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Nse Model - Mike Muthengi.xlsm AS
Nairobi Securities Exchange Co. Ltd IPO.
Drivers Page Model. 0.50 0.68 0.65 0.65 0.65 0.71 0.74 0.76 0.78 0.80
In Kes."000", unless stated otherwise
Actuals Projections
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
COMPONENTS OF INCOME
Transaction Levy 91,595 216,795 221,429 248,256 405,777 507,221 634,027 792,533 990,667 1,238,333
% Change 136.7% 2.1% 12.1% 63.5% 25.0% 25.0% 25.0% 25.0% 25.0%
CAGR CAGR 45.1%
Annual Listing Fees 64,460 64,103 70,039 71,179 73,715 76,229 78,829 81,518 84,299 87,174
% Change -0.6% 9.3% 1.6% 3.6% 3.4% 3.4% 3.4% 3.4% 3.4%
CAGR CAGR 3.4%
Initial Listing Fees 7,832 9,443 9,075 7,424 8,651 8,869 9,092 9,321 9,556 9,796
% Change 20.6% -3.9% -18.2% 16.5% 2.5% 2.5% 2.5% 2.5% 2.5%
CAGR CAGR 2.5%
Application and Additional Listing Fees 500 2,454 1,403 3,102 623 1,000 1,000 1,000 1,000 1,000
% Change 390.8% -42.8% 121.1% -79.9%
CAGR CAGR 5.7%
OPERATING INCOME 164,387 292,795 301,946 329,961 488,766 593,319 722,948 884,372 1,085,521 1,336,304
OTHER INCOME 1
Data Vending 6,684 7,504 9,394 13,086 15,843 18,219 20,952 24,095 27,710 31,866
% Change 12.3% 25.2% 39.3% 21.1% 15.0% 15.0% 15.0% 15.0% 15.0%
CAGR CAGR 24.1%
Broker back office subscription 0 0 0 12,360 21,240 25,488 30,586 36,703 44,043 52,852
% Change 71.8% 20.0% 20.0% 20.0% 20.0% 20.0%
Members subscription fee 0 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800
% Change 0.0% 0.0% 0.0%
Rental Income 0 0 0 0 25,755 25,755 25,755 25,755 25,755 25,755
% Change
Sales of publications 345 245 754 1,483 2,318 3,025 3,948 5,152 6,723 8,773
% Change -29.0% 207.8% 96.7% 56.3% 30.5% 30.5% 30.5% 30.5% 30.5%
CAGR CAGR 61.0%
TOTAL 6,684 9,304 11,196 27,247 64,639 71,263 79,093 88,353 99,308 112,273
OTHER INCOME 2
Advertisement fee on NSE journal 614 1,067 1,023 495 453
% Change
Sale of magazine 414 221 38 1 0
% Change
Gain on CDSC shares acquired from DSE 0 0 1,494 0 0
% Change
Provision write back 0 0 640 0 0
% Change
Gain on Sale of Equipment 2,283 0 0 0 0
Nse Model - Mike Muthengi.xlsm AS
% Change
MIscellaneous income 0 2,818 1,397 3,959 2,904
% Change
Private Transfer fee 0 0 0 0 1,006
% Change
Surplus on Revaluation of Investment Property 0 0 0 0 1,208
% Change
Market access fee 0 0 0 0 40,000
% Change
TOTAL 3,311 4,106 4,592 4,455 45,571 52,407 60,268 69,308 79,704 91,660
% Change 24.0% 11.8% -3.0% 922.9% 15.0% 15.0% 15.0% 15.0% 15.0%
CAGR CAGR 92.6%
TOTAL OTHER INCOME 0 9,995 13,410 15,788 31,702 110,210 123,669 139,361 157,661 179,012 203,933
Total Income 328,451 184,529 319,129 338,974 384,329 622,713 716,989 862,309 1,042,034 1,264,533 1,540,236
SG&A Expenses
(239,114) (175,299) (207,562) (239,465) (258,800) (333,838)
+ Amort. 10,672 15,709 12,468 8,857 12,545
+ Dep. 16,380 15,136 14,836 10,024 11,143
(239,114) (148,247) (176,717) (212,161) (239,919) (310,150) (344,155) (413,908) (500,176) (606,976) (739,313)
% of Sales -72.8% -80.3% -55.4% -62.6% -62.4% -49.8% -48.0% -48.0% -48.0% -48.0% -48.0%
Recovery of/Provisions for doutful debts (14,099) (42,623) (300) (675) (100) 115,574 (358) (358) (358) (358) (358)
Share of profit of associate company 9,127 1,639 3,019 6,190 3,479 14,252 10,070 11,734 13,673 15,933 18,565
Total SG&A (244,086) (189,231) (173,998) (206,646) (236,540) (180,324) (334,443) (402,532) (486,861) (591,402) (721,106)
Select a Scenario: Base Case 25.0% 25.0% 25.0% 25.0% 25.0%
Operating Scenarios
Transaction Levy 136.7% 2.1% 12.1% 63.5% 25.0% 25.0% 25.0% 25.0% 25.0%
Best Case 30.0% 30.0% 30.0% 30.0% 30.0%
Base Case 25.0% 25.0% 25.0% 25.0% 25.0%
Weak Case 22.5% 22.5% 22.5% 22.5% 22.5%
Operating Expense Margin -72.8% -80.3% -55.4% -62.6% -62.4% -49.8% 48.0% 48.0% 48.0% 48.0% 48.0%
Best Case 45.0% 45.0% 45.0% 45.0% 45.0%
Base Case 48.0% 48.0% 48.0% 48.0% 48.0%
Weak Case 51.0% 51.0% 51.0% 51.0% 51.0%
Nse Model - Mike Muthengi.xlsm IS
Nairobi Securities Exchange Co. Ltd IPO.
