nse model - mike muthengi

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


Financial Model. Base Case


Actuals Projections


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




Actuals Projections


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


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


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


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


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


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




Actuals Projections


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


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%


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


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).


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


DCF


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

gro

wth

Perp

gro

wth


Dividend Discount Model


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

nse model - mike muthengi

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