Yell Group plc (YELL)

Discount cash flow analysis

Buy Undervalued by Infinity%

5% margin of safety What's this?

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How does this work?

This is an interactive analyst report for Yell Group plc, 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.

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Values in £ millions
2009 2010 2011 2012 2013 2014 2015 2016
 
                 
               
 

What will the revenues be in the future?

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

Sensitivity matrix

   
-1%
Discount Rate %
0%

1%
  -1% £0.34 £0.27 £0.20
Terminal Growth% 0 £0.35 £0.28 £0.21
  +1% £0.36 £0.29 £0.22

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 £0.00 (undervalued by NaN%) - 1 year ago
  • GordonGekko created a new valuation of £0.38 (overvalued by 5.0%) - over 7 years ago
  • GordonGekko created a new valuation of £0.28 (overvalued by 3.45%) - over 8 years ago
  • GordonGekko created a new valuation of £0.13 (overvalued by 7.14%) - over 8 years ago
  • GordonGekko created a new valuation of £0.20 (undervalued by 25.0%) - over 8 years ago
  • GordonGekko created a new valuation of £0.35 (overvalued by 5.41%) - almost 9 years ago

Comments

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The boring details

All amounts in millions Figures
Enterprise Value: 4,348
Net Debt (Long-term borrowings less cash): 4,348
Equity Value: 227
Number of Shares Outstanding: 785,000,000
Calculated value per share: £0.28

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


Calcuation of EV

Where:

  • 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.


Perpetuity

Where:

  • 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

Where:

  • 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.