Financial Model. Base Case
In Kes."000", unless stated otherwise
Actuals Projections
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Operating income 310,706 164,387 292,795 301,946 329,961 488,766 593,319 722,948 884,372 1,085,521 1,336,304
Interest income 11,845 9,802 12,679 20,488 21,184 21,420 0 0 0 0 0
Other income 5,900 10,340 13,655 16,540 33,184 112,527 123,669 139,361 157,661 179,012 203,933
TOTAL REVENUE 328,451 184,529 319,129 338,974 384,329 622,713 716,989 862,309 1,042,034 1,264,533 1,540,236
% Change -43.8% 72.9% 6.2% 13.4% 62.0% 15.1% 20.3% 20.8% 21.4% 21.8%
IPO Expenses (40,805)
Selling & General Admin expenses (244,086) (189,231) (173,998) (206,646) (236,540) (180,324) (334,443) (402,532) (486,861) (591,402) (721,106)
EBITDA 84,365 (4,702) 145,131 132,328 147,789 442,389 341,741 459,777 555,172 673,131 819,130
% margin 25.7% -2.5% 45.5% 39.0% 38.5% 71.0% 47.7% 53.3% 53.3% 53.2% 53.2%
Depreciation & Amortisation 0 (27,052) (30,845) (27,304) (18,881) (23,688) (33,366) (41,305) (50,725) (62,027) (75,699)
EBIT 84,365 (31,754) 114,286 105,024 128,908 418,701 308,375 418,472 504,447 611,105 743,431
% margin 25.7% -17.2% 35.8% 31.0% 33.5% 67.2% 43.0% 48.5% 48.4% 48.3% 48.3%
Finance (costs)/income 0 0 0 0 (1,521) (39,360) 30,216 62,699 69,610 79,095 90,468
Profit/(Loss) before tax 84,365 (31,754) 114,286 105,024 127,387 379,341 338,591 481,171 574,057 690,200 833,899
% margin 25.7% -17.2% 35.8% 31.0% 33.1% 60.9% 47.2% 55.8% 55.1% 54.6% 54.1%
Taxation (25,324) (4,050) (35,081) (19,401) (42,606) (117,077) (101,577) (144,351) (172,217) (207,060) (250,170)
Profit/(Loss) for the year 59,041 (35,804) 79,205 85,623 84,781 262,264 237,014 336,820 401,840 483,140 583,729
% margin 18.0% -19.4% 24.8% 25.3% 22.1% 42.1% 33.1% 39.1% 38.6% 38.2% 37.9%
Other comprehensive income 0 0 0 0 0 528 0 0 0 0 0
Total comprehensive income for the year 59,041 -35,804 79,205 85,623 84,781 262,792 237,014 336,820 401,840 483,140 583,729
Eps 0.46 -0.28 0.62 0.67 0.66 2.04 1.22 1.73 2.06 2.48 3.00
Dividends Paid 0 24,500 49,000 94,805 134,728 160,736 193,256 233,492
Existing Shares 128,625 128,625 128,625 128,625 128,625 128,625 194,625 194,625 194,625 194,625 194,625
Dps 0.00 0.19 0.38 0.49 0.69 0.83 0.99 1.20
Dividend cover 3.46 5.36 2.50 2.50 2.50 2.50 2.50
Addition to Retained Earnings 59,041 -35,804 79,205 85,623 60,281 213,792 142,208 202,092 241,104 289,884 350,237
Principal Tax 30%
DPR 0.40 0.25 0.21 0.21 0.19 0.18
58,800 70,560 84,672 93,139 102,453
Nse Model - Mike Muthengi.xlsm BS
Nairobi Securities Exchange Co. Ltd IPO.
