Investor Returns and Recommendation

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. The Opportunity
• 3. The Product Ladder
• 4. Operations and Certification
• 5. Market and Competitive Position
• 6. SWOT and Strategic Response
• 7. Financial Projections
• 8. Working Capital, Funding and the Balance Sheet
• 9. Sensitivity and Scenario Analysis
• 10. Risk Analysis
• 11. Regulatory and Compliance
• 12. Organisation
• 13. Implementation Roadmap
• 14. Key Performance Indicators
• 15. Investor Returns and Recommendation
• 16. Assumption Register
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Volume, Allocation and Price Schedules
• C. Appendix C: Funding, Working Capital and Balance Sheet Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

15.1 What the equity earns

These outcomes assume the investor’s 45 per cent holding dilutes to 38.3 per cent through an option pool and a modest later issuance, and net debt of US$0.80m at exit. They are not attractive by venture capital standards and the plan does not present them as though they were.

15.2 Why the returns look like this

15.3 The return that is actually available

15.4 What the numbers support

▪ A genuine and quantified commercial mechanic. Raising the share of field weight reaching Europe from 62 to 81 per cent lifts contribution per harvested kilogram from €0.379 to €0.852 on the same land, the same growers and the same freight.

▪ A supply model that flexes. Contracting rather than owning land keeps the base variable, avoids concentrating agronomic risk on one soil and water position, and preserves capital for the working capital cycle that needs it.

▪ A pre-committed and survivable downside. Bulk-only at the FY2028 base is roughly cash-neutral. The downside in this sector is a disappointing asset rather than a lost one.

▪ A real steady-state yield. US$1.55m of post-tax free cash flow at FY2031 scale, a 9.8 per cent cash return on the equity subscribed once growth stops consuming it.

15.5 What the numbers do not support

▪ A venture return or a five-year exit. 1.4 times money and a 7 per cent return on the mid case. An investor underwriting to a three-times multiple should not participate.

▪ Funding the trade cycle from equity. If equity is drawn to fund a cycle a facility was assumed to carry, the company reaches the FY2029 supply base with no capital left to run it.

▪ Building the prepared line before the programmes exist. A high-care facility built to a specification no customer has agreed has no alternative use and no second-hand market.

▪ Treating airfreight as a manageable cost line. It is 40 per cent of the bulk selling price, it is unhedged, and a 30.6 per cent rate rise removes the profit entirely.

15.6 Recommendation

Stated plainly: the value in Kenyan smallholder horticulture export is not in growing more, and not in selling higher, but in raising the share of each harvested kilogram that reaches a European customer. This plan takes that share from 62 to 81 per cent. Everything else in the document is consequence and constraint — the working capital that absorbs the earnings, the freight exposure that determines whether there are earnings, and the return profile that follows from both. An investor who can hold the position for yield to year ten will find it a sound agricultural infrastructure asset. One who needs a multiple in year five should read Section 15.1 and decline.