DCF Studio

    PMV.AX · ASX · Consumer Cyclical

    Premier Investments Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 27.70

    Market price

    AUD 11.27

    Implied upside

    +145.8%

    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.
    AdjustedReported capital expenditure averages 1.14% of revenue against depreciation and amortisation of 10.42%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 10.42% 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.

    Value Per Share

    Perpetuity growth
    AUD 27.70+145.8%
    Exit multiple
    AUD 16.62+47.5%
    Market price
    AUD 11.27

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m139m278mFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayAUD
    LineFY25FY26FY27FY28FY29CAGR
    RevenueAUD 1.6bnAUD 1.7bnAUD 1.8bnAUD 1.8bnAUD 1.9bn+3.3%
    EBITAUD 352.1mAUD 363.6mAUD 375.4mAUD 387.6mAUD 400.3m+3.3%
    NOPATAUD 255.7mAUD 264.0mAUD 272.6mAUD 281.5mAUD 290.7m+3.3%
    Add depreciation & amortisationAUD 171.7mAUD 177.3mAUD 183.1mAUD 189.0mAUD 195.2m+3.3%
    Less capital expenditureAUD -171.7mAUD -177.3mAUD -183.1mAUD -189.0mAUD -195.2m+3.3%
    Less increase in working capitalAUD -11.2mAUD -11.6mAUD -11.9mAUD -12.3mAUD -12.7m+3.3%
    Free cashflow to firmAUD 244.5mAUD 252.5mAUD 260.7mAUD 269.2mAUD 278.0m+3.3%
    Discount factor0.96440.89690.83420.77590.7216-
    Present valueAUD 235.8mAUD 226.5mAUD 217.5mAUD 208.9mAUD 200.6m-4.0%
    Present Value Of The ForecastAUD 1.1bn

    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
    Beta0.546Reported 0.323, pulled toward 1.0 (Blume)
    Cost of equity8.63%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 1.8bn76.7% of capital
    Total debtAUD 547.3m23.3% of capital, book value as a proxy
    Tax rate27.4%Effective, capped at statutory
    WACC7.52%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 27.70

    76% of EV

    Forecast FCFF, final year
    AUD 278.0m
    Capex at depreciation, working capital in reinvestment
    AUD 290.7m
    Less reinvestment at g/ROIC (18.5% of NOPAT)
    AUD -53.7m
    Capitalised
    AUD 237.0m
    ROIC (reported)
    13.5%
    Terminal value, undiscounted
    AUD 4.8bn
    Terminal value, discounted
    AUD 3.5bn
    Enterprise value
    AUD 4.6bn
    Less net debt
    AUD 137.8m
    Equity value
    AUD 4.4bn

    Exit at 4.0x EBITDA

    Value per shareAUD 16.62

    61% of EV

    Terminal value, undiscounted
    AUD 2.4bn
    Terminal value, discounted
    AUD 1.7bn
    Enterprise value
    AUD 2.8bn
    Less net debt
    AUD 137.8m
    Equity value
    AUD 2.7bn

    Spread between methods: 50%.

    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%
    5.52%38.2041.3945.6351.5260.31
    6.52%30.6132.3234.4437.1540.74
    7.52%25.5426.5227.7029.1330.89
    8.52%21.9122.5123.1924.0024.96
    9.52%19.1819.5519.9720.4420.98

    Outlined: this model. Green text: above today's price of 11.27. 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 year3.3%-17.5%-20.7pp
    EBIT margin21.4%9.2%-12.2pp
    Discount rate7.5%15.3%+7.8pp
    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.