Precision Coachworks Business Plan — Financial Plan

Five-year projections with full income statement, cash flow and balance sheet: revenue to R29.31m and EBITDA to R4.10m.

Financial Plan

Jump to section

On this page

9.1 Basis of preparation
9.2 Projected income statement
9.3 Projected cash flow statement
9.4 Projected balance sheet
9.5 Capital requirement and funding

9.1 Basis of preparation

▪ All figures are in Rand and exclude VAT. The model is built from the two physical constraints — booth cycles and floor positions divided by cycle time — rather than from a growth rate applied to an assumed base.

▪ Booth capacity is booths multiplied by 2.4 cycles a day and 245 working days. Floor capacity is positions divided by key-to-key cycle time. Throughput is the lower of the two, reduced by utilisation.

▪ Revenue is throughput multiplied by an average repair value of approximately R35 000, split 32% labour, 16% paint and materials and 52% parts.

▪ Gross margin is struck at line level: labour 63% after productive wages, paint and materials 46%, parts 23%. The blended margin is stable at 39.5% because the mix does not change materially with volume.

▪ Depreciation is built from a phased asset schedule: booths and chassis bench over twelve years, fit-out, prep bays and solar over ten, welding, tools and paint mixing over eight, and accreditation and systems over three.

▪ Asset finance is drawn against equipment as it is commissioned, at 13.25% over seven years per tranche with a three-year capital moratorium. Interest is paid from Year 1; principal from Year 4.

▪ Corporate income tax is 27%, with assessed losses carried forward subject to the section 20 limitation capping the set-off at the higher of R1 million or 80% of taxable income.

▪ Working capital assumes 52 insurer debtor days, 35 creditor days, 7 days of work in progress and a 14-day parts float.

▪ No grant funding is assumed. Certification funding through the Motor Transformation and Sustainability Forum is noted as available to qualifying owners but not modelled.

9.2 Projected income statement

R	Year 1	Year 2	Year 3	Year 4	Year 5
Labour revenue	1 536 000	3 048 000	5 871 000	8 016 000	9 379 000
Paint and materials	768 000	1 524 000	2 935 000	4 008 000	4 689 000
Parts	2 496 000	4 953 000	9 540 000	13 026 000	15 241 000
Total revenue	4 800 000	9 525 000	18 346 000	25 050 000	29 309 000
Cost of sales	(2 905 000)	(5 764 000)	(11 103 000)	(15 160 000)	(17 738 000)
Gross profit	1 895 000	3 761 000	7 243 000	9 890 000	11 571 000
Gross margin	39.5%	39.5%	39.5%	39.5%	39.5%
Overhead	(3 671 000)	(4 261 000)	(6 294 000)	(6 975 000)	(7 470 000)
EBITDA	(1 776 000)	(500 000)	949 000	2 915 000	4 101 000
EBITDA margin	-37.0%	-5.2%	5.2%	11.6%	14.0%
Depreciation	(969 950)	(1 063 250)	(1 346 416)	(1 351 966)	(1 355 666)
Interest on asset finance	(478 944)	(518 092)	(684 861)	(687 345)	(590 605)
Profit / (loss) before tax	(3 224 894)	(2 081 342)	(1 082 277)	875 689	2 154 729
Taxation	—	—	—	—	(116 355)
Profit / (loss) after tax	(3 224 894)	(2 081 342)	(1 082 277)	875 689	2 038 374
Net margin	-67.2%	-21.9%	-5.9%	3.5%	7.0%
Cumulative profit / (deficit)	(3 224 894)	(5 306 236)	(6 388 513)	(5 512 824)	(3 474 450)

Figure 14. Cumulative profit after tax and the peak deficit.

9.3 Projected cash flow statement

R	Year 1	Year 2	Year 3	Year 4	Year 5
Profit / (loss) after tax	(3 224 894)	(2 081 342)	(1 082 277)	875 689	2 038 374
Add back: depreciation	969 950	1 063 250	1 346 416	1 351 966	1 355 666
(Increase) / decrease in working capital	(182 690)	(469 820)	(787 653)	(681 523)	(426 950)
Cash generated from operations	(2 437 634)	(1 487 912)	(523 514)	1 546 132	2 967 090
Capital deployed	— (funded at close)	(700 000)	(2 982 000)	(44 400)	(29 600)
Asset finance drawn	— (drawn at close)	295 455	1 258 636	18 740	12 494
Debt capital repaid	— (moratorium)	— (moratorium)	— (moratorium)	(742 606)	(901 701)
Net movement in cash	(2 437 634)	(1 892 457)	(2 246 878)	777 866	2 048 283
Opening cash	7 150 675	4 713 041	2 820 584	573 706	1 351 572
Closing cash	4 713 041	2 820 584	573 706	1 351 572	3 399 855

Figure 15. Cash flow — three years of consumption before the business pays for itself.

