Urbanova — Financial Plan

The basis of preparation, the projected profit and loss, cash flow and balance sheet, the book-value versus sponsor-fair-value analysis and the key ratios underpinning Urbanova.

Section 27 · Business Plan

Financial Plan

The basis of preparation, the projected profit and loss, cash flow and balance sheet, the book-value versus sponsor-fair-value analysis and the key ratios underpinning Urbanova.

13.1 Basis of Preparation

Sponsor anchors preserved: revenue, EBITDA,
cumulative units and portfolio fair value are exactly as per the sponsor
brief.
Independent re-derivation below EBITDA:
depreciation (buildings and infrastructure 2.5% straight-line on
in-service cost, half-year convention; technology 20% straight-line);
interest (blended 10.25% senior; 11.5% RCF standby); taxation at 27%
with section 20 assessed-loss carry-forward subject to the
80%-of-taxable-income limitation.
Investment property at cost: the balance sheet
carries property at depreciated cost, the lender-conservative
convention. The sponsor’s fair-value trajectory is disclosed separately
(Section 13.5) and drives the exit case only.
Balance sheet integrity: assets less liabilities
less equity is asserted to equal zero in every projection year; the
model fails loudly otherwise.

13.2 Projected Profit and Loss

Rm	FY2027	FY2028	FY2029	FY2030	FY2031
Revenue	180	520	1 150	2 400	4 100
EBITDA	-45	85	310	780	1 450
Depreciation	(12)	(39)	(72)	(111)	(160)
EBIT	-57	46	238	669	1 290
Net interest expense	(0)	(36)	(128)	(231)	(360)
Profit before tax	-57	10	110	438	930
Taxation (27%, s20)	–	(1)	(16)	(118)	(251)
Net profit after tax	-57	9	94	320	679
Assessed loss carried fwd	57	49	0	0	0

The FY2027 net loss of R57m arises from the sponsor’s negative EBITDA
plus first-year depreciation, before material debt is drawn. The
assessed loss shelters FY2028 almost entirely and part of FY2029 under
the 80% cap; the effective tax rate normalises toward 27% by
FY2030–FY2031. By FY2031 the Company earns R679m after tax, a 16.6% net
margin.

Figure 10

Figure 10: FY2031 profit bridge — revenue to net profit after tax

13.3 Projected Cash Flow

Rm	FY2027	FY2028	FY2029	FY2030	FY2031
Operating cash flow (NPAT + dep.)	-45	49	165	430	839
Capital expenditure	(1 250)	(1 405)	(1 488)	(1 625)	(2 083)
Equity drawn	1 500	1 100	800	–	–
Senior debt drawn	–	700	1 100	1 700	1 600
Senior principal repaid	–	–	(392)	(392)	(392)
Net cash movement	205	444	186	113	-36
Closing cash	205	649	834	947	911

Working capital movements are modelled as broadly neutral: rental is
collected monthly in advance while development creditors and retention
balances offset construction WIP; the R650m working-capital allocation
within the raise provides the buffer. Closing cash never falls below
R205m and no revolving-facility drawings are required under the base
drawdown schedule, the R8.5bn raise is sufficient for the plan as
modelled, provided drawdowns track the schedule in Section 14.

Figure 11

Figure 11: Five-year cumulative cash flow waterfall

13.4 Projected Balance Sheet

Rm	FY2027	FY2028	FY2029	FY2030	FY2031
Investment property (cost less dep.)	1 238	2 604	4 019	5 534	7 456
Cash and equivalents	205	649	834	947	911
Total assets	1 443	3 252	4 854	6 481	8 368
Senior debt	0	700	1 408	2 715	3 923
Revolving facility	–	–	–	–	–
Total liabilities	0	700	1 408	2 715	3 923
Share capital	1 500	2 600	3 400	3 400	3 400
Retained earnings / (losses)	-57	-48	46	366	1 044
Total equity	1 443	2 552	3 446	3 766	4 444
Check (A − L − E)	0.0	0.0	0.0	0.0	0.0

Figure 12

Figure 12: Balance sheet structure — assets vs funding

13.5 Book Value vs Sponsor Fair Value

Figure 13

Figure 13: Portfolio fair value vs depreciated book value

VALUATION UPLIFT IS THE RETURN — AND THE
RISK

FY2031 book value is R 7 456 m against sponsor fair
value of R18,800m, an R11 344m unrealised revaluation.
Roughly 20% of that uplift is supportable from development margin at
stabilisation (Section 5.1); the balance requires the sponsor’s implied
±9.6% exit yield to hold and the sales programme to deliver. Under IFRS
the Company may elect the fair-value model for investment property;
lenders should nonetheless covenant on cost-based LTV and cash-based
DSCR.

13.6 Key Ratios

Ratio	FY2027	FY2028	FY2029	FY2030	FY2031
EBITDA margin	(25.0%)	16.3%	27.0%	32.5%	35.4%
Net margin	-31,7%	1,8%	8,1%	13,3%	16,6%
DSCR (EBITDA / debt service)	n/a	2,37x	0,60x	1,25x	1,93x
Interest cover	n/a	2,37x	2,42x	3,37x	4,02x
Net debt (Rm)	-205	51	574	1 768	3 012
Net debt / EBITDA	n/m	0,6x	1,9x	2,3x	2,1x
LTV on book value	0,0%	26,9%	35,0%	49,1%	52,6%
LTV on sponsor fair value	0,0%	20,0%	19,6%	21,7%	20,9%

Figure 14

Figure 14: DSCR profile — FY2029 breach as amortisation begins

FINDING 2 (DETAIL) — FY2029 DSCR OF 0.60x

Debt service in FY2029 comprises R 128 m interest plus
the first R 392 m principal instalment against EBITDA of
R310m. The breach is a structural timing mismatch , not
a solvency event — closing cash of R834m covers the shortfall four times
over. Structural fixes, in order of lender preference: (i) sculpt
amortisation to the EBITDA ramp (level-DSCR profile ≥1.20x); (ii) extend
grace to three years; (iii) fund a debt-service reserve account of R320m
(six months’ peak service) at close. The plan recommends (i) plus a
R250m DSRA.

Figure 15

Figure 15: Interest cover and LTV trajectory

Figure 16

Figure 16: Net debt and section 20 assessed-loss utilisation

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Urbanova Living Developments (Pty) Ltd.