=get&template=F1001&ASXCodes=apn”>ASX and NZX-listed media company with significant operations in both Australia and New Zealand. The Sir Anthony O'Reilly-controlled Independent News & Media holds a 39.1% stake in $APN.AX. Independent News & Media has recently unsuccessfully tried to exit this stake. The current share price is A$2.01 – the 52-week range has been A$5.55 to A$2.00. How is this in relation to the intrinsic value of the company’s shares?
Valuecruncher produces a valuation of A$1.98 for $APN.AX. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 1.5% below the current share price of A$2.01. All of the figures below are in Australian dollars (A$).
- Revenue: Reuters aggregates nine analysts covering $APN.AX and the mean estimate of 2009 revenues is A$1.35 billion. For our analysis we have used A$1.30 billion in 2009, A$1.31 billion in 2010 and A$1.325 billion in 2011.
- Profitability: We have used an EBITDA margin of 25.0% flat to 2011. Reuters has $APN.AX‘s EBITD margin averaging 25.8% over the last five-years.
- Capital Expenditure: We have assumed capital expenditures of A$75.0 million per annum moving forward.
- Discount Rate: 11.0%. We believe a discount rate in the 10-12% range is appropriate. We have chosen the middle of this range.
- Terminal Growth Rate: 1.0%.
Our analysis incorporates the cash and debt on the $APN.AX balance sheet – Valuecruncher calculates a net debt number.
Play with our assumptions – what does your analysis say?