Naledi Threads Business Plan — Sensitivity and Scenarios

How the plan responds to footfall, basket size, gross margin and rent moving against it, with downside and upside cases.

Sensitivity and Scenarios

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15.1 Single-variable sensitivity
15.2 Scenarios
15.3 The downside case: capital impairment
15.4 What management can do inside a bad year

15.1 Single-variable sensitivity

Figure 22. Sensitivity of Year 3 EBITDA.

Driver	Effect on Year 3 EBITDA	As a share of base	Comment
Revenue ±10%	±R120 243	73%	The dominant exposure; operating leverage runs both ways
Gross margin ±3 points	±R76 056	46%	The variable that moves silently; buying accuracy and shrinkage
Occupancy cost ±10%	±R24 681	15%	Includes the turnover clause, which is binding from Year 3
Payroll ±8%	±R44 880	27%	The minimum wage is escalating faster than inflation
Markdown rate ±1.5 points	±R38 028	23%	Markdown discipline is worth 2.1 points across the plan
Shrinkage ±0.5 points	±R12 676	8%	Each 0.5 point is R12 676 at Year 3 revenue
Units per transaction ±0.1	±R60 000	37%	Entirely within management control at no additional cost
Year 3 EBITDA, base case	R164 377	100%

Revenue dominates at R120 243 for a 10 per cent movement — 73 per cent of the Year 3 base EBITDA. Gross margin is the more dangerous variable because it moves silently: a three-point erosion, the entirely plausible result of the buying and shrinkage gains not materialising, costs R76 056 without producing any single event that forces attention.

Figure 23. Year 3 EBITDA across revenue and gross margin.

The grid shows the interaction. At the planned gross margin the store tolerates a revenue shortfall of roughly 12 per cent before Year 3 EBITDA turns negative; at 48.7 per cent margin it tolerates only about 5 per cent. Margin buys tolerance on revenue and revenue buys tolerance on margin, and a store that misses on both is the downside case below.

15.2 Scenarios

Figure 24. Year 3 EBITDA across scenarios, with debt service cover.

Scenario	Definition	Year 3 revenue	Year 3 EBITDA	Cover
Revenue uplift	Revenue 10% above plan; operating leverage runs the other way.	R2.79m	R285k	2.17x
Base	The plan as presented: R2.54m Year 3 revenue at 51.2% gross margin.	R2.54m	R164k	1.25x
Margin miss	Gross margin three points below plan — buying accuracy and shrinkage gains do not materialise.	R2.54m	R88k	0.67x
Revenue shortfall	Revenue 10% below plan; the fixed cost base does not move with it.	R2.28m	R44k	0.34x
Downside case	Revenue 18% below plan and margin three points down — the capital impairment case.	R2.08m	(R118k)	n/m

15.3 The downside case: capital impairment

The downside is not a weak return; it is the loss of the equity

On 18 per cent lower revenue and three points less margin — a combination that requires neither a recession nor a competitor opening in the centre, merely a store that does not find its customer as quickly as planned — the store never reaches EBITDA break-even after owner remuneration. The founder’s R600 000 of equity is exhausted during Year 3, the standby overdraft is fully drawn, and with no corrective action the cumulative cash shortfall reaches R827 892 by Year 5. Anyone funding this must be able to lose the full equity contribution, and the founder in particular must not be contributing capital they cannot afford to lose. This is stated plainly because it is the most likely reason this plan does not work, not the least likely.

15.4 What management can do inside a bad year

Lever	Available within	Value	Comment
Enforce the markdown cadence from week six	Weeks	Up to R38 028 of Year 3 EBITDA	Free, immediate, and the discipline most easily allowed to slip
Defer the second sales consultant	One year	R85 828 a year	The Year 3 hire is explicitly a decision to be re-taken on evidence
Tighten the open-to-buy and let stock run down	One season	Releases cash directly	Reduces the working capital absorption, at the cost of size depth
Push accessory attachment at the till	Weeks	R156 494 of revenue per 0.1 units	No additional rent, staff or marketing cost
Reduce Sunday trading hours	One lease cycle	The single largest payroll lever	Requires landlord consent; revisit at renewal
Draw the standby overdraft	Immediately	R150 000	Cheaper than reducing stock in November
Defer owner remuneration	Immediately	R168 000 to R327 906 a year	Available, unpleasant, and the reason it is budgeted rather than assumed away

The first four work without damaging the business. Enforcing the markdown cadence is free and immediate; deferring the Year 3 hire removes the single largest step in the cost base; tightening the open-to-buy releases cash; and accessory attachment improves revenue at no cost at all. Reducing stock in November to fund a cash gap is the false economy — it is the one month the store cannot afford to be short, and the overdraft exists precisely so that decision is never taken.

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