The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (GBP, Millions)||£810.75||£1,235.33||£1,514.00||£1,842.00||£1,825.71|
|Source||Analyst x4||Analyst x3||Analyst x1||Analyst x2||Extrapolated @ (-0.88%)|
Discounted (@ 8.3%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = £1,826 × (1 + 1.49%) ÷ (8.3% – 1.49%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
£23,828 = £5,559 + £18,270
Value = Total value / Shares Outstanding (£23,828 / 991)Discount to Share Price
Value per share:
Current discount (share price of £13.67): 43.14%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.3% = 1.49% + (0.8 * 8.51%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (£13,301,580,859).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.514 = 0.341 (1 + (1- 21%) (64.19%))
Levered Beta used in calculation = 0.8
Purchase SSE on or before the 'Buy Limit' to receive their next dividend payment.
Mr. Alistair Phillips-Davies has been Vice President of Eurelectric Aisbl since June 2015. Mr. Phillips-Davies has been the Chief Executive Officer of SSE plc since July 1, 2013. He leads the Executive Committee and the rest of the SSE team in the day-to-day running and operations of SSE and is responsible for implementing the strategy and policy set by the Board. He also has Board-level responsibility for Human Resources and Corporate Affairs. He served as Deputy Chief Executive of SSE plc since 2012. He served as Deputy Chief Executive of Retail and Wholesale Business at SSE plc (alternative name, Scottish & Southern Energy PLC) from September 2012 to July 1, 2013. He served as the Generation & Supply Director at SSE plc since December 2010 and served as its Member of Management Board. He served as Energy Supply Director at SSE plc since 2002. He joined Southern Electric in February 1997 having worked for HSBC and the National Westminster Bank in corporate finance and business development roles. He also served as Director of Energy Supply Operations at SSE plc and oversaw the introduction of the New Electricity Trading Arrangements. He serves as a Member of Eurelectric Aisbl. He has been an Executive Director of SSE plc since January 2002. He serves as the Chairman of the Risk Committee and has Board level responsibility for Energy Trading, Electricity and Gas Supply, Marketing and Energy Services. He has a degree in Natural Sciences and is a qualified Chartered Accountant.
Average tenure and age of the SSE management team in years:
Average tenure and age of the SSE board of directors in years:
SSE plc produces, generates, distributes, and supplies electricity and gas, as well as other energy-related services in the United Kingdom and Ireland. It operates through three segments: Wholesale, Networks, and Retail. The company generates electricity from gas, oil, coal, water, and wind. Its electricity networks transmit and distribute electricity to approximately 3.7 million businesses, offices, and homes through approximately 130,000 kilometers of overhead lines and underground cables; and gas networks distribute gas to approximately 5.7 million homes, offices, and businesses through 75,000 kilometers of gas mains. The company also supplies electricity and gas to approximately 9 million households and businesses under the SSE, Scottish Hydro, Southern Electric, SWALEC, Atlantic, and Airtricity brands. In addition, it maintains and replaces street and highway lighting; designs, builds, owns, and operates networks for electricity, gas, water, and heat; and provides network capacity, bandwidth, and data center services. Further, the company offers energy-related products and services, including home services, such as gas boiler covers, central heating and wiring maintenance and installation, telephone line rental, and calls and broadband services; and supplying, installing, maintaining, and reading meters in the household, commercial, industrial, and generation sectors. The company was formerly known as Scottish and Southern Energy plc and changed its name to SSE plc in September 2011. SSE plc was incorporated in 1989 and is based in Perth, the United Kingdom.
200 Dunkeld Road,
Perthshire, PH1 3AQ,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|LSE||SSE||Ordinary Shares||London Stock Exchange||GB||GBP||31. Mar 1993|
|OTCPK||SSEZ.F||Ordinary Shares||Pink Sheets LLC||US||USD||31. Mar 1993|
|DB||SCT||Ordinary Shares||Deutsche Boerse AG||DE||EUR||31. Mar 1993|
|BATS-CHIXE||SSEL||Ordinary Shares||BATS 'Chi-X Europe'||GB||GBP||31. Mar 1993|
|OTCPK||SSEZ.Y||SPONSORED ADR||Pink Sheets LLC||US||USD||03. Jan 1900|