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Your Valuation
10 June 2008 |
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Valuation Details
| Member: | TheCrunchBlog |
| On: | 30 Jun 2008 |
| Views: | 81 |
| Comments: | 1 |
Company Details
| Updated: | 3 hours ago |
| Ticker: | WHS |
| Market: | NZE |
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/06/understanding-the-warehouse-whs-valuation/
Our assumptions of revenues for the next three years are NZ$1.745 billion in 2008 increasing to NZ$1.825 billion in 2010 – a compound annual growth rate of 2.3% (2008-10). We have projected flat EBITDA margins of 10% to 2010.
We have used a terminal growth rate of 3%. This is based on a New Zealand long-run economy growth rate. If you have a more optimistic or pessimistic view of the growth for WHS this will impact the valuation.
We have used a WACC (discount rate) of 8.5 %. The WACC (discount rate) has a material impact on a discounted cash flow valuation (as does the terminal growth rate). PricewaterhouseCoopers December 2007 cost of capital report gives WHS a calculated WACC of 8.2%.
We used a terminal capital expenditure number of NZ$60 million. In our opinion capital expenditure should stabilise around this number.