ACC508 Information Systems, Decision Support Systems and Cloud Computing (DOC)

APN Outdoors Group Ltd

EXECUTIVE SUMMARY
APN Outdoor Group (ASX: APO) is an Australian listed firm which specializes in offering
advertising services including static roadside billboards, digital billboards, rail, transit
and airport advertising in both Australia and New Zealand. It was listed in the ASX in
November 2014. 1
The company boasts over 50,000 high impact sites and is committed to be the leaders
in the outdoor advertising industry by constantly investing in cutting-edge digital
innovation and developments to produce quality results.2
1 Quadrant Private Equity, "APN OUTDOOR."
Quadrant Private Equity. 2017.
http://quadrantpe.com.au/Investments/Quadrant-Private-Equity-No-3/Portfolio/APN-
Outdoors.aspx.
2 APN Outdoors,” About Us.”2017. https://www.apnoutdoors.com.au.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY................................................................................................. i
TABLE OF CONTENTS.................................................................................................. ii
LIST OF TABLES.......................................................................................................... iv
CHAPTER 1 : INTRODUCTION....................................................................................... 1
CHAPTER 2 : SHAREHOLDER ANALYSIS.......................................................................2
2.1 Type of Investors................................................................................................... 2
2.2 Marginal and Non-marginal Shareholders.................................................................2
CHAPTER 3 : RISK AND RETURN ANALYSIS..................................................................5
3.1 Risk Profile........................................................................................................... 5
3.2 Returns for 2016 Financial Year..............................................................................6
3.2.1 Returns- APN Outdoor Group............................................................................6
3.2.2 Returns- Australian All Ordinary Index................................................................7
3.3 Capital Projects..................................................................................................... 7
CHAPTER 4 : COST OF CAPITAL...................................................................................9
4.1 Introduction.......................................................................................................... 9
4.2 Cost of Equity....................................................................................................... 9
4.2.1 CAPM Model.................................................................................................. 9
4.2.2 Dividend Growth Model..................................................................................10
4.2.3 Dividend Growth Model Vs CAPM....................................................................11
4.3 Cost of Debt....................................................................................................... 11
4.4 Corporate Tax..................................................................................................... 11
4.5 Weight of Debt and Equity.................................................................................... 12
4.6 Weighted Average Cost of Capital.........................................................................12
4.7 Discussion on Cost of Capital................................................................................ 12
CHAPTER 5 : FINANCIAL STATEMENT ANALYSIS........................................................14
5.1 Introduction........................................................................................................ 14
5.2 Performance Ratios............................................................................................. 14
5.3 Other Ratios....................................................................................................... 16
REFERENCES............................................................................................................ 18
APPENDIX A: Top 20 Security Holders...........................................................................20
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APPENDIX B: Weekly Returns- APO.AX and AORD.........................................................21
APPENDIX C: Beta and Cost of Equity........................................................................... 22
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LIST OF TABLES
Table 2-1: Substantial Shareholders.................................................................................3
Table 2-2: Marginal Vs Non-Marginal................................................................................3
Table 4-1: Type of Debt- APN...........................................................................................9
Table 5-1: Financial Ratios- APN Outdoor Group...........................................................11
Table 5-2: Financial Ratios- oOH! Media Ltd..................................................................11
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CHAPTER 1: INTRODUCTION
The purpose of this report is to provide an overview of APN Outdoor Group’s
shareholders, its risk return analysis, the weighted average cost of capital and its
financial statement analysis.
The period under investigation was the 2016 financial year. All the calculations are
based on the 2016 financial statements and stock prices.
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