reinvestment at g/ROIC (44.5% of NOPAT)
    AUD -14.4m
    Capitalised
    AUD 17.9m
    ROIC (reported)
    5.6%
    Terminal value, undiscounted
    AUD 1.4bn
    Terminal value, discounted
    AUD 1.2bn
    Enterprise value
    AUD 1.4bn
    Less net debt
    AUD -131.6m
    Equity value
    AUD 1.5bn

    Exit at 8.0x EBITDA

    Value per shareAUD 9.32

    82% of EV

    Terminal value, undiscounted
    AUD 760.0m
    Terminal value, discounted
    AUD 643.1m
    Enterprise value
    AUD 787.0m
    Less net debt
    AUD -131.6m
    Equity value
    AUD 918.7m

    Spread between methods: 47%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    1.78%83.08————
    2.78%19.6727.2161.52——
    3.78%11.8513.0315.1219.8541.33
    4.78%8.799.049.399.9210.86
    5.78%7.207.227.247.277.29

    Outlined: this model. Green text: above today's price of 30.62. 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 year5.4%22.2%+16.8pp
    EBIT margin1.8%3.7%+2.0pp
    Discount rate3.8%3.1%-0.7pp
    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.