DCF Studio

    SPX.L · LSE · Industrials

    Spirax Group plc

    Also onConsensus Drift

    Implied value per share

    GBp 3240.90

    Market price

    GBp 6905.00

    Implied upside

    -53.1%

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

    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    GBp 3240.90-53.1%
    Exit multiple
    GBp 6553.85-5.1%
    Market price
    GBp 6905.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (GBP). Outflows negative.

    0m119m239mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayGBP
    LineFY26FY27FY28FY29FY30CAGR
    RevenueGBP 1.7bnGBP 1.8bnGBP 1.8bnGBP 1.8bnGBP 1.9bn+1.9%
    EBITGBP 305.5mGBP 311.3mGBP 317.1mGBP 323.1mGBP 329.1m+1.9%
    NOPATGBP 229.2mGBP 233.5mGBP 237.8mGBP 242.3mGBP 246.8m+1.9%
    Add depreciation & amortisationGBP 97.0mGBP 98.8mGBP 100.6mGBP 102.5mGBP 104.4m+1.9%
    Less capital expenditureGBP -100.3mGBP -102.2mGBP -104.1mGBP -106.0mGBP -108.0m+1.9%
    Less increase in working capitalGBP -4.1mGBP -4.2mGBP -4.2mGBP -4.3mGBP -4.4m+1.9%
    Free cashflow to firmGBP 221.7mGBP 225.9mGBP 230.1mGBP 234.4mGBP 238.8m+1.9%
    Discount factor0.95630.87460.79990.73150.6690-
    Present valueGBP 212.1mGBP 197.6mGBP 184.1mGBP 171.5mGBP 159.8m-6.8%
    Present Value Of The ForecastGBP 925.0m

    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
    Beta1.096Reported 1.144, pulled toward 1.0 (Blume)
    Cost of equity10.53%Risk-free + beta x equity risk premium
    Cost of debt4.59%Interest expense / average total debt
    Market capitalisationGBP 5.1bn83.3% of capital
    Total debtGBP 1.0bn16.7% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC9.34%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 32.41

    70% of EV

    Forecast FCFF, final year
    GBP 238.8m
    Capex at depreciation, working capital in reinvestment
    GBP 280.7m
    Less reinvestment at g/ROIC (24.5% of NOPAT)
    GBP -68.6m
    Capitalised
    GBP 212.1m
    ROIC (reported)
    10.2%
    Terminal value, undiscounted
    GBP 3.2bn
    Terminal value, discounted
    GBP 2.1bn
    Enterprise value
    GBP 3.0bn
    Less net debt
    GBP 654.9m
    Equity value
    GBP 2.4bn

    Exit at 15.8x EBITDA

    Value per shareGBP 65.54

    83% of EV

    Terminal value, undiscounted
    GBP 6.8bn
    Terminal value, discounted
    GBP 4.6bn
    Enterprise value
    GBP 5.5bn
    Less net debt
    GBP 654.9m
    Equity value
    GBP 4.8bn

    Spread between methods: 68%.

    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%
    7.34%45.1446.6148.3650.4853.11
    8.34%37.4538.1839.0340.0041.15
    9.34%31.7132.0532.4132.8133.26
    10.34%27.3327.4427.5627.6827.80
    11.34%24.0924.2024.3024.4024.51

    Outlined: this model. Green text: above today's price of 69.05. 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 year1.9%18.4%+16.5pp
    EBIT margin17.6%34.5%+16.9pp
    Discount rate9.3%6.0%-3.3pp
    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.