Slighted dated response on your model. First of all -thank you for taking the trouble for pulling this together.
A few things may be worth considering (no order of priority) -
- The new BEC is supposed to be 15L sq ft as per annual report. Was there an upward revision later?
- You should not assume occupancy at 100% - even in best case, the net occupancy tends to be in 90-95% range (due to churn etc.)
- On the other hand, the ramp of building 4 can be much faster. Need no take 5 yrs ; Starting year may be 2018 given 5 -6 months for fitouts et al
- Others have already mentioned about new BEC to be overlapping with existing to some extent.
- Number of meals as per AR in new segment is 15k currently. And within that we shouldn’t assume 100% capacity yet. On the other hand, the price increase yearly can be at least 10% per yr
- For modeling purpose, we should assume some increase in cost ratio for BEC due to competition
In your model, the biggest uplift comes from new BEC which may have slower ramp up.
I’ve done some of these edits in attached draft … please review.
Net net - I think the business provides for a margin of safety for someone willing to stay put. The gestation may probably be longer if execution delays or competitive intensity plays out.
NESCO_model_v3.xlsx (23.4 KB)