Financial Projections

Jump to section

• Overview & contents
• i. Important Notice
• 1. Executive Summary
• 2. The Competitive Problem
• 3. Water: Compliance First, Saving Second
• 4. The Subscription Model
• 5. SWOT and Competitive Position
• 6. The Site and the Offer
• 7. Site Selection
• 8. Unit Economics
• 9. The Rollout and Its Gates
• 10. Funding
• 11. People and Operations
• 12. Compliance and Permits
• 13. Financial Projections
• 14. Break-Even
• 15. Sensitivity and Scenarios
• 16. Risk Management
• 17. Implementation Timeline
• 18. Returns
• 19. Key Performance Indicators
• 20. Key Assumptions
• 21. Conclusion
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Site Capital Schedule
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

13.1 Basis of preparation

• All amounts are in nominal South African rand. Revenue is built from sites open, cars washed per day, the blended walk-in ticket and the subscriber base, with subscription washes counted inside total throughput.
• Site operating costs are modelled per site and scale with the rollout. Labour, rent, chemicals, electricity, water, card fees and plant maintenance are stated separately.
• Group overhead — owner and management, administration, marketing, technology, compliance and insurance — is carried above site level and does not scale proportionally with sites.
• R78 000 per site of opening consumables and pre-opening payroll is a period cost and is charged to income in the year the site opens, escalating with site cost.
• Depreciation is charged on the capitalised element of site cost, net of the landlord installation allowance, over the useful lives of the canopy, plant and equipment.
• Interest derives from the facility-level schedules in Appendix C across five instruments.
• Corporate income tax is applied at 27 per cent with assessed losses carried forward subject to the section 20 limitation. No tax arises within the projection.
• The balance sheet is derived rather than plugged; shareholders’ funds roll forward from the two equity subscriptions and retained earnings, and the closing cash position reconciles exactly to the cash flow statement.

13.2 Projected income statement

Site-level EBITDA is positive from Year 1 at R146 000 and reaches R2.66 million by Year 5. Group EBITDA turns positive only in Year 3, because in Years 1 and 2 a full group overhead of R570 000 and R696 000 is carried on a single site. Assessed losses of R2.08 million accumulate across Years 1 to 4 and shelter the Year 5 profit entirely, so no tax is payable within the projection and R1.85 million of loss is carried forward.

13.3 The cost base as a share of revenue

Site costs scale with the rollout; group overhead does not. The build below shows each as a share of revenue, which is the only way to see whether a cost is being controlled or merely growing more slowly than the top line.

Water is the only line that falls in absolute percentage terms while its unit price rises 12.5 per cent a year, because litres per car fall from 59 to 40 faster than the tariff climbs. Every other site cost is broadly flat as a share of revenue across the whole plan. Group overhead falls from 55.6 per cent to 15.6 per cent, and that single movement accounts for essentially the entire swing from a minus 41.3 per cent EBITDA margin to a positive 16.4 per cent.

13.4 Projected cash flow

Operating cash flow is negative in Years 1 and 2 and turns positive in Year 3 at R112 000, reaching R1.36 million by Year 5. Closing cash never falls below R163 000, which is the Year 1 position and the tightest point in the plan. The Year 5 draw of R469 000 against cash reflects the third site being built out of a R1.40 million term loan against a R2.29 million net cost, with the difference met from accumulated cash.

13.5 Projected balance sheet

Shareholders’ funds fall from R602 000 at Year 1 to R47 000 at Year 2 as the second year of losses is absorbed, recover to R1.74 million on the growth subscription at Year 3, and reach R1.95 million by Year 5. Against R3.80 million subscribed, the equity has absorbed R1.85 million of cumulative losses — which is the cost of building three sites and carrying a group overhead while doing it.