Financial Model. Base Case
In Kes."000", unless stated otherwise
Actuals Projections
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
ASSETS
Non current assets
Equipment 41,887 32,911 18,210 26,597 161,054 194,162 227,861 268,834 318,859 380,144 455,439
Investment property 0 242,485 294,628 294,628 294,628 294,628 294,628 294,628
Intangible assets 37,509 41,549 26,118 61,783 79,947 106,904 141,887 182,341 229,903 286,570 354,796
Investment in associate company 28,367 30,006 33,025 43,209 46,688 60,940 71,010 82,744 96,418 112,350 130,916
Corporate bonds held to maturity 35,276 35,507 35,509 35,509 35,509 35,509 35,509 35,509 35,509
Government securities held to maturity 157,208 157,537 157,445 156,889 156,889 156,889 156,889 156,889 156,889
Deferred taxation asset 4,142 19,573 16,221 15,148 15,148 15,148 15,148 15,148 15,148
107,763 104,466 273,979 344,206 739,349 864,180 942,932 1,036,093 1,147,353 1,281,238 1,443,325
Current assets
Trade and other receivables 87,497 36,292 48,261 45,658 49,284 114,908 122,809 147,701 178,485 216,595 263,819
Tax recoverable 20,918 16,593 0 11,978 14,485 0 0 0 0 0 0
Government securities 105,000 34,554 0 0 0 0 0 0 0 0 0
Term deposits 69,064 0 60,994 35,026 135,744 135,744 135,744 135,744 135,744 135,744
Bank and cash balances 18,698 42,002 80,813 12,483 44,546 34,304 458,678 526,422 639,344 774,417 936,665
232,113 198,505 129,074 131,113 143,341 284,956 717,231 809,866 953,573 1,126,756 1,336,228
TOTAL ASSETS 339,876 302,971 403,053 475,319 882,690 1,149,136 1,660,164 1,845,960 2,100,926 2,407,995 2,779,553
Nse Model - Mike Muthengi.xlsm BS
MEMBERS’ FUNDS AND LIABILITIES
Members’ funds and reserves
Share capital 0 0 0 2 24,500 24,500 778,500 778,500 778,500 778,500 778,500
Members’ fund 22,240 22,240 22,240 22,240 0 0 0 0 0 0 0
Retained earnings 278,471 242,667 321,872 407,495 468,018 705,782 357,990 560,082 801,186 1,091,070 1,441,307
Revaluation reserve 0 0 528 528 528 528 528 528
Share Premium 0 0 0 0 0 0 363,000 363,000 363,000 363,000 363,000
300,711 264,907 344,112 429,737 492,518 730,810 1,500,018 1,702,110 1,943,214 2,233,098 2,583,335
Non current liabilities
Deferred tax liability 2,462 732 0 0 0 0 0 0 0 0 0
LT Borrowings 0 0 0 0 285,982 128,060 0 0 0 0 0
Tenant deposits 0 0 0 0 0 8,220 8,220 8,220 8,220 8,220 8,220
2,462 732 0 0 285,982 136,280 8,220 8,220 8,220 8,220 8,220
Current liabilities
Current Borrowings 0 0 0 0 15,539 36,568 0 0 0 0 0
Trade and other payables 36,703 37,332 37,345 45,582 66,651 170,968 82,465 66,170 80,032 97,217 118,538
Tax payable 21,596 0 0 69,460 69,460 69,460 69,460 69,460 69,460
Dividends payable 0 22,000 5,050 0 0 0 0 0
36,703 37,332 58,941 45,582 104,190 282,046 151,925 135,630 149,492 166,677 187,998
TOTAL MEMBERS’ FUNDS AND LIABILITIES 339,876 302,971 403,053 475,319 882,690 1,149,136 1,660,164 1,845,960 2,100,926 2,407,995 2,779,553
Checks ok ok ok ok ok ok ok ok ok ok ok
Nse Model - Mike Muthengi.xlsm BS
TOTAL REVENUE 328,451 184,529 319,129 338,974 384,329 622,713 716,989 862,309 1,042,034 1,264,533 1,540,236
SG&A (244,086) (189,231) (173,998) (206,646) (236,540) (180,324) (334,443) (402,532) (486,861) (591,402) (721,106)
Equipment Schedule
Beginning Balance 41,887 32,911 18,210 26,597 161,054 194,162 227,861 268,834 318,859 380,144
Add: Capital Expenditure 7,404 435 23,223 144,481 44,251 50,950 61,277 74,049 89,860 109,452
Less: Depreciation 0 (16,380) (15,136) (14,836) (10,024) (11,143) (17,252) (20,304) (24,024) (28,574) (34,157)
Ending balance 41,887 32,911 18,210 26,597 161,054 194,162 227,861 268,834 318,859 380,144 455,439
Capex as % of sales 4.0% 0.1% 6.9% 37.6% 7.1% 7.1% 7.1% 7.1% 7.1% 7.1%
Depreciation - % of assets 35.9% 45.7% 49.7% 10.1% 6.1% 7.9% 7.9% 7.9% 7.9% 7.9%
Investment property 0 0 0 0 242,485 294,628 294,628 294,628 294,628 294,628 294,628
Change 0 0 0 0 242,485 52,143 0 0 0 0 0
Intangible assets
Beginning Balance 37,509 41,549 26,118 61,783 79,947 106,904 141,887 182,341 229,903 286,570
Add: Intangibe Asset Expenditure 14,712 278 48,133 27,021 39,502 51,098 61,454 74,263 90,120 109,769
Less: Amortisation 0 (10,672) (15,709) (12,468) (8,857) (12,545) (16,115) (21,001) (26,702) (33,453) (41,542)
Ending balance 37,509 41,549 26,118 61,783 79,947 106,904 141,887 182,341 229,903 286,570 354,796
Intangible assets expenditure as % of sales 8.0% 0.1% 14.2% 7.0% 6.3% 7.1% 7.1% 7.1% 7.1% 7.1%
Amortisation - % of assets 23.8% 37.7% 24.8% 11.8% 12.6% 12.2% 12.2% 12.2% 12.2% 12.2%
Investment in associate company 28,367 30,006 33,025 43,209 46,688 60,940 71,010 82,744 96,418 112,350 130,916
Share of Profit of Associate company 28,367 1,639 3,019 10,184 3,479 14,252 10,070 11,734 13,673 15,933 18,565
% CAGR 16.5%
