DCF Studio

    SUL.AX · ASX · Consumer Cyclical

    Super Retail Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD -4.79

    Market price

    AUD 12.18

    Implied upside

    -139.3%

    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.
    AdjustedReported capital expenditure averages 3.34% of revenue against depreciation and amortisation of 8.84%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 8.84% 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.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

    Value Per Share

    Perpetuity growth
    AUD -4.79-139.3%
    Exit multiple
    AUD 10.53-13.5%
    Market price
    AUD 12.18

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    -7004559-35022790FY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 4.3bnAUD 4.5bnAUD 4.6bnAUD 4.8bnAUD 5.0bn+3.4%
    EBITAUD 38.5mAUD 39.8mAUD 41.2mAUD 42.5mAUD 44.0m+3.4%
    NOPATAUD 27.2mAUD 28.1mAUD 29.1mAUD 30.0mAUD 31.1m+3.4%
    Add depreciation & amortisationAUD 383.6mAUD 396.5mAUD 409.8mAUD 423.6mAUD 437.9m+3.4%
    Less capital expenditureAUD -383.6mAUD -396.5mAUD -409.8mAUD -423.6mAUD -437.9m+3.4%
    Less increase in working capitalAUD -33.3mAUD -34.5mAUD -35.6mAUD -36.8mAUD -38.1m+3.4%
    Free cashflow to firmAUD -6.1mAUD -6.3mAUD -6.6mAUD -6.8mAUD -7.0m-3.4%
    Discount factor0.95820.87990.80790.74180.6812-
    Present valueAUD -5.9mAUD -5.6mAUD -5.3mAUD -5.0mAUD -4.8m+5.1%
    Present Value Of The ForecastAUD -26.6m

    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
    Beta1.004Reported 1.006, pulled toward 1.0 (Blume)
    Cost of equity11.37%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 2.8bn67.5% of capital
    Total debtAUD 1.3bn32.5% of capital, book value as a proxy
    Tax rate29.4%Effective, capped at statutory
    WACC8.91%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 -4.79

    112% of EV

    Forecast FCFF, final year
    AUD -7.0m
    Capex at depreciation, working capital in reinvestment
    AUD 31.1m
    Less reinvestment at g/ROIC (28.1% of NOPAT)
    AUD -8.7m
    Capitalised
    AUD 22.3m
    ROIC (WACC floor)
    8.9%
    Terminal value, undiscounted
    AUD 357.4m
    Terminal value, discounted
    AUD 243.4m
    Enterprise value
    AUD 216.9m
    Less net debt
    AUD 1.3bn
    Equity value
    AUD -1.1bn

    Exit at 11.4x EBITDA

    Value per shareAUD 10.53

    101% of EV

    Terminal value, undiscounted
    AUD 5.5bn
    Terminal value, discounted
    AUD 3.7bn
    Enterprise value
    AUD 3.7bn
    Less net debt
    AUD 1.3bn
    Equity value
    AUD 2.4bn

    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%
    6.91%-4.38-4.37-4.36-4.36-4.35
    7.91%-4.62-4.61-4.60-4.60-4.59
    8.91%-4.80-4.79-4.79-4.78-4.78
    9.91%-4.94-4.94-4.93-4.93-4.92
    10.91%-5.06-5.05-5.05-5.04-5.04

    Outlined: this model. Green text: above today's price of 12.18. 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
    EBIT margin0.9%10.4%+9.5pp
    Discount rate8.9%2.6%-6.3pp
    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.