REVENUE ANALYSIS

all numbers are in millions

2012 2013 2014 2015 2016 2017

Cheese 229.60 231.30 264.60 267.78 270.99 274.24

Spreads 211.30 194.50 177.40 176.42 175.45 174.49
Milk 1,069.00 951.60 944.80 937.24 929.74 922.31
Other 4.80 4.20 4.20 4.20 4.20 4.20
Total Revenue 1,514.70 1,381.60 1,391.00 1,385.64 1,380.39 1,375.24

Cheese YoY growth 0.7% 14.4% 1.20% 1.20% 1.20%

Spreads YoY growth -8.0% -8.8% -0.55% -0.55% -0.55%
Milk YoY growth -11.0% -0.7% -0.80% -0.80% -0.80%
other Yoy Growth -12.5% 0.0% 0% 0% 0%

Analyst's Estimates

2012 2013 2014 2015 2016 2017

Total Revenue 1,514.70 1,381.60 1,391.00 1372.917 1389.392 1406.06471

Growth YoY -8.8% 0.7% (1.3%) 1.2% 1.2%

2012 2013 2014 2015 2016 2017

Revenue 1,379.28 1,384.89 1,390.65

UE ANALYSIS

2018 2019 2020 2021 2022 2023 2024

277.53 280.86 284.23 287.64 291.09 294.59 298.12

173.53 172.57 171.63 170.68 169.74 168.81 167.88
914.93 916.76 918.59 920.43 922.27 924.11 925.96
4.20 4.20 4.20 4.20 4.20 4.20 4.20
1,370.19 1,374.39 1,378.65 1,382.95 1,387.31 1,391.71 1,396.17

1.20% 1.20% 1.20% 1.20% 1.20% 1.20% 1.20%

-0.55% -0.55% -0.55% -0.55% -0.55% -0.55% -0.55%
-0.80% 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%
0% 0% 0% 0% 0% 0% 0%

2018 2019 2020 2021 2022 2023 2024

1422.93748 1440.01273 1454.41286 1468.95699 1483.64656 1498.48303 1513.46786

1.2% 1.2% 1.0% 1.0% 1.0% 1.0% 1.0%

2018 2019 2020 2021 2022 2023 2024

1,396.56 1,407.20 1,416.53 1,425.95 1,435.48 1,445.10 1,454.82

 INCOME STATEMENT
All numbers are in millions of £
2019 2020 2021 2022 2023

Revenue 1,514.70 1,381.60 1,391.00 1,379.28 1,384.89

Cost of goods sold (exc. D&A) 1,063.30 972.40 1,008.10 979.54 983.52
Gross profit 451.40 409.20 382.90 399.74 401.37
Gross Profit Margin 30% 30% 28% 29.0% 29.0%
Ditribution costs 259.00 229.10 207.80 206.05 206.89
Administrative costs 85.70 84.00 86.50 85.77 86.12
EBITDA 106.70 96.10 88.60 107.92 108.36
EBITDA margin 7% 7% 6% 7.8% 7.8%
D&A 43.20 35.80 32.30 41.31 42.10
EBIT 63.50 60.30 56.30 66.61 66.27
EBIT margin 4% 4% 4% 4.8% 4.8%
Finance costs 21.10 18.70 9.90 9.85 9.66
Other Income 4.30 7.70 18.50
Other finance income (pensions) 5.50 - 3.50 - 0.30
EBT 52.20 45.80 64.60 56.76 56.61
Tax expense 10.20 9.20 9.40 8.26 8.24
Net income 42.00 36.60 55.20 48.50 48.37
Net income margin 3% 3% 4% 3.5% 3.5%

Diluted shares outstanding 133.20 134.70 138.10 138.10 138.10

EPS £ 0.32 £ 0.27 £ 0.40 £ 0.35 £ 0.35

PRIMARY ASSUMPTIONS

COGS (as % of sales) 70.20% 70.38% 72.47% 71.02% 71.02%

Distribution costs (as % of sales) 17.10% 16.58% 14.94% 14.9% 14.94%
Administrative Costs (as % of sales) 5.66% 6.08% 6.22% 6.2% 6.22%
Effective tax rate 19.5% 20.1% 14.6% 14.55% 14.55%

