DCF Studio

    TRA.NZ · NZE · Consumer Cyclical

    Turners Automotive Group Limited

    Also onConsensus Drift

    Implied value per share

    NZD -6.92

    Market price

    NZD 7.60

    Implied upside

    -191.1%

    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).
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 11.1% of revenue against depreciation of 3.7%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: NZD 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
    NZD -6.92-191.1%
    Exit multiple
    NZD -7.63-200.4%
    Market price
    NZD 7.60

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    -34526760-172633800FY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayNZD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueNZD 253.1mNZD 227.3mNZD 204.1mNZD 183.3mNZD 164.7m-10.2%
    EBITNZD -25.1mNZD -22.6mNZD -20.3mNZD -18.2mNZD -16.3m+10.2%
    NOPATNZD -18.1mNZD -16.2mNZD -14.6mNZD -13.1mNZD -11.8m+10.2%
    Add depreciation & amortisationNZD 9.4mNZD 8.5mNZD 7.6mNZD 6.8mNZD 6.1m-10.2%
    Less capital expenditureNZD -28.1mNZD -25.3mNZD -22.7mNZD -20.4mNZD -18.3m-10.2%
    Less increase in working capitalNZD 2.2mNZD 2.0mNZD 1.8mNZD 1.6mNZD 1.5m+10.2%
    Free cashflow to firmNZD -34.5mNZD -31.0mNZD -27.8mNZD -25.0mNZD -22.5m+10.2%
    Discount factor0.97410.92440.87720.83240.7900-
    Present valueNZD -33.6mNZD -28.7mNZD -24.4mNZD -20.8mNZD -17.7m+14.8%
    Present Value Of The ForecastNZD -125.3m

    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
    Beta0.353Reported 0.035, pulled toward 1.0 (Blume)
    Cost of equity6.80%Risk-free + beta x equity risk premium
    Cost of debt5.22%Interest expense / average total debt
    Market capitalisationNZD 691.8m53.3% of capital
    Total debtNZD 606.4m46.7% of capital, book value as a proxy
    Tax rate28.0%Effective, capped at statutory
    WACC5.38%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 -6.92

    0% of EV

    Terminal value, undiscounted
    NZD 0.00
    Terminal value, discounted
    NZD 0.00
    Enterprise value
    NZD -125.3m
    Less net debt
    NZD 501.5m
    Equity value
    NZD -626.8m

    Exit at 8.0x EBITDA

    Value per shareNZD -7.63

    34% of EV

    Terminal value, undiscounted
    NZD -81.6m
    Terminal value, discounted
    NZD -64.5m
    Enterprise value
    NZD -189.8m
    Less net debt
    NZD 501.5m
    Equity value
    NZD -691.3m

    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%
    3.38%-6.98-6.98-6.98-6.98—
    4.38%-6.95-6.95-6.95-6.95-6.95
    5.38%-6.92-6.92-6.92-6.92-6.92
    6.38%-6.89-6.89-6.89-6.89-6.89
    7.38%-6.87-6.87-6.87-6.87-6.87

    Outlined: this model. Green text: above today's price of 7.60. 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 margin-9.9%51.1%+61.0pp
    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.