The valuation compares with a commercial value as at 30 June 2018 of $238.2 million. The key reasons for the increase in commercial value are: X X Core business (up $56.3 million): net increases in the capital base used to determine future pricing, with new capital investment of $55.0 million being offset by depreciation of $22.3 million, and an increase in capitalised leases of $33.2 million. X X Commercial businesses (up $9.9 million): lower risk free rate driving less discounting of future cashflows, as well as an incremental strengthening of future cashflow forecasts. X X Increase in Group external net debt (up $19.9 million): increase in net debt used to fund capital investment. X X Increase in lease liabilities (up $33.2 million): with the adoption of the new leasing standard from 1 July 2019, and the imminent opening of two new leased operational sites, the value of capitalised leases and the corresponding liabilities have increased substantially from the prior year. This has not, however, had any impact on the Group’s equity valuation.
Valuation sensitivity and range
Range
Low
High
Base valuation
$251.3m $251.3m
X X Change in growth factor used in terminal value calculation for commercial business X X Change in commercial business terminal free cash flow
0–2%
–
$8.9m
+/- 10% ($3.3m)
$3.3m
Estimated valuation range
$248.0m $263.5m
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