Corporate bonds held to maturity 0 0 35,276 35,507 35,509 35,509 35,509 35,509 35,509 35,509 35,509
∆ 0 0 35,276 231 2 0 0 0 0 0 0
Interest Income (a) 2,879 2,879 2,879 2,879 2,879
Government securities held to maturity 0 0 157,208 157,537 157,445 156,889 156,889 156,889 156,889 156,889 156,889
∆ 0 0 157,208 329 -92 -556 0 0 0 0 0
Interest Income (b) 11,767 11,767 11,767 11,767 11,767
Deferred taxation asset 0 0 4,142 19,573 16,221 15,148 15,148 15,148 15,148 15,148 15,148
∆ 0 0 4,142 15,431 -3,352 -1,073 0 0 0 0 0
Nse Model - Mike Muthengi.xlsm BS
Days per year 365 days
Current assets
Trade and other receivables 87,497 36,292 48,261 45,658 49,284 114,908 122,809 147,701 178,485 216,595 263,819
Receivable days 97.23 days 71.79 days 55.20 days 49.16 days 46.81 days 67.35 days 62.52 days 62.52 days 62.52 days 62.52 days 62.52 days
Tax recoverable 20,918 16,593 0 11,978 14,485 0 0 0 0 0 0
CA 108,415 52,885 48,261 57,636 63,769 114,908 122,809 147,701 178,485 216,595 263,819
Government securities 105,000 34,554 0 0 0 0 0 0 0 0 0
∆ in Government securities 105,000 -70,446 -34,554 0 0 0 0 0 0 0 0
Average Balance 105,000 69,777 17,277 0 0 0 0 0 0 0 0
Govt Sec. int. rate 7.62% 7.84% 8.00% 8.00% 8.00% 8.00% 8.00%
Interest Income (c) 0 0 0 0 0
Term deposits 0 69,064 0 60,994 35,026 135,744 135,744 135,744 135,744 135,744 135,744
∆ in Term Deposits 0 69,064 -69,064 60,994 -25,968 100,718 0 0 0 0 0
Average Balance 0 34,532 34,532 30,497 48,010 85,385 135,744 135,744 135,744 135,744 135,744
Term deposit int. rate 8.0% 7.3% 7.6% 7.6% 7.6% 7.6% 7.6%
Interest Income (d) 3,841 6,233 10,374 10,374 10,374 10,374 10,374
Current liabilities
Trade and other payables 36,703 37,332 37,345 45,582 66,651 170,968 82,465 66,170 80,032 97,217 118,538
Payable Days 54.9 days 72.0 days 78.3 days 80.5 days 102.8 days 346.1 days 90.0 days 60.0 days 60.0 days 60.0 days 60.0 days
Tax payable 0 0 21,596 0 0 69,460 69,460 69,460 69,460 69,460 69,460
Dividends payable 0 0 0 0 22,000 5,050 0 0 0 0 0
CL 36,703 37,332 58,941 45,582 88,651 245,478 151,925 135,630 149,492 166,677 187,998
Working capital 71,712 15,553 (10,680) 12,054 (24,882) (130,570) (29,116) 12,071 28,993 49,919 75,821
∆ in NWC 71,712 (56,159) (26,233) 22,734 (36,936) (105,688) 101,454 41,187 16,922 20,926 25,902
Current Borrowings 0 0 0 0 15,539 36,568 0 0 0 0 0
Nse Model - Mike Muthengi.xlsm BS
Non current liabilities
Deferred tax liability 2,462 732 0 0 0 0 0 0 0 0 0
LT Borrowings 0 0 0 0 285,982 128,060 0 0 0 0 0
Total borrowings 0 0 0 0 301,521 164,628 0 0 0 0 0
∆ in Borrowings 0 0 0 0 301,521 (136,893) (164,628) 0 0 0 0
% of Current borrowing 5.15% 22.21% 15.00% 15.00% 15.00% 15.00% 15.00%
Int. expense on LT Debt (1) 13,660 0 0 0 0
Tenant deposits 0 0 0 0 0 8,220 8,220 8,220 8,220 8,220 8,220
Members’ funds and reserves
Share capital
Beginning Balance 0 0 0 0 2 24,500 24,500 778,500 778,500 778,500 778,500
+ Transfer from Retained Earnings 2,500 490,000 0 0 0 0
+ Issue of share capital 2 264,000
+ Bonus issue of shares 21,998
Ending Balance 0 0 0 2 24,500 24,500 778,500 778,500 778,500 778,500 778,500
Members’ fund
Beginning Balance 22,240 22,240 22,240 22,240 22,240 0 0 0 0 0 0
- Bonus issue of shares (21,998)
- Member's fund transferred (242)
Ending Balance 22,240 22,240 22,240 22,240 0 0 0 0 0 0 0
∆ in Member funds 22,240 0 0 0 -22,240 0 0 0 0 0 0
Retained earnings
Beginning Balance 278,471 242,667 321,872 407,495 468,018 705,782 357,990 560,082 801,186 1,091,070
+Profit/(Loss) for the year 59,041 -35,804 79,205 85,623 84,781 262,264 237,014 336,820 401,840 483,140 583,729
+ Member's fund transferred 242
- Transfer from Share capital (2,500) (490,000)
Dividends (22,000) (24,500) (94,805) (134,728) (160,736) (193,256) (233,492)
Ending Balance 278,471 242,667 321,872 407,495 468,018 705,782 357,990 560,082 801,186 1,091,070 1,441,307
Revaluation reserve 0 0 0 0 0 528 528 528 528 528 528
∆ in Revaluation reserve 0 0 0 0 0 528 0 0 0 0 0
Share Premium 0 0 0 0 0 0 363,000 363,000 363,000 363,000 363,000
∆ in Share premium 0 0 0 0 0 0 363,000 0 0 0 0
Nse Model - Mike Muthengi.xlsm BS
Bank and cash balances
Ending Balance 18,698 42,002 80,813 12,483 44,546 34,304 458,678 526,422 639,344 774,417 936,665
Average Balance 30,350 61,408 46,648 28,515 39,425 246,491 492,550 582,883 706,881 855,541
Cash Int. rate 8.0% 7.3% 7.7% 7.7% 7.7% 7.7% 7.7%
Interest Income (e) 2,878 18,857 37,680 44,591 54,076 65,449
Interest income 11,845 9,802 10,229 18,027 21,274 20,526 43,876 62,699 69,610 79,095 90,468
Interest expense 0 0 0 0 0 -40,207 -13,660 0 0 0 0
Net interest 11,845 9,802 10,229 18,027 21,274 -19,681 30,216 62,699 69,610 79,095 90,468
Nse Model - Mike Muthengi.xlsm CF
Nairobi Securities Exchange Co. Ltd IPO.
