Sakhile Construction Business Plan — Break-Even
The turnover needed to cover overhead at each grade, and when the business crosses its own break-even.
Break-Even
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- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. The CIDB Grading Ladder
- 3. The Market in 2026
- 4. Strategy: Private Work First
- 5. SWOT and Competitive Position
- 6. The Working Capital Problem
- 7. Retention and Guarantees
- 8. Unit Economics of a Contract
- 9. The Five-Year Roadmap and Gates
- 10. Funding
- 11. Estimating and Contract Control
- 12. People and Plant
- 13. Compliance and Registrations
- 14. Financial Projections
- 15. Break-Even
- 16. Sensitivity and Scenarios
- 17. Risk Management
- 18. Implementation Timeline
- 19. Returns
- 20. Key Performance Indicators
- 21. Key Assumptions
- 22. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
|
Measure |
Value |
Basis |
|---|---|---|
|
Gross margin, Year 5 |
18.7% |
At final account across the completed book |
|
Cash overhead, Year 5 |
R6.21m |
Excluding depreciation |
|
Break-even turnover, cash overhead |
R33.18m |
63.8% of the Year 5 plan |
|
Finance cost, Year 5 |
R1.96m |
Asset finance, discounting interest and service fee |
|
Break-even turnover including finance cost |
R43.66m |
84.0% of the Year 5 plan |
|
Asset finance capital repayments, Year 5 |
R1.88m |
Straight line over five years on each tranche |
|
Break-even turnover including full debt service |
R53.71m |
Above the Year 5 plan |
|
Margin of safety on the operative measure |
16.0% |
Against the finance-inclusive break-even |
|
R’000 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
Turnover |
4 200 |
9 500 |
19 000 |
34 000 |
52 000 |
|
Break-even, cash overhead |
5 506 |
9 789 |
15 862 |
23 840 |
33 182 |
|
Break-even including finance cost |
6 734 |
12 078 |
20 259 |
30 994 |
43 658 |
|
Break-even including full debt service |
8 152 |
14 367 |
24 626 |
37 845 |
53 711 |
|
Margin of safety, finance-inclusive |
-60.3% |
-27.1% |
-6.6% |
8.8% |
16.0% |
Break-even is stated on three bases because a contractor is exposed on all three. On cash overhead alone the Year 5 break-even is R33.18 million, a margin of safety of 36.2 per cent. Adding the R1.96 million of finance cost — which is a real, contractual, unavoidable charge on a business that funds a 66-day cycle — takes it to R43.66 million and the margin of safety to 16.0 per cent. Adding the R1.88 million of asset finance capital repayments takes it above the Year 5 plan, which is why the business carries R3.65 million of cash at Year 5 rather than distributing it.