DCF Studio

    SDLF.L · LSE · Financial Services

    Standard Life plc

    Also onConsensus Drift

    Implied value per share

    GBp 9744.36

    Market price

    GBp 931.50

    Implied upside

    +946.1%

    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.
    Wrong toolThis model values the shares at 10.5x the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedOnly 3 year(s) of history available to anchor assumptions on.
    AdjustedReported capital expenditure averages just 0.06% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

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

    Value Per Share

    Perpetuity growth
    GBp 9744.36+946.1%
    Exit multiple
    GBp 8586.93+821.8%
    Market price
    GBp 931.50

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (GBP). Outflows negative.

    0bn21bn41bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayGBP
    LineFY26FY27FY28FY29FY30CAGR
    RevenueGBP 44.0bnGBP 60.7bnGBP 83.8bnGBP 115.7bnGBP 159.8bn+38.1%
    EBITGBP -1.2bnGBP -1.7bnGBP -2.3bnGBP -3.2bnGBP -4.4bn-38.1%
    NOPATGBP -916.7mGBP -1.3bnGBP -1.7bnGBP -2.4bnGBP -3.3bn-38.1%
    Add depreciation & amortisationGBP 643.5mGBP 888.5mGBP 1.2bnGBP 1.7bnGBP 2.3bn+38.1%
    Less capital expenditureGBP -439.6mGBP -607.0mGBP -838.1mGBP -1.2bnGBP -1.6bn+38.1%
    Less increase in working capitalGBP 12.1bnGBP 16.7bnGBP 23.1bnGBP 31.9bnGBP 44.1bn-38.1%
    Free cashflow to firmGBP 11.4bnGBP 15.8bnGBP 21.8bnGBP 30.0bnGBP 41.5bn+38.1%
    Discount factor0.95940.88320.81300.74840.6889-
    Present valueGBP 10.9bnGBP 13.9bnGBP 17.7bnGBP 22.5bnGBP 28.6bn+27.1%
    Present Value Of The ForecastGBP 93.6bn

    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
    Beta0.938Reported 0.908, pulled toward 1.0 (Blume)
    Cost of equity9.66%Risk-free + beta x equity risk premium
    Cost of debt7.62%Interest expense / average total debt
    Market capitalisationGBP 9.3bn73.9% of capital
    Total debtGBP 3.3bn26.1% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC8.63%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 97.44

    0% of EV

    Terminal value, undiscounted
    GBP 0.00
    Terminal value, discounted
    GBP 0.00
    Enterprise value
    GBP 93.6bn
    Less net debt
    GBP -4.0bn
    Equity value
    GBP 97.6bn

    Exit at 8.0x EBITDA

    Value per shareGBP 85.87

    -14% of EV

    Terminal value, undiscounted
    GBP -16.8bn
    Terminal value, discounted
    GBP -11.6bn
    Enterprise value
    GBP 82.0bn
    Less net debt
    GBP -4.0bn
    Equity value
    GBP 86.0bn

    Spread between methods: 13%.

    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%
    6.63%102.77102.77102.77102.77102.77
    7.63%100.05100.05100.05100.05100.05
    8.63%97.4497.4497.4497.4497.44
    9.63%94.9494.9494.9494.9494.94
    10.63%92.5592.5592.5592.5592.55

    Outlined: this model. Green text: above today's price of 9.31. 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 year38.1%5.4%-32.7pp
    EBIT margin-2.8%-35.4%-32.6pp
    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.