Capital buys installation capacity; capacity converts to revenue only through utilisation; utilisation converts to cash through a favourably structured working capital cycle.

The conversion chain from capital to investor return runs as follows, and every link is modelled explicitly in Section 19:

1. Capital funds a controlled installation facility, plotter and pattern software, tooling and the recruitment and certification of installers.
2. Installers generate a fixed monthly stock of installer-hours, 187 gross hours per FTE per month.
3. Utilisation converts gross hours to billable hours. This is the single controlling variable.
4. Billable hours are allocated across the service mix and priced, producing revenue.
5. Film, consumables, installer payroll and a rework provision are deducted to produce gross profit of 59.8% at maturity.
6. Studio and head-office overhead, marketing, commission and card fees are deducted to produce EBITDA of 20.5%.
7. Customer deposits and card settlement fund a large part of the film inventory cycle, so EBITDA converts to operating cash at a high rate once the business is past its ramp.
8. Operating cash amortises the debt, funds maintenance capital expenditure and, from Year 4, supports a dividend. Residual value is realised on exit.

Business model canvas

Installer payroll is charged to cost of sales in full rather than to overhead. This is deliberate: it means gross margin visibly compresses when utilisation falls, which is the economic reality of the business.