Lesedi Solar Care Business Plan — Contract Economics & Unit Analysis

The unit economics reconcile exactly to the stated 43% contribution margin for utility full-service work, and field labour at 32% of contract revenue is…

Contract Economics & Unit Analysis

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Figure 10. Contract price and contribution margin by service line.

Metric	Utility full O&M	Utility cleaning-only	C&I bundled
Indicative price	R165,000/MW/yr	R38,000/MW/yr	R58,000/MW/yr
Direct cost ratio	57%	62%	64%
Contribution margin	43%	38%	36%
Typical term	3–5 years	1–3 years	2–3 years
Renewal rate assumed	88%	78%	72%

7.1 A representative 75 MW full-service contract

Figure 11. Representative 75 MW full-service contract — annual contribution.

Line	Amount (R’000)	% of revenue
Contract revenue	7,125	100.0%
Field labour (crew, supervision allocation)	(2,280)	32.0%
Consumables, water and detergents	(460)	6.5%
Fleet, fuel and robot operating cost	(712)	10.0%
Depot allocation and site supervision	(598)	8.4%
Contribution	3,075	43.1%

The unit economics reconcile exactly to the stated 43% contribution margin for utility full-service work, and field labour at 32% of contract revenue is the dominant cost, which is why crew productivity and route density, rather than materials or equipment, determine whether the margin holds. It also explains why technician retention is treated in this Plan as a financial risk rather than a human-resources matter.

7.2 Pricing discipline

Lesedi prices on contribution margin, not on beating the incumbent. Contracts below a 34% contribution threshold require chief executive and chief financial officer approval; below 28% they require board approval. Where a strategic anchor contract justifies thinner margin, it is approved explicitly and tracked separately. This is the correct control: field-services businesses fail by buying revenue, and the board’s principal commercial lever is the discipline to walk away from underpriced tenders.

Figure 12. Margin expansion is overhead absorption, not price.

Analyst flagThe margin trajectory assumes a mix the sales effort must actually deliver

Blended contribution margin is projected to rise from 34.8% in year one to 42.0% by year seven. Since the highest-margin line available is utility full-service at 43%, a 42% blended outcome requires the revenue mix to be overwhelmingly weighted to full-service O&M, supplemented by high-margin diagnostics and near-zero-marginal-cost platform subscriptions. That is achievable, but it is a materially different sales mix from the 53% full-service share the Plan states, and it reinforces the reconciliation point in Section 6. Investors should treat the margin trajectory and the service mix as a single linked assumption rather than two independent ones, and ask management to restate both on a consistent basis.