Verdant Fungi Farms Business Plan — Sensitivity and Scenario Analysis
What moves Year 5 EBITDA: contamination, yield per square metre, button price and compost cost, with downside and upside scenarios.
Sensitivity and Scenario Analysis
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- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. Market and Structure
- 3. How a Mushroom Farm Makes Money
- 4. Contamination and the Oyster Ceiling
- 5. SWOT and Competitive Position
- 6. Operations and the Room Build
- 7. Compliance and Food Safety
- 8. Management and Team
- 9. Financial Plan
- 10. Break-Even and Debt Service
- 11. Investment Analysis
- 12. Sensitivity and Scenario Analysis
- 13. Risk Analysis
- 14. Implementation Roadmap
- 15. Key Performance Indicators
- 16. Key Assumptions
- 17. Conclusion and Recommendation
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Production and Capital Schedules
- C. Appendix C: Funding, Debt and Working Capital Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
- 12.1 What moves Year 5 EBITDA
- 12.2 Scenarios
12.1 What moves Year 5 EBITDA
|
Driver |
Low (R) |
High (R) |
Swing (R) |
|---|---|---|---|
|
Yield per square metre ±12% |
3 481 801 |
6 127 432 |
2 645 631 |
|
Button price ±8% |
4 161 945 |
5 466 054 |
1 304 109 |
|
Compost cost, 4 margin points |
4 242 022 |
5 385 977 |
1 143 955 |
|
Crops per room 6.2 to 7.0 |
4 205 737 |
5 178 969 |
973 232 |
|
Contamination 3% to 10% |
4 341 607 |
5 168 308 |
826 701 |
|
Oyster market depth ±30% |
4 163 557 |
4 814 000 |
650 443 |
|
Base case Year 5 EBITDA |
4 814 000 |
Yield per square metre dominates, moving Year 5 EBITDA by R2 645 631 across a twelve per cent range. Button price follows at R1 304 109 and compost cost at R1 143 955, with crops per room at R973 232. The ranking carries the message of this plan: the largest lever and two of the next four are production disciplines determined by how well the farm is run, not by what the market does.
12.2 Scenarios
|
Downside |
Base |
Upside |
|
|---|---|---|---|
|
Contamination at maturity |
9.0% |
6.0% |
4.5% |
|
Yield per square metre |
8% below plan |
28.5 kg |
6% above plan |
|
Other assumption |
Oyster market 20% shallower |
As modelled |
7.0 crops per room |
|
Year 5 EBITDA |
3 599 914 |
4 814 000 |
6 060 842 |
|
Year 5 EBITDA margin |
19.7% |
26.4% |
33.2% |
|
Year 5 profit after tax |
894 297 |
2 307 437 |
2 690 775 |
The downside combination — contamination three points higher, yield eight per cent lower and the oyster market a fifth shallower — takes Year 5 EBITDA to R3.13 million and profit after tax to R554 000. The farm remains profitable in its fifth year but the cumulative deficit deepens materially and the equity return effectively disappears.