CASH FLOW STATEMENT

2022 2023
Operating activities:
Net income 48.50 48.37
D&A 41.31 42.10
(increase)/ decrease in working capital 6.51 - 0.46

Cash flow from operations: 96.32 90.01

Investing activities:
Capital expenditure - 54.01 - 54.23

Cash flow from investing: - 54.01 - 54.23

Financing activities:
Issuance of long term debt
(Repayment of long term debt)
Repurchase of equity
Dividends paid
Option proceeds

Cash flow from financing activities: - -

Net change in cash: 42.31 35.77

Beginning cash balance 67.30 109.61
Ending cash balance 109.61 145.38
INCOME STATEMENT

2024 2025 2026 2027 2028 2029 2030 2031

1,390.65 1,396.56 1,407.20 1,416.53 1,425.95 1,435.48 1,445.10 1,454.82

987.61 991.81 999.37 1,005.99 1,012.68 1,019.45 1,026.28 1,033.18
403.04 404.75 407.84 410.54 413.27 416.03 418.82 421.64
29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0%
207.75 208.63 210.22 211.61 213.02 214.44 215.88 217.33
86.48 86.85 87.51 88.09 88.67 89.27 89.86 90.47
108.81 109.28 110.11 110.84 111.58 112.32 113.07 113.83
7.8% 7.8% 7.8% 7.8% 7.8% 7.8% 7.8% 7.8%
42.43 44.41 45.26 46.18 47.30 48.15 49.00 49.84
66.38 64.86 64.84 64.66 64.27 64.17 64.07 63.99
4.8% 4.6% 4.6% 4.6% 4.5% 4.5% 4.4% 4.4%
9.48 9.29 9.11 8.92 8.73 8.54 8.35 8.15

56.90 55.57 55.73 55.74 55.54 55.63 55.73 55.84

8.28 8.09 8.11 8.11 8.08 8.09 8.11 8.13
48.62 47.48 47.62 47.63 47.46 47.54 47.62 47.71
3.5% 3.4% 3.4% 3.4% 3.3% 3.3% 3.3% 3.3%

138.10 138.10 138.10 138.10 138.10 138.10 138.10 138.10

£ 0.35 £ 0.34 £ 0.34 £ 0.34 £ 0.34 £ 0.34 £ 0.34 £ 0.35

RIMARY ASSUMPTIONS

71.02% 71.02% 71.02% 71.02% 71.02% 71.02% 71.02% 71.02%

14.94% 14.94% 14.94% 14.94% 14.94% 14.94% 14.94% 14.94%
6.22% 6.22% 6.22% 6.22% 6.22% 6.22% 6.22% 6.22%
14.55% 14.55% 14.55% 14.55% 14.55% 14.55% 14.55% 14.55%

ASH FLOW STATEMENT

2024 2025 2026 2027 2028 2029 2030 2031

48.62 47.48 47.62 47.63 47.46 47.54 47.62 47.71

42.43 44.41 45.26 46.18 47.30 48.15 49.00 49.84
- 0.47 - 0.49 - 0.87 - 0.77 - 0.77 - 0.78 - 0.79 - 0.80

90.58 91.41 92.01 93.04 93.99 94.90 95.83 96.76

- 54.46 - 54.69 - 55.11 - 55.47 - 55.84 - 56.22 - 56.59 - 56.97

- 54.46 - 54.69 - 55.11 - 55.47 - 55.84 - 56.22 - 56.59 - 56.97

 - - - - - - - -

36.12 36.72 36.91 37.56 38.14 38.69 39.23 39.79

145.38 181.50 218.22 255.13 292.69 330.83 369.52 408.75
181.50 218.22 255.13 292.69 330.83 369.52 408.75 448.54
-
 BALANCE SHEET
All numbers are in millions of £
2012 2013 2014 2015
Assets:
Non current assets:
PP&E 282.90 270.30 288.60 302.76
Goodwill 260.00 74.30 74.30 74.30
Intangible assets 170.50 30.50 27.90 26.45
Investments - 0.30 0.30 0.30
Investment in joint venture using equity method 0.50 0.50 0.80 0.80
Deferred consideration 1.30 1.40 1.40 1.40
Financial assets- derivatives 16.60 14.50 7.00 7.00
Total non current assets: 731.80 391.80 400.30 413.00

