Mainstreet Brick Business Plan — Key Performance Indicators

The utilisation, cost per unit, breakage and debtor indicators monitored weekly, with thresholds that trigger action.

Key Performance Indicators

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The following are the operating measures on which this project should be managed. Three of them — capacity utilisation, breakage and gross margin — carry more information about whether the investment case is holding than any revenue figure, because revenue rises with price escalation whether or not the plant is working.

Indicator	Definition	Target	Why it matters
Capacity utilisation	Units produced ÷ installed capacity	Above 79% cash break-even	Break-even is 79% and the plant is below it for two years
Cement dosage per unit	Cement consumed ÷ units produced	At specification, not above	Each 1% of excess cement is R152177 a year at Year 3 volumes
Breakage and reject rate	Units not sold ÷ units produced	Below 2.0%	Each point is R540722 of revenue at no additional input cost
Margin per machine hour	Gross margin ÷ machine capacity consumed	Monitored by product	The ranking by unit margin reverses on this measure
Debtor days	Trade debtors ÷ revenue × 365	Below 45 days	Growth consumes cash before it produces it
Bad debt as a share of revenue	Written off ÷ revenue	Below 0.75%	Halving it is worth R393375 a year at Year 3 volumes
SANS 1215 compliance rate	Batches passing strength test ÷ batches tested	100%	Certification is the whole basis of the specified-supplier position
Contracted offtake	Capacity covered by supply agreements	40% to 50% before commissioning	The condition that removes most of the ramp risk
Cement cost as a share of revenue	Cement ÷ revenue	Monitored at 29%	The single largest controllable input and a concentrated supply market
Debt service cover	EBITDA ÷ interest and capital	Above 1.30x	1.00x in Year 1 and 1.12x in Year 2, both below covenant

Three numbers, weekly, from data the plant already produces

Capacity utilisation, breakage and achieved gross margin. Utilisation comes off the production count and tells the operator whether the plant is above the line that determines whether it services its debt — 67.3 per cent in Year 1 rising to 85.5 per cent by Year 5. Breakage comes off the daily reject count reconciled to production and is worth R540 722 a point at Year 3 volumes, more than any commercial initiative in this plan. Achieved gross margin comes off the monthly accounts and is where cement dosage, price erosion and input escalation all show up first. Everything else in the table above is either a consequence of those three or a compliance obligation, and a plant that watches revenue instead will see a rising number in a month when it produced fewer units at a worse margin than the month before.

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