Profitability and Cash Flow Maps
(1) I & E Drivers 
This shows both average weekly rent per unit and average weekly expenditure
per unit increasing steadily in real terms but with rents showing slightly
greater growth resulting in slightly improved margins over time, which
shows especially in the later years.
(2)Profit Drivers
This shows a steady improvement in asset turnover, initially accompanied
by deteriorating operating margins to 2022, then with improving margins
to 2032. The net effect is an improvement from low to medium profitability
in the later years
(3) Cost of Capital Drivers
The effective interest rate is forecast to fall initially towards 6.75%
then rising sharply to 8% by 2032. Leverage is forecast to increase slightly
then fall back to its current position. The net effect is to increase
the cash cost of capital.
(4)Value Drivers
The improvement in return on assets offsets the increasing cash cost of
capital, so value addition falls then rises over the 30-year forecast
period.
| << Introduction | Credit & Capacity Maps >> |