Current assets:
Inventories 187.80 208.20 219.60 213.38
Trade receivables 131.50 98.80 118.40 111.93
Financial assets- derivatives 0.30 9.60 0.40 0.40
Cash and short term deposits 79.40 276.10 67.30 109.61
Total current assets: 399.00 592.70 405.70 435.31

Assets in disposal group held for sale -

Total assets: 1,130.80 984.50 806.00 848.31

Non current liabilities:

Long term debt 419.70 184.30 179.70 179.70
Derivatives 8.70 3.90 6.20 6.20
Retirement benefit obligation 79.80 67.20 57.70 57.70
Deferred tax liability 69.40 14.60 11.40 11.40
Deferred income 6.90 9.60 7.80 7.80
Total non current liabilities: 584.50 279.60 262.80 262.80

Current Liabilities:
Trade payables 266.40 221.80 218.30 212.11
Short term borrowing 2.00 167.50 26.50 26.50
Derivatives - 2.30 2.00 2.00
Current tax liabilities 0.70 2.60 3.60 3.60
Deferred income 0.60 1.60 1.70 1.70
Provisions 2.30 1.70 1.70 1.70
Total current liabilities: 272.00 397.50 253.80 247.61

Liabilities associated with disposal group - - -

Total liabilities: 856.50 677.10 516.60 510.41

Shareholder's equity: 274.30 307.40 289.40 337.90

Minority interest - - - -
Total equity: 274.30 307.40 289.40 337.90
check: - - - -
BALANCE SHEET

2016 2017 2018 2019 2020 2021 2022 2023

316.08 328.62 339.60 349.96 359.59 368.44 376.72 384.46

74.30 74.30 74.30 74.30 74.30 74.30 74.30 74.30
25.26 24.75 24.05 23.54 23.20 22.89 22.68 22.53
0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30
0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80
1.40 1.40 1.40 1.40 1.40 1.40 1.40 1.40
7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00
425.14 437.17 447.45 457.29 466.59 475.13 483.20 490.79

214.25 215.14 216.05 217.70 219.14 220.60 222.07 223.56

112.38 112.85 113.33 114.19 114.95 115.71 116.49 117.27
0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40
145.38 181.50 218.22 255.13 292.69 330.83 369.52 408.75
472.41 509.89 548.00 587.42 627.18 667.55 708.48 749.98

897.55 947.06 995.45 1,044.71 1,093.77 1,142.68 1,191.68 1,240.77

179.70 179.70 179.70 179.70 179.70 179.70 179.70 179.70

6.20 6.20 6.20 6.20 6.20 6.20 6.20 6.20
57.70 57.70 57.70 57.70 57.70 57.70 57.70 57.70
11.40 11.40 11.40 11.40 11.40 11.40 11.40 11.40
7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80
262.80 262.80 262.80 262.80 262.80 262.80 262.80 262.80

212.98 213.86 214.77 216.41 217.84 219.29 220.76 222.24

26.50 26.50 26.50 26.50 26.50 26.50 26.50 26.50
2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00
3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60
1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70
1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70
248.48 249.36 250.27 251.91 253.34 254.79 256.26 257.74

511.28 512.16 513.07 514.71 516.14 517.59 519.06 520.54

386.27 434.89 482.38 530.00 577.63 625.08 672.62 720.24

- - - - - - - -
386.27 434.89 482.38 530.00 577.63 625.08 672.62 720.24
- - - - - - - -
 2024

