Two Seasons Garlic Business Plan — Capital Expenditure and Working Capital
R40.7m of capital expenditure across five years, the irrigation and cold store build, and the working capital cycle.
Capital Expenditure and Working Capital
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- Overview & contents
- 1. Executive Summary
- 2. Investment Thesis
- 3. Company and Business Overview
- 4. Problem, Customer Need and Value Proposition
- 5. Products and Services
- 6. Industry Analysis
- 7. Market Analysis
- 8. Customer Analysis
- 9. Market and Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model
- 13. Management and Organisation
- 14. Strategic Plan
- 15. SWOT Analysis and Strategic Implications
- 16. Risk Analysis
- 17. ESG and Sustainability
- 18. Implementation Roadmap
- 19. Financial Model and Revenue Build
- 20. Projected Income Statement
- 21. Projected Balance Sheet
- 22. Projected Cash Flow
- 23. Capital Expenditure and Working Capital
- 24. Funding Requirement and Structure
- 25. Break-Even Analysis
- 26. Investment Case and Returns
- 27. Debt Serviceability
- 28. Sensitivity and Scenario Analysis
- 29. Key Performance Indicators and Management Dashboard
- 30. Conclusion
- A. Appendix A: Assumption Register
- B. Appendix B: Conditions Precedent to the Seed Subscription
- C. Appendix C: Glossary
R40.7m of capex over five years, front-loaded into FY2028–29 for the packhouse and peeling line; working capital rises to R8.5m as stored inventory grows with the Karoo crop.
|
R million |
FY2027 |
FY2028 |
FY2029 |
FY2030 |
FY2031 |
Total |
Life (yrs) |
|---|---|---|---|---|---|---|---|
|
Irrigation and land development |
1.45 |
1.80 |
1.90 |
1.50 |
1.15 |
7.80 |
15 |
|
Curing, drying and storage sheds |
1.60 |
1.20 |
1.50 |
1.15 |
0.90 |
6.35 |
15 |
|
Packhouse, grading and cold store |
0.00 |
4.60 |
1.90 |
1.30 |
0.80 |
8.60 |
12 |
|
Peeling and processing line |
0.00 |
0.00 |
4.80 |
1.40 |
0.70 |
6.90 |
8 |
|
Mechanisation (planters, lifters, tractors) |
2.10 |
1.70 |
1.80 |
1.30 |
1.00 |
7.90 |
6 |
|
Buildings, workshop and systems |
0.90 |
0.60 |
0.70 |
0.50 |
0.45 |
3.15 |
10 |
|
Total capital expenditure |
6.05 |
9.90 |
12.60 |
7.15 |
5.00 |
40.70 |
Table 42. Capital expenditure schedule (R million). Contingency of 5% is held within each line; pre-operating expenditure is expensed through overheads.
|
R million |
FY2027 |
FY2028 |
FY2029 |
FY2030 |
FY2031 |
|---|---|---|---|---|---|
|
Irrigation and land development |
0.05 |
0.16 |
0.28 |
0.39 |
0.48 |
|
Curing, drying and storage sheds |
0.05 |
0.15 |
0.24 |
0.33 |
0.39 |
|
Packhouse, grading and cold store |
0.00 |
0.19 |
0.46 |
0.60 |
0.68 |
|
Peeling and processing line |
0.00 |
0.00 |
0.30 |
0.69 |
0.82 |
|
Mechanisation (planters, lifters, tractors) |
0.17 |
0.49 |
0.78 |
1.04 |
1.23 |
|
Buildings, workshop and systems |
0.04 |
0.12 |
0.18 |
0.24 |
0.29 |
|
Total depreciation |
0.32 |
1.11 |
2.25 |
3.29 |
3.90 |
|
Net PPE at year end |
5.73 |
14.52 |
24.87 |
28.74 |
29.83 |
Table 43. Depreciation by asset class, straight-line with half-year convention (R million).
23.1 Working capital
|
R million |
FY2027 |
FY2028 |
FY2029 |
FY2030 |
FY2031 |
|---|---|---|---|---|---|
|
Receivable days |
30 |
32 |
34 |
35 |
35 |
|
Inventory days (on cost of sales) |
60 |
70 |
75 |
80 |
80 |
|
Payable days |
30 |
30 |
30 |
30 |
30 |
|
Cash conversion cycle (days) |
60 |
72 |
79 |
85 |
85 |
|
Accounts receivable |
0.25 |
0.91 |
2.05 |
3.51 |
5.06 |
|
Inventory |
0.52 |
1.00 |
2.03 |
3.42 |
4.77 |
|
Accounts payable |
(0.63) |
(0.97) |
(1.55) |
(2.20) |
(2.86) |
|
Net working capital |
0.14 |
0.94 |
2.52 |
4.73 |
6.98 |
|
Investment in working capital |
(0.14) |
(0.80) |
(1.58) |
(2.21) |
(2.25) |
Table 44. Working-capital schedule (R million).
Working capital in a stored crop is structural: cured garlic is held for up to five months and the Karoo crop is marketed into autumn, so inventory days rise with the late-season share. Each R10m of revenue growth absorbs roughly R1.6m of working capital. A R3m seasonal overdraft is planned from FY2029 as a buffer but is not drawn in the base case.