Værdiansættelse af Parken Sport & Entertainment A/S

Tobias Linnebjerg Jørgensen & Christian Andersen

Student thesis: Diploma thesis

Abstract

Parken Sport and Entertainment (hereafter PSE) is a Group which has changed a lot over time. What started as a merger between two of Copenhagen's biggest football clubs, is now a group in the entertainment industry with fitness centers, vacations centers etc. PSE has been put through a turbulent process in the last couple of years, with changes in shareholders and the board of directors. This has resulted in a negative tendency for the stock. The negative tendency is the reason why we got interested in investigating the hypothesis as follows: “Is the PSE stock appropriately valuated?” In terms of valuating the stock, we have gone through the phases of the fundamental analysis and the valuation. The fundamental analysis consists of a strategic analysis and a financial analysis. The strategic analysis addressed the non-financial drivers for the development in the Group result. It showed that PSE is cyclical sensitive. The recession we are experiencing now, has affected all of the business units. Furthermore, the unrest caused by the turbulent development in the Board of directors and shareholders has affected the result of the group negatively, because of among other, that the sponsors do not feel as appreciated as they did before. The financial analysis addressed the financial drivers for the development in the Group result. It showed that in 2010, PSE had managed to turn a negative development in its ratios to positive in almost every case. But there is still room for improvement in the future. In addition, the growth analysis resulted in the conclusion that extraordinary items were less significant for the overall growth. After the fundamental analysis we were capable of budgeting as the fundamental analysis resulted in the development of both the financial- and non-financial drivers. This resulted in an actual pro forma statement, which was the basis of the valuation of the stock. We have used the FCFF-model in relation to valuating the stock, and therefore estimated rwacc’s components. This lead to a price per stock of 117,75 DKK. Hereafter we were able to answer our hypothesis regarding if the stock were appropriately valuated. The calculated stock price is higher than the closing price as per 12th October 2011 at “Københavns fondsbørs”; 85,00 DKK. This shows that the stock is underestimated with 39%. There can be many reasons for this. Some of them have relations to all our estimated values concerning the valuation. For example the sensitivity analysis showed that if we changed the sales growth to 2% instead of 3% the stock price would be 87,60kr. Another reason could be the aforementioned unrest in the board of directors and shareholders, which could have lead to a mistrust to the stock, and affected the stock negatively.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages101