Torque Precision Auto Business Plan

Investor-ready independent workshop business plan: R8.00m capital, ten bays servicing in-warranty vehicles, Year 5 revenue R28.43m at a 19.4% margin.

Torque Precision Auto — a vehicle raised on a two-post lift in an equipped independent workshop

Business Plan & Investment Proposal · South Africa

Auto Mechanic Workshop Business Plan — South Africa

Torque Precision Auto (Pty) Ltd · An Independent Workshop Built To Service In-Warranty Vehicles.

An independent multi-bay motor workshop in a South African metro, RMI and MIWA accredited
and equipped with manufacturer-level diagnostics to service vehicles still under warranty. Four bays scaling to ten,
invoicing 17 463 book hours a year at a quarter below dealer labour rates, across retail, fleet and
insurer-referred mechanical work. R8.00 million of capital: R5.40 million equity and R2.60 million of
asset finance at 13.75 per cent with a two-year capital moratorium.

R8.00mCapital deployed

10 baysAt maturity

R28.43mYear 5 revenue

R5.52mYear 5 EBITDA

Read the executive summary →

The Competition Commission’s aftermarket guidelines released in-warranty
servicing to independent workshops from 1 July 2021, and the interesting fact is that the market did not
follow. Most independents still cannot touch that work, because it requires manufacturer-level diagnostics, trade-tested
technicians and service-book discipline that they have not bought. Torque Precision is built to be the independent that
can — posting R795 an hour against a dealer mid-point near R1,100, at a 66 per cent labour gross margin.
Underneath sits an arithmetic every workshop lives by: it sells book hours and buys clock hours, and profit is the
product of utilisation, efficiency against book time and the rate actually collected. Those three compound from
41 per cent of paid hours sold in Year 1 to 89 per cent by Year 5. Three of the five largest sensitivities are
people outcomes, which is why the plan calls the workshop manager its single most important hire.

The plan at a glance

Six measures that determine whether this workshop and its funding stand up.

R8.00mCapital deployed over five yearsR5.40m promoter and investor equity at 68%, plus R2.60m asset finance drawn against equipment at 13.75% with a two-year capital moratorium.

89%Book hours sold as a share of clock hoursFrom 41% in Year 1. The three ratios compounded — the single number that decides whether a workshop makes money.

R795 / R739Posted and effective labour rate28% below the dealer mid-point. The R56 gap is discount leakage, and letting it drift to 13% costs R833,032 of Year 5 EBITDA.

66% / 27%Labour and parts gross marginParts turn over more revenue than labour and generate less than half the gross profit. The parts business exists to support the labour business.

R2.84mRevenue per bay at Year 5From R1.21m. None of that gain comes from bay count — it comes from filling the bays that already exist.

46.3%Project IRROn a four-times exit multiple, with equity returning 39.5%. Cumulative losses are only recovered during Year 5.

The arithmetic every workshop lives by

What the workshop pays for against what it manages to sell — and why the gap between them is the entire business.

Clock hoursWhat the workshop buys19,600 hours a year of technician time at maturity, paid whether or not the bay is filled. Every bay adds salary, premises and equipment before it adds a single booked job.

against

Book hoursWhat it sells17,463 invoiced at Year 5 — 89% of the hours paid for, up from 41%. Utilisation, efficiency and the rate actually collected are the whole business.

Five years of trading

Revenue and EBITDA on the base case. The posted labour rate and bay utilisation are the two assumptions that matter most, and both are stressed in Section 12.

Revenue build, and the three ratios compounding behind it

A workshop sells book hours and buys clock hours. Bays rise from 4 to 10, but the gain comes from utilisation and efficiency: book hours sold climb from 41% of clock hours paid to 89%.

Year 1

R4.83m · 41% of clock hours sold

Year 2

R11.18m · 62%

Year 3

R18.86m · 76%

Year 4

R23.98m · 84%

Year 5

R28.43m · 89%

EBITDA and margin, Year 3 onward

Years 1 and 2 run EBITDA deficits of R2.14m and R0.38m by design — the workshop pays technicians and premises before the diary fills. Overhead falls from 73% of revenue to 26%.

Year 3

R2.11m · 11.2%

Year 4

R3.81m · 15.9%

Year 5

R5.52m · 19.4%

Why this plan works the way it does

The barrier is capability, not the lawSince 1 July 2021 a motorist may service an in-warranty vehicle at an independent without voiding the warranty. Most independents still cannot take that work, because they lack the diagnostics, the technicians and the service-book discipline. The opening has not been competed away.

A workshop sells book hours and buys clock hoursIt invoices standardised repair time and pays technicians for attendance. Profit is the product of three ratios — utilisation, efficiency against book time, and the rate actually collected — and they compound.

Fill the bays you have before you build the bays you wantRevenue per bay more than doubles to R2.84m with none of the gain coming from bay count. A workshop at 50% utilisation across ten bays loses more than one at 80% across five.

Leakage is the ratio no price list showsThe posted rate is R795; the rate collected is R739. Allowing that gap to widen to 13% costs R833,032 of Year 5 EBITDA, and it is invisible on every invoice.

It consumes cash for two years, by designEBITDA is negative in Years 1 and 2 and cumulative losses are recovered only during Year 5. An investor seeking distributions before Year 4 should not fund it — the plan says so itself.

Financial snapshot

Four charts from the plan. The full set of twenty-four appears throughout the sections below.

Figure 8. Clock hours paid against book hours invoiced.

Figure 10. Discount leakage is invisible on the price list.

Figure 13. Gross profit against overhead — the operating leverage.

Seventeen sections and five appendices. Every page carries full navigation, a section outline and links to the sections either side of it.

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Important Notice and Basis of PreparationBasis of preparation, data sources and forward-looking statement caveats. Please read first.

Appendices

Confidential. This document is provided for the purpose of evaluating an
investment in Torque Precision Auto (Pty) Ltd and may not be reproduced or distributed without written consent. Projections are
forward-looking statements based on the assumptions registered in Section 16 and are not guarantees of future
performance.