Karoo Rabbit Protein Business Plan › Section 13 › Financial Plan

The financial plan is a fully integrated five-year model in which the
income statement, balance sheet and cash-flow statement reconcile, and
the balance sheet balances in every year. All figures are in South
African Rand. The projections are illustrative, prepared by management
to demonstrate the commercial logic and indicative returns, and should
be independently reviewed by the recipient’s advisers before any
external circulation or capital commitment.

13.1 Key Assumptions

The model is bottom-up: revenue is built from rabbits processed,
dressing yield, channel mix and per-kilogram prices; cost of goods from
live-animal offtake, feed, processing, packaging and breeding inputs;
and operating expense from a scaling staff, logistics, marketing,
administration, grower-development, research and compliance base. The
principal macro and operating assumptions are:

13.2 Revenue Build

Revenue grows from R42.8 million to R428.4 million over the five
years, driven by the production ramp and the mix shift toward
value-added and export. Meat sales dominate throughout, complemented by
breeding/genetics, grower-services/feed and by-product streams.

Figure 7

13.3 Profitability

Gross margin is stable at approximately 40% across the plan. As
flagged in the disclaimer and in Section 5, this consolidated figure
blends high-margin genetics and value-added activity with the low-margin
grower-offtake and grower-services lines; the contracted per-head
payment to growers is the dominant component of cost of goods and the
principal reason the blended margin sits around 40% rather than higher.
The business turns EBITDA-positive in Year 3 and net-profit-positive in
Year 4, as operating leverage builds over the fixed processing and
overhead base.

Figure 8

Figure 9

Projected Income Statement

Note on taxation. The negligible tax charge in Year
5 reflects the shelter provided by accumulated assessed losses carried
forward from the loss-making ramp years, not a structurally low
effective tax rate. As the assessed-loss balance is consumed, the
effective tax rate will normalise toward 27% in later years beyond the
explicit forecast period.

13.4 Cash Flow

Operating cash flow follows profitability, turning positive in Year
4. The business consumes cash during the build-and-ramp phase — funded
by the capital raise — and reaches self-sustaining cash generation
thereafter. Closing cash remains positive in every year, with the
tightest point of approximately R9.1 million at the end of Year 4 before
recovering to R26.6 million in Year 5.

Figure 10

13.5 Balance Sheet

The projected balance sheet reconciles fully and balances in every
year. Property, plant and equipment peaks as the capital programme
completes and then depreciates; working capital scales with revenue; and
equity rebuilds from Year 4 as retained losses reverse. Closing retained
earnings turn positive in Year 5.

13.6 Capital Expenditure & Funding

Total capital expenditure is approximately R169 million — a core
programme of about R157 million across the build categories below, plus
roughly R12 million of maintenance and expansion capital in Years 4–5.
Capital is weighted toward processing, genetics, the feed mill and the
cold chain — the owned, defensible nodes of the chain.

Figure 11

Funding totals R245 million, blending development equity, senior term
debt and a working-capital facility. The structure provides headroom for
the cash-consuming ramp years, with a two-year capital moratorium on the
term debt aligning debt service to the arrival of operating cash
flow.

Figure 12

13.7 Unit Economics

At a steady-state Year-4 view, each rabbit generates approximately
R262 of revenue against R157 of cost of goods and R68 of allocated
operating expense, leaving roughly R37 of EBITDA per rabbit. These unit
economics demonstrate the viability of the model at the level of the
individual animal, before the operating leverage that accrues at higher
volumes.

Figure 13

13.8 Returns & Debt Service

The project generates an indicative project-level IRR of
approximately 17.4%, an NPV of about R26.5 million at a 15% discount
rate, and an implied enterprise value of roughly R527.9 million on a
7.0× exit multiple of Year-5 EBITDA. Debt-service cover strengthens
markedly as cash flow builds, rising to approximately 1.8× in Year 4 and
3.2× in Year 5 following the capital moratorium.

Figure 14

13.9 Sensitivity & Scenario Analysis

Selling price is by far the most powerful lever on profitability,
followed by volume and then feed cost. A 10% movement in selling price
swings Year-5 EBITDA across a range of roughly R33 million to R118
million, underscoring the strategic importance of the premium
positioning and value-added mix shift.

Figure 15

Across discrete scenarios, the business remains EBITDA-positive even
in the downside case, in which Year-5 revenue falls to approximately
R323 million at a 3.6% EBITDA margin. The base case delivers R428
million of revenue at a 17.6% margin, and the upside reaches roughly
R509 million at 25.2%.

Figure 16

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Karoo Rabbit Protein (Pty) Ltd.