Financial Model. Base Case
In Kes."000", unless stated otherwise
Actuals Projections
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Cash flows from operating activities
Profit/(Loss) before tax 84,365 (31,754) 114,286 105,024 127,387 379,341 338,591 481,171 574,057 690,200 833,899
+ Depreciation 16,380 15,136 14,836 10,024 11,143 17,252 20,304 24,024 28,574 34,157
+ Amortisation 10,672 15,709 12,468 8,857 12,545 16,115 21,001 26,702 33,453 41,542
- Share of Associate company profits (28,367) (1,639) (3,019) (10,184) (3,479) (14,252) (10,070) (11,734) (13,673) (15,933) (18,565)
- ∆ in NWC (71,712) 56,159 26,233 (22,734) 36,936 105,688 (101,454) (41,187) (16,922) (20,926) (25,902)
Cash generated from operations 49,591 33,408 117,477 114,392 140,625 457,253
Tax paid (39,155) (1,455) (1,766) (68,399) (41,761) (32,286) (101,577) (144,351) (172,217) (207,060) (250,170)
Net cash generated from operating activities 10,436 31,953 115,711 45,993 98,864 424,967 158,856 325,203 421,970 508,308 614,960
Cash flows from investing activities
Purchase of equipment (4,778) (7,921) (435) (23,223) (144,537) (99,346) (50,950) (61,277) (74,049) (89,860) (109,452)
Purchase of investment property 0 0 0 0 (242,485) 0 0 0 0 0 0
Purchase of computer software (16,927) (14,712) (278) (48,133) (27,021) (39,501) (51,098) (61,454) (74,263) (90,120) (109,769)
Proceeds from disposal of equipment 0 2,800 0 0 0 1,533 0 0 0 0 0
Net proceeds from maturing government securities/(Purchase) 0 60,000 (155,034) 0 0 0 0 0 0 0 0
Sale/(Purchase) of corporate bonds (35,000) 0 0 0 0 0 0 0 0
Interest received 11,845 9,802 10,229 18,027 21,274 20,526
Net cash generated from/(used in) investing activities (9,860) 49,969 (180,518) (53,329) (392,769) (116,788) (102,048) (122,732) (148,312) (179,980) (219,220)
Cash used in financing activities
Borrowings received/(paid) 300,000 (136,046) (164,628) 0 0 0 0
Interest paid on borrowings (40,207)
Dividends paid (41,450) (94,805) (134,728) (160,736) (193,256) (233,492)
Increase/decease in Term Deposit 0 0 0 0 0
Increase/decease in Government securities 0 0 0 0 0
Issue/(Redemption) of share capital 264,000 0 0 0 0
Increase/(decrease) in share premium 363,000 0 0 0 0
Net movement in market stabilization fund (85,052) 0 0 0 0 0 0 0 0 0 0
Increase/(decrease) in member's funds 0 0 0 0 0
(85,052) 0 0 0 300,000 (217,703) 367,567 (134,728) (160,736) (193,256) (233,492)
Cash and cash equivalents at the beginning of the year 148,174 63,698 145,620 80,813 73,477 79,572 170,048 594,422 662,166 775,088 910,161
Net increase (decrease) in cash (84,476) 81,922 (64,807) (7,336) 6,095 90,476 424,374 67,744 112,923 135,072 162,249
Cash and cash equivalents at the end of the year 63,698 145,620 80,813 73,477 79,572 170,048 594,422 662,166 775,088 910,161 1,072,409
Checks -60,000 ok ok ok ok ok ok ok ok ok ok
Nse Model - Mike Muthengi.xlsm SCHEDULES
a Interest Only Loans (Corporate Bonds):
Borrow = PV = 35,509 2010 2011 2012 2013
i = 8.11% 8.10% 8.10% 8.13% 8.10%
n = 2
x = 5
nx= 10
Semiannual Interest = 1,439
Time Interest Paid Principal Paid
0
1 1,439 Interest per year 2,879
2 1,439 2014
3 1,439
4 1,439 2015
5 1,439
6 1,439 2016
7 1,439
8 1,439 2017
9 1,439
10 1,439 35,509.00 2018
Nse Model - Mike Muthengi.xlsm SCHEDULES
b
Interest Only Loans (Government securities held to maturity):
Borrow = PV = 156,889 2010 2011 2012
i = 7.50% 3.70% 8.00% 7.50%
n = 2
x = 10
nx= 20
Semiannual Interest = 5,883
Time Interest Paid Principal Paid
0
1 5,883 Interest per year 11,767
2 5,883 2014
3 5,883
