PGG Wrightson Limited (PGW)

Discount cash flow analysis

Buy Undervalued by 292.0%

5% margin of safety What's this?


How does this work?

This is an interactive analyst report for PGG Wrightson Limited, based on a discounted cash flow valuation approach.

You can modify the assumptions and the valuation will be updated automatically. You can also save and share your valuation.

Values in $ millions
2008 2009 2010 2011 2012 2013 2014 2015

What will the revenues be in the future?

Growth beyond year three is driven by the terminal growth rate.

Sensitivity matrix

Discount Rate %

  -1% $2.00 $1.94 $1.88
Terminal Growth% 0 $2.02 $1.96 $1.90
  +1% $2.04 $1.98 $1.92

How does a change in discount rate or terminal growth affect valuation?

This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate

Valuations and comments

  • Valuecruncher created a new valuation of $1.27 (undervalued by 154.0%) - over 4 years ago
  • sambling created a new valuation of $0.70 (undervalued by 16.67%) - 11 years ago
  • gpameek created a new valuation of $0.85 (undervalued by 32.81%) - over 11 years ago
  • GordonGekko created a new valuation of $1.20 (undervalued by 0.0%) - over 11 years ago
  • GordonGekko created a new valuation of $1.06 (overvalued by 12.4%) - almost 12 years ago
  • gordonsk created a new valuation of $0.90 (overvalued by 26.23%) - almost 12 years ago
  • GordonGekko created a new valuation of $0.90 (overvalued by 4.26%) - almost 12 years ago
  • NZXCrunchBlog created a new valuation of $1.96 (undervalued by 15.29%) - over 12 years ago
  • KiwiEMH created a new valuation of $1.62 (undervalued by 1.89%) - over 12 years ago
  • KiwiEMH created a new valuation of $2.64 (overvalued by 7.04%) - over 12 years ago
  • KiwiEMH created a new valuation of $2.23 (undervalued by 11.5%) - almost 13 years ago


Running The Numbers - PGG Wrightson ($PGW.NZ)

This valuation is part of this blog post:


Revenue: Reuters aggregates six analysts covering $PGW.NZ and the mean estimates of 2009 revenues are NZ$1.395 billion. For our analysis we have used NZ$1.335 billion in 2009, NZ$1.375 billion in 2010 and NZ$1.425 billion in 2011.

Profitability: We have used a flat EBITDA margin of 8% to 2011. Reuters has $PGW.NZ‘s EBITD margin at 8.7% last year and an average of 9.1% over the last five-years.

Capital Expenditure: We have assumed capital expenditures of NZ$20.0 million in 2009 then NZ$15.0 million per annum moving forward.

Discount Rate: 8.5%. The PwC New Zealand cost of capital report has $PGW.NZ at a WACC of 7.9% with the wider NZ market at 9.5%.

Terminal Growth Rate: 3.0%.

Our analysis incorporates the cash and debt the $PGW.NZ balance sheet – Valuecruncher calculates a net debt number.

By NZXCrunchBlog, over 12 years ago

The boring details

All amounts in millions Figures
Enterprise Value: 812
Net Debt (Long-term borrowings less cash): 667
Equity Value: 491
Number of Shares Outstanding: 289,000,000
Calculated value per share: $1.96

Enterprise Value is the present value of the post-tax cash flows for a business into the future.

Calcuation of EV


  • C1, C2, C3 - the cash flow in period 1, 2, 3, ...
  • r - the discount rate

To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.



  • Cn - the cash flow in the final forecast period.
  • LTG - the long-term growth rate
  • r - the discount rate
  • g - the terminal growth rate

The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.

CAPM model


  • rt - the risk free rate
  • t - the tax rate
  • B - the beta of the company
  • MRP - the Market Risk Premium

Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.