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    VNT.AX · ASX · Industrials

    Ventia Services Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 4.97

    Market price

    AUD 6.00

    Implied upside

    -17.1%

    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.
    AdjustedReported capital expenditure averages 1.14% of revenue against depreciation and amortisation of 2.47%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 2.47% 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.

    Value Per Share

    Perpetuity growth
    AUD 4.97-17.1%
    Exit multiple
    AUD 6.52+8.7%
    Market price
    AUD 6.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m168m337mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayAUD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueAUD 6.5bnAUD 6.9bnAUD 7.3bnAUD 7.7bnAUD 8.2bn+5.9%
    EBITAUD 373.4mAUD 395.6mAUD 419.0mAUD 443.8mAUD 470.1m+5.9%
    NOPATAUD 262.6mAUD 278.1mAUD 294.6mAUD 312.0mAUD 330.5m+5.9%
    Add depreciation & amortisationAUD 160.8mAUD 170.4mAUD 180.5mAUD 191.2mAUD 202.5m+5.9%
    Less capital expenditureAUD -160.8mAUD -170.4mAUD -180.5mAUD -191.2mAUD -202.5m+5.9%
    Less increase in working capitalAUD 5.1mAUD 5.4mAUD 5.7mAUD 6.1mAUD 6.4m-5.9%
    Free cashflow to firmAUD 267.7mAUD 283.5mAUD 300.3mAUD 318.1mAUD 337.0m+5.9%
    Discount factor0.96200.89030.82390.76250.7056-
    Present valueAUD 257.5mAUD 252.4mAUD 247.4mAUD 242.6mAUD 237.8m-2.0%
    Present Value Of The ForecastAUD 1.2bn

    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
    Beta0.588Reported 0.385, pulled toward 1.0 (Blume)
    Cost of equity8.88%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 4.9bn84.0% of capital
    Total debtAUD 935.1m16.0% of capital, book value as a proxy
    Tax rate29.7%Effective, capped at statutory
    WACC8.06%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 4.97

    75% of EV

    Forecast FCFF, final year
    AUD 337.0m
    Capex at depreciation, working capital in reinvestment
    AUD 330.5m
    Less reinvestment at g/ROIC (14.2% of NOPAT)
    AUD -47.0m
    Capitalised
    AUD 283.5m
    ROIC (reported)
    17.6%
    Terminal value, undiscounted
    AUD 5.2bn
    Terminal value, discounted
    AUD 3.7bn
    Enterprise value
    AUD 4.9bn
    Less net debt
    AUD 698.8m
    Equity value
    AUD 4.2bn

    Exit at 10.6x EBITDA

    Value per shareAUD 6.52

    80% of EV

    Terminal value, undiscounted
    AUD 7.1bn
    Terminal value, discounted
    AUD 5.0bn
    Enterprise value
    AUD 6.2bn
    Less net debt
    AUD 698.8m
    Equity value
    AUD 5.5bn

    Spread between methods: 27%.

    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%
    6.06%6.787.358.079.0410.37
    7.06%5.445.786.186.697.33
    8.06%4.524.734.975.275.62
    9.06%3.833.974.134.314.53
    10.06%3.313.403.513.633.76

    Outlined: this model. Green text: above today's price of 6.00. 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 year5.9%9.8%+3.8pp
    EBIT margin5.7%6.8%+1.0pp
    Discount rate8.1%7.2%-0.9pp
    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.