4 5,883 2015
5 5,883
6 5,883 2016
7 5,883
8 5,883 2017
9 5,883
10 5,883 2018
11 5,883
12 5,883
13 5,883
14 5,883
15 5,883
16 5,883
17 5,883
18 5,883
19 5,883
20 5,883 156,889.00
cLoan 164,628.00S
Annual rate 15.00%
Nse Model - Mike Muthengi.xlsm SCHEDULES
Periodic Rate 1.25%
Years 3.75
Payment periods per
year 12
Total Periods 45
PMT (S4,805.51)
Periods PMT Interest Principal Reduction Loan Balance
Extra
Paymnet
0 164,628.00S 2014 2015 2016 2017
1 4,805.51 2,057.85 22,747.66 141,880.34 20,000 Loan 0 0 0 0
2 4,805.51 1,773.50 3,032.01 138,848.33 Interest 13,660 0 0 0
3 4,805.51 1,735.60 3,069.91 135,778.43
4 4,805.51 1,697.23 3,108.28 132,670.15
5 4,805.51 1,658.38 3,147.13 129,523.01
6 4,805.51 1,619.04 3,186.47 126,336.54
7 4,805.51 1,579.21 3,226.30 123,110.23
8 4,805.51 1,538.88 123,110.23 0.00 119843.6
9 0.00 0.00 0.00 0.00
10 0.00 0.00 0.00 0.00
11 0.00 0.00 0.00 0.00
12 0.00 0.00 0.00 0.00 2014
13 0.00 0.00 0.00 0.00
14 0.00 0.00 0.00 0.00
15 0.00 0.00 0.00 0.00
16 0.00 0.00 0.00 0.00
17 0.00 0.00 0.00 0.00
18 0.00 0.00 0.00 0.00
19 0.00 0.00 0.00 0.00
20 0.00 0.00 0.00 0.00
21 0.00 0.00 0.00 0.00
22 0.00 0.00 0.00 0.00
23 0.00 0.00 0.00 0.00
24 0.00 0.00 0.00 0.00 2015
25 0.00 0.00 0.00 0.00
26 0.00 0.00 0.00 0.00
27 0.00 0.00 0.00 0.00
28 0.00 0.00 0.00 0.00
29 0.00 0.00 0.00 0.00
30 0.00 0.00 0.00 0.00
31 0.00 0.00 0.00 0.00
32 0.00 0.00 0.00 0.00
Nse Model - Mike Muthengi.xlsm SCHEDULES
33 0.00 0.00 0.00 0.00
34 0.00 0.00 0.00 0.00
35 0.00 0.00 0.00 0.00
36 0.00 0.00 0.00 0.00 2016
37 0.00 0.00 0.00 0.00
38 0.00 0.00 0.00 0.00
39 0.00 0.00 0.00 0.00
40 0.00 0.00 0.00 0.00
41 0.00 0.00 0.00 0.00
42 0.00 0.00 0.00 0.00
43 0.00 0.00 0.00 0.00
44 0.00 0.00 0.00 0.00
45 0.00 0.00 0.00 0.00 2017
d
Nse Model - Mike Muthengi.xlsm RV
Nairobi Securities Exchange Co. Ltd IPO. Base Case
Comparative Analysis (Relative Valuation).
In Kes."000", unless stated otherwise
Actuals Projections
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Assumptions
Price /earning multiple 15.0x
Enterprise value / EBITDA 8.0x
# of Shares 194,625
Cost of Capital 20.0%
Net Income 237,014 336,820 401,840 483,140 583,729
P/E multiple 15.0x 15.0x 15.0x 15.0x 15.0x
Implied Equity (market )value 3,555,204 5,052,295 6,027,594 7,247,103 8,755,936
# of shares outstanding 194,625 194,625 194,625 194,625 194,625
Implied price per share 18.27 25.96 30.97 37.24 44.99
Present value of price per share S15.22 S18.03 S17.92 S17.96 S18.08
Enterprise Value Multiple
EBITDA 341,741 459,777 555,172 673,131 819,130
EV/EBITDA multiple 8.0x 8.0x 8.0x 8.0x 8.0x
Implied Enterprise Value 2,733,928 3,678,212 4,441,378 5,385,052 6,553,040
Add: Cash & Marketable Securities 594,422 662,166 775,088 910,161 1,072,409
Add: Diversified portfolio of C. Stocks & Bonds 192,398 192,398 192,398 192,398 192,398
Enterprise Value 3,520,748 4,532,776 5,408,865 6,487,611 7,817,847
Less: Market value of debt & liabilities obligations 0 0 0 0 0
Implied Equity Value 3,520,748 4,532,776 5,408,865 6,487,611 7,817,847
# of shares outstanding 194,625 194,625 194,625 194,625 194,625
Implied price per share 18.09 23.29 27.79 33.33 40.17
Nse Model - Mike Muthengi.xlsm RV
Present value of price per share S15.07 S16.17 S16.08 S16.08 S16.14
Price Earnings to growth ratio
Eps 2.04 1.22 1.73 2.06 2.48 3.00
Eps growth rate -40.4% 42.1% 19.3% 20.2% 20.8%
P/E Ratio 0.15
Earnings growth rate 25.6%
PEG 0.59
Nse Model - Mike Muthengi.xlsm DCF
Nairobi Securities Exchange Co. Ltd IPO. Base Case
DCF
In Kes."000", unless stated otherwise
Actuals Projections