391.70
74.30
22.42
0.30
0.80
1.40
7.00
497.92

225.06
118.06
0.40
448.54
792.06

1,289.98

179.70
6.20
57.70
11.40
7.80
262.80

223.73
26.50
2.00
3.60
1.70
1.70
259.23

522.03

767.95
-
767.95
-
 DEPRECIATION AND AMORTIZATION
All numbers are in millions of £
2012 2013 2014 2015 2016 2017

Revenue 1,514.70 1,381.60 1,391.00 1,379.28 1,384.89 1,390.65

Capital expenditure 48.60 42.8 62.80 49.75 49.95 50.16
Capital expenditure (as % of sales) 3.2% 3.1% 4.5% 3.6% 3.6% 3.6%

Depreciation expense 30.90 29.00 28.60 35.60 36.63 37.62

D&A as % of PP&E 10.9% 10.7% 9.9% 10.5% 10.4% 10.3%

Beginning PP&E 288.60 302.76 316.08

Capital expenditure 49.75 49.95 50.16
(Depreciation expense) - 35.60 - 36.63 - 37.62
Ending PP&E 282.90 270.30 288.60 302.76 316.08 328.62

Expenditure on intangibles 6.6 5.7 1.10 4.26 4.28 4.30

Expenditure (as % of sales) 0.4% 0.4% 0.1% 0.3% 0.3% 0.3%

Amortisation expense 12.3 6.8 3.70 5.72 5.46 4.81

Amortisation as % of intangibles 7.21% 22.30% 13.26% 17.78% 17.78% 16.27%

Beginning intangibles 27.90 26.45 25.26

Expenditure on intangibles 4.26 4.28 4.30
Amortisation expense - 5.72 - 5.46 - 4.81
Ending intangibles 170.50 30.50 27.90 26.45 25.26 24.75

Capex, net 55.20 48.50 63.90 54.01 54.23 54.46

D&A expense, net 43.20 35.80 32.30 41.31 42.10 42.43
RTIZATION

2018 2019 2020 2021 2022 2023 2024

1,396.56 1,407.20 1,416.53 1,425.95 1,435.48 1,445.10 1,454.82

50.37 50.76 51.09 51.43 51.78 52.13 52.48
3.6% 3.6% 3.6% 3.6% 3.6% 3.6% 3.6%

39.39 40.40 41.46 42.58 43.49 44.38 45.24

10.4% 10.4% 10.3% 10.4% 10.3% 10.3% 10.4%

328.62 339.60 349.96 359.59 368.44 376.72 384.46

50.37 50.76 51.09 51.43 51.78 52.13 52.48
- 39.39 - 40.40 - 41.46 - 42.58 - 43.49 - 44.38 - 45.24
339.60 349.96 359.59 368.44 376.72 384.46 391.70

4.32 4.35 4.38 4.41 4.44 4.47 4.50

0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%

5.02 4.86 4.71 4.72 4.65 4.61 4.61

17.28% 17.11% 16.89% 17.09% 17.03% 17.00% 17.04%

24.75 24.05 23.54 23.20 22.89 22.68 22.53

4.32 4.35 4.38 4.41 4.44 4.47 4.50
- 5.02 - 4.86 - 4.71 - 4.72 - 4.65 - 4.61 - 4.61
24.05 23.54 23.20 22.89 22.68 22.53 22.42

54.69 55.11 55.47 55.84 56.22 56.59 56.97

44.41 45.26 46.18 47.30 48.15 49.00 49.84
 WORKING CAPITAL SCHEDULE
All numbers are in millions of £
2012 2013 2014 2015
Revenue 1,514.70 1,381.60 1,391.00 1,379.28
Cost of Revenue 1,063.30 972.40 1,008.10 979.54

Working capital balances:

Inventories 187.80 208.20 219.60 213.38
Trade receivables 131.50 98.80 118.40 111.93

