Highveld Detailing Business Plan — Financial Assumptions

Every volume, pricing, cost and funding assumption behind the model, stated for independent testing.

Section 22 of 38

Financial Assumptions

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Every number in this plan derives from the assumptions in this section. They are stated in full so that a reader who disagrees with one can locate its effect, and so that the sensitivity analysis in Section 31 can be read against a known base.

Macroeconomic and escalation assumptions

Table 38. Macroeconomic assumptions

Assumption	Rate p.a.	Comment
Consumer price inflation	5.0%	Within the Reserve Bank target band
Retail price escalation	6.0%	Above CPI; retail protection pricing has some power
Contract price escalation	5.0%	Below wage escalation, a deliberately unfavourable assumption that compresses dealer margin over time
Wage escalation	6.8%	Above CPI, reflecting sectoral determination movements and competition for skilled installers
Consumables escalation	6.3%	Above CPI, reflecting the imported component of coating and film chemistry
Rent escalation	7.0%	Standard commercial lease escalation
Utilities escalation	9.5%	Well above CPI; partially hedged by solar generation
Other cost escalation	5.8%	General overheads

The gap between contract price escalation and wage escalation is the most important relationship in this table. Over five years it compounds into a meaningful compression of dealer channel margin, and it is the reason FY2032 EBITDA margin is in the low teens rather than the high teens.

Operating assumptions

Table 39. Studio, dealer unit and mobile unit operating assumptions

Assumption	Value	Basis
Detailing studio
Volume bays / detail bays / protection bays	3 / 2 / 3	Eight bays in total
Operating days per month	26	Six-day trading
Volume bay throughput	5.5 / bay / day	Express valeting
Detail bay throughput	1.6 / bay / day	Multi-stage detailing
Protection bay slots	13 / bay / month	Coating and film application cycles
Steady-state utilisation (volume / detail / protection)	82% / 78% / 78%	Achieved after the ramp period
Ramp to steady state	30%, 40%, 49%, 57%, 64%, 70%, 76%, 81%, 86%, 90%, 93%, 96%, 98%, 99%, 100%	Successive months from opening
Monthly rent / utilities / insurance / security	R97 800 / R34 000 / R14 000 / R9 000	Per studio, FY2028 levels
In-dealership unit
Daily work mix (used / CPO / PDI / wash)	7 / 3 / 4 / 12	Vehicles per day at a typical mid-size dealership
Operating days per month	22	Six-day operation
Steady-state utilisation	86%	Allows for flow variability
Ramp to steady state	55%, 70%, 82%, 92%, 100%	From mobilisation
Employees per unit	7	Detailers plus team leader
Volume rebate to the dealer	10%	On gross contract value
Equipment capital / mobilisation cost	R320 000 / R145 000	Equipment redeployable; mobilisation expensed
Mobile fleet unit
Vehicles per day	12	On-site valeting
Operating days per month	22	Weekday operation
Steady-state utilisation	84%	Route and weather variability
Staff per unit	2	Two detailers per vehicle
Vehicle and equipment capital	R620 000	Fitted panel van with tank and plant
Running cost per month	R18 500	Fuel, maintenance, water and consumable transport

Labour, working capital, tax and funding assumptions

Table 40. Labour productivity and establishment assumptions

Assumption	Value	Basis
Productive hours per employee per month (studio)	195	Net of breaks, training, travel and non-productive time
Productive hours per employee per month (dealer unit)	165	Lower than studio: more idle time between vehicle arrivals
Productive hours per employee per month (mobile)	176	Higher: scheduled routes with less idle time
Staffing buffer	1.15	Cover for absence, leave and training
Establishment floor	60%	Minimum crew retained at a unit regardless of volume — the reason costs cannot flex fully downward
Team leader ratio	1 per 6 detailers	On-site supervision
Area manager ratio	1 per 10 embedded units	The supervision layer that makes the dispersed model viable

Table 41. Working capital, tax and funding assumptions

Assumption	Value	Basis
Working capital
Debtor days — retail	0	Settled at the point of service
Debtor days — dealer	52	Dealer group payment practice
Debtor days — fleet	38	Corporate settlement terms
Inventory days — consumables	42	Includes ninety days of film stock as a currency buffer
Creditor days	32	Supplier terms
Accrual days on operating expenses	18	Payroll and overhead accruals
Tax
Corporate income tax rate	27%	South African statutory rate
Assessed loss utilisation cap	80%	Only this proportion of taxable income may be sheltered by brought-forward losses
Funding
Equity Tranche A / Tranche B	R15.0m / R9.0m	Months 1 and 15
Development finance term facility	R9.0m	10.50% over 84 months with a 36-month capital moratorium
Asset finance facility	R4.5m	12.25% over 48 months
Revolving working-capital facility	R4.0m	13.75%, drawn as required
Minimum cash floor	R1.5m	Operating liquidity buffer maintained at all times

An arrangement fee of 1.25% is charged on facility value and a commitment fee of 0.75% on undrawn balances; both are carried in the model.