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Assumptions
Risk free rate 8.00%
Beta,β 1
Risk Premium 11.8%
Cost of Debt 15.00%
After tax cost of debt 10.50%
Outstanding number of shares 194,625
Current share price S 9.5
Market Value of Debt 164,628
Tax rate 30.0%
Market Value of Debt S 164,628
Market value of Equity S 1,848,938
Weight of Debt 8%
Weight of Equity 92%
Equity Return, RE 19.8%
WACC, RA 19.0%
Cost of Capital 15.0%
Perpetual growth rate 8.0%
INCOME STATEMENT SUMMARY
Revenues 716,989 862,309 1,042,034 1,264,533 1,540,236
%growth 20.27% 20.84% 21.35% 21.80%
EBITDA 341,741 459,777 555,172 673,131 819,130
% margin 47.66% 53.32% 53.28% 53.23% 53.18%
D&A (33,366) (41,305) (50,725) (62,027) (75,699)
EBIT 308,375 418,472 504,447 611,105 743,431
% margin 43.01% 48.53% 48.41% 48.33% 48.27%
Taxation (101,577) (144,351) (172,217) (207,060) (250,170)
Unlevered Net Income(EBIAT) 206,798 274,121 332,230 404,045 493,261
% margin 28.84% 31.79% 31.88% 31.95% 32.03%
Free Cash Flow to the Firm
Unlevered Net Income(EBIAT) 206,798 274,121 332,230 404,045 493,261
Add: D&A 33,366 41,305 50,725 62,027 75,699
Less: CapEx (102,048) (122,732) (148,312) (179,980) (219,220)
Less: NWC (101,454) (41,187) (16,922) (20,926) (25,902)
Other 0 0 0 0 0
Unleavered FCFF 36,661 151,507 217,722 265,166 323,838
Terminal Value 4,996,352
Net cash flows 36,661 151,507 217,722 265,166 5,320,190
Net Present Value $3,086,280
Cash & Marketable Securities 170,048
Diversified portfolio of C. Stocks & Bonds 192,398
Value of Non-operating Assets S362,446
Total Firm value S3,448,726
Less: Market value of debt obligations (164,628)
Equity value S3,284,098
# of shares outstanding 194,625
Implied price per share S 16.87
Nse Model - Mike Muthengi.xlsm DCF
Sensitivity analysis: Implied Price per share
Weighted average cost of capital
S16.87 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% 23.0%
4.0% S 14.74 S 13.19 S 11.93 S 10.88 S 10.00 S 9.25 S 8.60 S 8.03 S 7.54 S 7.10 S 6.71
4.5% S 15.41 S 13.71 S 12.34 S 11.22 S 10.28 S 9.48 S 8.79 S 8.20 S 7.68 S 7.22 S 6.81
5.0% S 16.16 S 14.29 S 12.80 S 11.58 S 10.57 S 9.72 S 8.99 S 8.37 S 7.82 S 7.34 S 6.92
5.5% S 17.01 S 14.93 S 13.30 S 11.98 S 10.89 S 9.98 S 9.21 S 8.55 S 7.98 S 7.48 S 7.03
6.0% S 17.98 S 15.66 S 13.85 S 12.42 S 11.24 S 10.27 S 9.45 S 8.75 S 8.15 S 7.62 S 7.16
6.5% S 19.10 S 16.48 S 14.48 S 12.90 S 11.63 S 10.58 S 9.71 S 8.96 S 8.32 S 7.77 S 7.29
7.0% S 20.41 S 17.42 S 15.18 S 13.44 S 12.05 S 10.92 S 9.98 S 9.19 S 8.52 S 7.93 S 7.42
7.5% S 21.96 S 18.50 S 15.97 S 14.04 S 12.52 S 11.29 S 10.28 S 9.44 S 8.72 S 8.10 S 7.57
8.0% S 23.81 S 19.76 S 16.87 S 14.71 S 13.04 S 11.70 S 10.61 S 9.71 S 8.94 S 8.29 S 7.73
8.5% S 26.08 S 21.25 S 17.92 S 15.48 S 13.62 S 12.15 S 10.97 S 10.00 S 9.18 S 8.49 S 7.89
9.0% S 28.92 S 23.05 S 19.14 S 16.35 S 14.27 S 12.65 S 11.37 S 10.31 S 9.44 S 8.70 S 8.07
9.5% S 32.56 S 25.23 S 20.58 S 17.36 S 15.01 S 13.22 S 11.80 S 10.66 S 9.72 S 8.93 S 8.27
10.0% S 37.42 S 27.97 S 22.31 S 18.54 S 15.86 S 13.85 S 12.29 S 11.04 S 10.03 S 9.18 S 8.47
10.5% S 44.22 S 31.49 S 24.42 S 19.93 S 16.83 S 14.56 S 12.83 S 11.46 S 10.36 S 9.46 S 8.70
11.0% S 54.43 S 36.18 S 27.07 S 21.61 S 17.97 S 15.38 S 13.44 S 11.93 S 10.73 S 9.75 S 8.94
11.5% S 71.44 S 42.75 S 30.46 S 23.65 S 19.32 S 16.32 S 14.13 S 12.46 S 11.14 S 10.08 S 9.20
12.0% S 105.45 S 52.60 S 34.99 S 26.20 S 20.93 S 17.42 S 14.92 S 13.05 S 11.60 S 10.44 S 9.49
Sensitivity analysis: Implied Equity value
Weighted average cost of capital