Total non cash current assets: 319.30 307.00 338.00 325.30

Trade payables 266.40 221.80 218.30 212.11

Current tax liabilities 0.70 2.60 3.60 3.60
Deferred income 0.60 1.60 1.70 1.70
Provisions 2.30 1.70 1.70 1.70

Total non intrest baring current liabilities: 270.00 227.70 225.30 219.11

Net working capital/(deficit) 49.30 79.30 112.70 106.19

increase/ (decrease) in working capital 30.00 33.40 - 6.51

Ratios and assumptions:

Number of days in period 365

Inventories (days outstanding) 64.47 78.15 79.51 79.51

Trade receivables ( days for collecting) 31.69 26.10 31.07 29.62

Trade payables (days outstanding) 91.45 83.25 79.04 79.04

NG CAPITAL SCHEDULE

2016 2017 2018 2019 2020 2021 2022 2023 2024

1,384.89 1,390.65 1,396.56 1,407.20 1,416.53 1,425.95 1,435.48 1,445.10 1,454.82
983.52 987.61 991.81 999.37 1,005.99 1,012.68 1,019.45 1,026.28 1,033.18

214.25 215.14 216.05 217.70 219.14 220.60 222.07 223.56 225.06

112.38 112.85 113.33 114.19 114.95 115.71 116.49 117.27 118.06

326.63 327.99 329.38 331.89 334.09 336.31 338.56 340.83 343.12

212.98 213.86 214.77 216.41 217.84 219.29 220.76 222.24 223.73

3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60
1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70
1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70

219.98 220.86 221.77 223.41 224.84 226.29 227.76 229.24 230.73

106.65 107.12 107.61 108.48 109.25 110.02 110.80 111.59 112.39

0.46 0.47 0.49 0.87 0.77 0.77 0.78 0.79 0.80

79.51 79.51 79.51 79.51 79.51 79.51 79.51 79.51 79.51

29.62 29.62 29.62 29.62 29.62 29.62 29.62 29.62 29.62

79.04 79.04 79.04 79.04 79.04 79.04 79.04 79.04 79.04

 CAPITAL SCHEDULE
All numbers are in millions of £
2014 2015 2016 2017 2018

Total term debt:

Beginning balance 206.20 206.20 206.20 206.20
Issuance 25.30 - 119.80 11.60
(repayment) - 25.30 - - 119.80 - 11.60
Ending balance 206.20 206.20 206.20 206.20 206.20

Lond term debt

Average balances 206.20 206.20 206.20 206.20
Intrest rate 4.992% 4.992% 4.992% 4.992%
Intrest expense 10.29 10.29 10.29 10.29

Cash balances:
Average balances 88.45 127.49 163.44 199.86
Intrest rate 0.50% 0.50% 0.50% 0.50%
Intrest income 0.44 0.64 0.82 1.00

Intrest expense (net) 9.85 9.66 9.48 9.29

 2019 2020 2021 2022 2023 2024

206.20 206.20 206.20 206.20 206.20 206.20

15.00
- 15.00
206.20 206.20 206.20 206.20 206.20 206.20

206.20 206.20 206.20 206.20 206.20 206.20

4.992% 4.992% 4.992% 4.992% 4.992% 4.992%
10.29 10.29 10.29 10.29 10.29 10.29

236.67 273.91 311.76 350.18 389.14 428.65

0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
1.18 1.37 1.56 1.75 1.95 2.14

9.11 8.92 8.73 8.54 8.35 8.15

 Debt
25.30
-
-
73.80
10.00
8.80
2.80
15.00
33.80
Total 169.50
Interest rate Weighted Avg Int Rate
4.97% 0.74%
0.00% 1000 3% 2.31%
0.00% 300 7.00% 1.62%
5.31% 2.31% 1300 3.92%
5.27% 0.31% 5%
5.53% 0.29%
5.84% 0.10%
3.87% 0.34%
4.52% 0.90%

