Used Car Sales Business Plan Johannesburg South Africa

Investor-grade used vehicle dealership business plan: 1,465 units and R473.7m FY32 revenue at a 3.3% EBITDA margin.

Centurion Motor Exchange — revenue against EBITDA by year on the same scale, showing the margin gap

Business Plan & Investment Proposal · South Africa

Used Car Sales Business Plan — Johannesburg

Centurion Motor Exchange (Pty) Ltd · R473.7m Of Turnover. R15.4m Of EBITDA.

A retail used vehicle dealership at Centurion serving the Johannesburg market —
sourcing, reconditioning and retailing pre-owned vehicles with finance and value-added product attachment, scaling
from 514 units a year to 1 465. Revenue builds to R473.7 million on a gross margin held flat at
12.8 per cent, with EBITDA of R15.4 million after floor-plan interest by FY32.

1 465Units at FY32

R473.7mFY32 revenue

12.8%Gross margin, flat

3.3%FY32 EBITDA margin

R473.7 million of revenue sounds like a substantial business, and in turnover
terms it is — vehicle retail moves a great deal of money across the counter. It produces R15.4 million of
EBITDA. A 3.3 per cent margin, or roughly three cents of every rand through the till, which is why anyone
valuing a dealership off the revenue line will be badly wrong. Two things in the construction of this plan are worth
crediting. Gross margin is held at exactly 12.8 per cent in all five years, so no buying advantage or pricing
power is assumed to arrive with scale. And floor-plan interest is charged above the EBITDA line rather than below
it, which is the correct treatment for a dealer financing its own stock and makes the reported margin look worse
than the conventional presentation would. What actually drives the outcome is units and days-to-sell: R51.4 million
of inventory at cost sits against that R15.4 million of earnings.

What the revenue line does not tell you

The money crossing the counter, against the money the business keeps.

R473.7mRevenue at FY32A number that sounds like a substantial business, and in turnover terms it is. Vehicle retail moves a great deal of money across the counter.

produces

R15.4mEBITDA at FY32A 3.3% margin, after floor-plan interest. Roughly three cents of every rand through the till. This is a volume and stock-turn business, not a margin one.

Key measures

Six measures that determine whether this dealership and its funding stand up.

12.8%Gross margin, every single yearIdentical in all five years. The plan assumes no buying or pricing improvement with scale, which is a conservative and unusual choice.

3.3%FY32 EBITDA marginR473.7m of turnover produces R15.4m of EBITDA. In vehicle retail the revenue line flatters and the earnings line is the one to read.

1 465Retail units at FY32From 514. Units, not price, are the lever — gross per unit is held flat throughout.

Above EBITDAWhere floor-plan interest sitsCharged before the EBITDA line rather than below it. That is the correct treatment for a stocked dealer and it makes the margin look worse, honestly.

R51.4mVehicle inventory at cost, FY32More than three times FY32 EBITDA. Stock is the balance sheet, and days-to-sell is what turns it into earnings.

1.96xThe weakest operating DSCRIn FY30, the heaviest growth year. Cover is 3.28x in FY29 and 4.30x by FY32, so the dip is a volume-step effect.

Revenue and earnings

Revenue and EBITDA on the base case. Units sold and gross per unit are the two assumptions
that matter most, and both are stressed in Section 23.

Revenue build — units sold and the gross margin on them

FY28R139.3m · 514 units · 12.8% GM
FY29R196.1m · 692 · 12.8%
FY30R354.3m · 1 197 · 12.8%
FY31R433.1m · 1 400 · 12.8%
FY32R473.7m · 1 465 · 12.8%

Units nearly triple to 1,465 and revenue to R473.7m, but gross margin is held at exactly 12.8% in every single year. The plan makes no claim that buying or pricing improves with scale.

EBITDA after floor-plan interest, FY29 onward

FY29R2.7m · 1.4%
FY30R7.4m · 2.1%
FY31R13.3m · 3.1%
FY32R15.4m · 3.3%

FY28 runs a deficit of R2.5m. Note the scale: R473.7m of FY32 turnover produces R15.4m of EBITDA. Floor-plan interest is charged above this line, which is the correct treatment for a stocked dealer.

How to read this plan

Turnover flatters; the margin is the number

R473.7 million of revenue produces R15.4 million of EBITDA — 3.3 per cent, roughly three cents of every rand through the till. Anyone valuing this business off the revenue line will be badly wrong.

Gross margin is held flat on purpose

Exactly 12.8 per cent in all five years. The plan assumes no buying advantage or pricing power arrives with scale, which is conservative and makes the projection easier to trust.

Floor-plan interest is charged above EBITDA

The correct treatment for a dealer financing its own stock, and it makes the reported margin look worse than the usual presentation would. Most plans push that cost below the line.

Stock is the balance sheet

R51.4 million of vehicle inventory at cost against R15.4 million of EBITDA. Days-to-sell, not gross per unit, is what converts that stock into earnings.

The cover dip is a growth-step effect

Operating DSCR falls from 3.28x to 1.96x in FY30, the year units jump from 692 to 1,197, then recovers to 4.30x. Worth understanding rather than alarming.

Selected exhibits

3: Two-way sensitivity: volume and trading spread

4: Monthly inventory, floor-plan and cash, months 0–60

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