S3,284,098 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% 23.0%
4.0% 2,869,278 2,567,891 2,322,253 2,118,389 1,946,629 1,800,063 1,673,629 1,563,529 1,466,861 1,381,368 1,305,270
4.5% 2,999,092 2,668,806 2,402,406 2,183,191 1,999,803 1,844,252 1,710,753 1,595,015 1,493,790 1,404,571 1,325,395
5.0% 3,145,133 2,780,933 2,490,576 2,253,884 2,057,408 1,891,839 1,750,528 1,628,600 1,522,402 1,429,139 1,346,639
5.5% 3,310,646 2,906,252 2,588,026 2,331,309 2,120,023 1,943,233 1,793,249 1,664,502 1,552,860 1,455,196 1,369,097
6.0% 3,499,804 3,047,236 2,696,304 2,416,477 2,188,329 1,998,911 1,839,257 1,702,968 1,585,349 1,482,882 1,392,876
6.5% 3,718,063 3,207,017 2,817,320 2,510,610 2,263,142 2,059,429 1,888,946 1,744,283 1,620,078 1,512,353 1,418,096
7.0% 3,972,699 3,389,625 2,953,464 2,615,202 2,345,435 2,125,450 1,942,775 1,788,776 1,657,288 1,543,790 1,444,892
7.5% 4,273,631 3,600,326 3,107,760 2,732,100 2,436,391 2,197,758 2,001,285 1,836,829 1,697,255 1,577,395 1,473,417
8.0% 4,634,751 3,846,143 3,284,098 2,863,609 2,537,453 2,277,297 2,065,114 1,888,887 1,740,295 1,613,400 1,503,843
8.5% 5,076,119 4,136,655 3,487,565 3,012,653 2,650,404 2,365,209 2,135,022 1,945,470 1,786,779 1,652,071 1,536,369
9.0% 5,627,829 4,485,270 3,724,944 3,182,989 2,777,475 2,462,888 2,211,921 2,007,198 1,837,137 1,693,718 1,571,217
9.5% 6,337,171 4,911,354 4,005,482 3,379,530 2,921,488 2,572,059 2,296,915 2,074,805 1,891,873 1,738,697 1,608,646
10.0% 7,282,960 5,443,959 4,342,128 3,608,828 3,086,075 2,694,877 2,391,352 2,149,173 1,951,586 1,787,423 1,648,955
10.5% 8,607,065 6,128,737 4,753,584 3,879,817 3,275,982 2,834,070 2,496,900 2,231,368 2,016,985 1,840,387 1,692,489
11.0% 10,593,221 7,041,775 5,267,904 4,205,004 3,497,541 2,993,148 2,615,641 2,322,697 2,088,924 1,898,166 1,739,650
11.5% 13,903,483 8,320,027 5,929,173 4,602,454 3,759,384 3,176,699 2,750,214 2,424,770 2,168,436 1,961,447 1,790,912
12.0% 20,524,006 10,237,406 6,810,864 5,099,267 4,073,595 3,390,843 2,904,011 2,539,602 2,256,783 2,031,057 1,846,835
Perp
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Nairobi Securities Exchange Co. Ltd IPO. Base Case
Dividend Discount Model
In Kes."000", unless stated otherwise
Actuals Projections
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Assumptions
current stock price 9.5
dividend of next year 0.49
dividend yield 5.1%
Perpetual growth rate, g 9.4%
Implied return=RRR 14.5%
INCOME STATEMENT SUMMARY
Revenues 716,989 862,309 1,042,034 1,264,533 1,540,236
%growth -26.7% 18.4% 15.4% 8.1%
EBITDA 341,741 459,777 555,172 673,131 819,130
% margin 47.7% 53.3% 53.3% 53.2% 53.2%
D&A (33,366) (41,305) (50,725) (62,027) (75,699)
EBIT 308,375 418,472 504,447 611,105 743,431
% margin 43.0% 48.5% 48.4% 48.3% 48.3%
Finance (costs)/income 30,216 62,699 69,610 79,095 90,468
Profit/(Loss) before tax 338,591 481,171 574,057 690,200 833,899
% margin 47.2% 55.8% 55.1% 54.6% 54.1%
Taxation (101,577) (144,351) (172,217) (207,060) (250,170)
Profit/(Loss) for the year 237,014 336,820 401,840 483,140 583,729
% margin 33.1% 39.1% 38.6% 38.2% 37.9%
Total comprehensive income for the year 237,014 336,820 401,840 483,140 583,729
Dividends 49,000 94,805 134,728 160,736 193,256 233,492
Dividend growth rate #DIV/0! -160.6% -321.2% 8.1% -1.0%
Terminal Value, Pt 4,553,657
Net cash flows 94,805 134,728 160,736 193,256 4,787,148
Net Present Value S2,780,553
Cash & Marketable Securities 170,048
Diversified portfolio of C. Stocks & Bonds 192,398
Total Value S3,142,999.1
# of shares outstanding 194,625
Implied price per share S 16.15