4.99%
 EQUITY SCHEDULE

2012 2013

Beginning equity balance

Net income
Dividends Non-dividend paying Company
Ending equity balance 274.30 307.40
EQUITY SCHEDULE

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

289.40 337.90 386.27 434.89 482.38 530.00 577.63 625.08 672.62

48.50 48.37 48.62 47.48 47.62 47.63 47.46 47.54 47.62

289.40 337.90 386.27 434.89 482.38 530.00 577.63 625.08 672.62 720.24
 2024

720.24
47.71

767.95
 DISCOUNTED CASH FLOW VALUATION
2014 2015 2016 2017 2018

EBIT 66.61 66.27 66.38 64.86

Less: taxes 13.99 13.92 13.94 13.62
NOPAT/Post tax EBIT 52.62 52.35 52.44 51.24

Plus: D&A expense 41.31 42.10 42.43 44.41

Less: capital expenditure - 54.01 - 54.23 - 54.46 - 54.69
Changes in working capital 6.51 - 0.46 - 0.47 - 0.49

Unlevered free cash flow 46.43 39.75 39.94 40.48

WACC 6.5% 6.5% 6.5% 6.5%
PV of FCF 43.61 35.06 33.09 31.49

PGM EMM Companies Levered Beta

Growth Rate of FCF after 10 years 2%
Exit multiple 8.3x
Terminal value £ 971.6 £ 831.0
PV of terminal value £518.79 £443.73

EnV £818.62 £743.56

Short term borrowings 26.50 26.50
Long term borrowings 179.70 179.70
Cash 67.30 67.30
Equity value: 679.72 604.66
Diluted shares 138.10 138.10
Equity value per share: £ 4.92 £ 4.38

Football Field
Low Range High
EMM 4.38 - 4.38
PGM 4.66 1.47 6.13
Comps 3.91 3.27 7.18
Current price 4.63

Current 4.63
price

Comps 3.91 7.18

PGM 4.66 6.13

Current 4.63
price

Comps 3.91 7.18

PGM 4.66 6.13

EMM 4.38 4.38

- 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

UATION
2019 2020 2021 2022 2023 2024
WACC
Debt-to-Total Capitalization
64.84 64.66 64.27 64.17 64.07 63.99 Equity-to-Total Capitalization
13.62 13.58 13.50 13.48 13.46 13.44 Cost of Debt
51.23 51.08 50.77 50.70 50.62 50.55 Cost of Debt
Tax Rate
45.26 46.18 47.30 48.15 49.00 49.84 After-tax Cost of Debt
- 55.11 - 55.47 - 55.84 - 56.22 - 56.59 - 56.97
- 0.87 - 0.77 - 0.77 - 0.78 - 0.79 - 0.80 Cost of Equity
Risk-free Rate
40.51 41.02 41.46 41.85 42.24 42.62 Market Risk Premium (Rm-Rf)
6.5% 6.5% 6.5% 6.5% 6.5% 6.5% Levered Beta
29.60 28.15 26.72 25.33 24.01 22.76 Size Premium
Cost of Equity
WACC

D/E Tax Rate Un. Beta

EMM
4.38 6.5% 6.7% 7.0% 7.2% 7.5%
7.30 4.38 4.38 4.38 4.38 4.38
7.80 4.38 4.38 4.38 4.38 4.38
8.30 4.38 4.38 4.38 4.38 4.38
8.80 4.38 4.38 4.38 4.38 4.38
9.30 4.38 4.38 4.38 4.38 4.38

PGM
4.92 6.5% 6.7% 7.0% 7.2% 7.5%
7.30 5.10 4.99 4.88 4.77 4.66
7.80 5.36 5.24 5.12 5.01 4.90
8.30 5.62 5.49 5.37 5.25 5.13
8.80 5.87 5.74 5.61 5.49 5.36
9.30 6.13 5.99 5.86 5.73 5.60
WACC Share Price 4.626
24.4% Mcap 638.8506
75.6%

4.99%
21.0%
3.9%

3.40%
6.6%
0.69
0.00%
8.0%
6.975%