DCF Studio

    SKT.NZ · NZE · Communication Services

    SKY Network Television Limited

    Also onConsensus Drift

    Implied value per share

    NZD 4.54

    Market price

    NZD 3.36

    Implied upside

    +35.1%

    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.
    AdjustedConsensus rests on as few as 2 analyst estimate(s).
    NoteRisk-free rate is an assumption: NZD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    NZD 4.54+35.1%
    Exit multiple
    NZD 4.58+36.4%
    Market price
    NZD 3.36

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    0m27m54mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayNZD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueNZD 849.9mNZD 875.7mNZD 902.2mNZD 929.6mNZD 957.8m+3.0%
    EBITNZD 54.6mNZD 56.2mNZD 57.9mNZD 59.7mNZD 61.5m+3.0%
    NOPATNZD 39.3mNZD 40.5mNZD 41.7mNZD 43.0mNZD 44.3m+3.0%
    Add depreciation & amortisationNZD 93.8mNZD 96.7mNZD 99.6mNZD 102.6mNZD 105.8m+3.0%
    Less capital expenditureNZD -83.0mNZD -85.6mNZD -88.1mNZD -90.8mNZD -93.6m+3.0%
    Less increase in working capitalNZD -1.9mNZD -1.9mNZD -2.0mNZD -2.1mNZD -2.1m+3.0%
    Free cashflow to firmNZD 48.2mNZD 49.7mNZD 51.2mNZD 52.7mNZD 54.3m+3.0%
    Discount factor0.96210.89040.82410.76280.7060-
    Present valueNZD 46.4mNZD 44.2mNZD 42.2mNZD 40.2mNZD 38.4m-4.6%
    Present Value Of The ForecastNZD 211.4m

    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
    Beta0.638Reported 0.460, pulled toward 1.0 (Blume)
    Cost of equity8.65%Risk-free + beta x equity risk premium
    Cost of debt4.96%Interest expense / average total debt
    Market capitalisationNZD 462.6m88.1% of capital
    Total debtNZD 62.5m11.9% of capital, book value as a proxy
    Tax rate28.0%Effective, capped at statutory
    WACC8.04%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 4.54

    65% of EV

    Forecast FCFF, final year
    NZD 54.3m
    Capex at depreciation, working capital in reinvestment
    NZD 44.3m
    Less reinvestment at g/ROIC (30.6% of NOPAT)
    NZD -13.6m
    Capitalised
    NZD 30.7m
    ROIC (reported)
    8.2%
    Terminal value, undiscounted
    NZD 567.9m
    Terminal value, discounted
    NZD 401.0m
    Enterprise value
    NZD 612.3m
    Less net debt
    NZD -16.7m
    Equity value
    NZD 629.0m

    Exit at 3.4x EBITDA

    Value per shareNZD 4.58

    66% of EV

    Terminal value, undiscounted
    NZD 576.6m
    Terminal value, discounted
    NZD 407.1m
    Enterprise value
    NZD 618.5m
    Less net debt
    NZD -16.7m
    Equity value
    NZD 635.1m

    Spread between methods: 1%.

    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%
    6.04%6.196.396.646.977.42
    7.04%5.195.275.365.475.60
    8.04%4.504.524.544.564.58
    9.04%4.044.054.064.084.09
    10.04%3.683.693.703.713.72

    Outlined: this model. Green text: above today's price of 3.36. 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 year3.0%-5.3%-8.3pp
    EBIT margin6.4%4.6%-1.8pp
    Discount rate8.0%11.2%+3.1pp
    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.