Opening cash after the Year 1 equipment, fit-out and accreditation spend and the first finance drawdown is R7 150 675. Cash generated from operations is negative R2.44 million in Year 1, negative R1.49 million in Year 2 and negative R0.52 million in Year 3, then turns to R1.55 million in Year 4 and R2.97 million by Year 5. Closing cash reaches its low point of R573 706 at the end of Year 3, when the second booth is commissioned and the debtor book is building fastest. That trough is what the working capital provision is sized against.

9.4 Projected balance sheet

R, at year end	Year 1	Year 2	Year 3	Year 4	Year 5
Equipment, fit-out and accreditation, net of depreciation	7 594 050	7 230 800	8 866 384	7 558 818	6 232 752
Insurer debtor book	683 836	1 356 986	2 613 677	3 568 767	4 175 529
Work in progress	55 712	110 542	212 934	290 740	340 181
Parts float	73 717	146 283	281 757	384 713	450 131
Cash	4 713 041	2 820 584	573 706	1 351 572	3 399 855
Total assets	13 120 356	11 665 195	12 548 458	13 154 610	14 598 448
Share capital	12 100 000	12 100 000	12 100 000	12 100 000	12 100 000
Retained earnings / (accumulated loss)	(3 224 894)	(5 306 236)	(6 388 513)	(5 512 824)	(3 474 450)
Total equity	8 875 106	6 793 764	5 711 487	6 587 176	8 625 550
Asset finance — non-current	3 614 675	3 910 130	4 426 160	3 543 199	2 560 099
Asset finance — current	0	0	742 606	901 701	995 594
Trade payables	630 575	961 301	1 668 205	2 122 534	2 417 205
Total liabilities	4 245 250	4 871 431	6 836 971	6 567 434	5 972 898
Total equity and liabilities	13 120 356	11 665 195	12 548 458	13 154 610	14 598 448

Figure 16. Balance sheet — asset composition.

Net book value of equipment, fit-out and accreditation peaks at R8.87 million at the end of Year 3 once the second booth and additional prep bays are commissioned, then declines as depreciation outruns the residual programme. Total equity falls from R12.10 million at inception to a low of R5.71 million at the end of Year 3 and recovers to R8.63 million by Year 5. Gearing peaks at 47.5 per cent in Year 3 and falls to 33.4 per cent by Year 5.

9.5 Capital requirement and funding

Item	R	Note
Spray booths — 2 heated, filtered, downdraught	4 600 000	The single largest capital item; second booth added in Year 3
Premises fit-out, extraction, bunding and compliance	1 560 000	Air emissions, waste handling, fire and effluent compliance
Chassis straightening bench and electronic measuring	1 380 000	Required for structural grading and manufacturer approvals
Preparation bays and extraction	1 150 000	Prep and flatting stations feeding the booths
Welding — MIG, MAG, resistance spot and aluminium	820 000	Manufacturer approvals specify welding equipment and operator certification
Solar, compressed air and backup power	780 000	Booth and compressor loads are production-critical
Hand tools, lifting, jigs and workshop equipment	740 000	Across 38 floor positions
Paint mixing room, scales and colour matching	560 000	Supplier-supported mixing system with spectrophotometer
Accreditation, audits and manufacturer approvals	420 000	SAMBRA, Bureau Veritas audit cycle, manufacturer facility requirements
Estimating and management systems	310 000	Estimating platform, job tracking, cycle-time reporting
Equipment, fit-out and accreditation	12 320 000	Phased with booth and floor commissioning
Working capital and the insurer debtor book	4 980 000	Sized against 52 debtor days and three years of operating cash consumption
Total capital deployed over five years	17 300 000	Funded by R12.10m equity and R5.20m asset finance

Year	Capital deployed (R)	Asset finance drawn (R)	Equity applied (R)
Year 1	8 564 000	3 614 675	4 949 325
Year 2	700 000	295 455	404 545
Year 3	2 982 000	1 258 636	1 723 364
Year 4	44 400	18 740	25 660
Year 5	29 600	12 494	17 106
Total	12 320 000	5 200 000	7 120 000

Figure 17. Working capital employed — the insurer debtor book.

Asset finance is used only against equipment that secures the facility, drawn as each tranche is commissioned at 42 per cent of equipment cost. The plan requires a three-year capital moratorium: debt service coverage cannot be calculated until Year 3 because EBITDA is negative until then, and the accreditation stack, the premises and the production team must all be in place before insurer volume arrives. This is stated as a term of the facility rather than left for the financier to discover.

Previous section8. Management and Governance

Next section10. Break-Even and Debt Service