Centurion Motor Exchange Business Plan — Debt Serviceability
Operating debt service cover across the projection, and the floor-plan interest charged above EBITDA.
Section 21 of 28
Debt Serviceability
Jump to section
- 1. Executive Summary
- 2. Investment Thesis
- 3. Company Overview
- 4. Problem, Customer Need and Value Proposition
- 5. Products and Services
- 6. Industry Analysis
- 7. Market Analysis
- 8. Customer Analysis
- 9. Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model
- 13. Management and Organisation
- 14. Strategic Plan
- 15. SWOT Analysis
- 16. Risk Analysis
- 17. ESG and Sustainability
- 18. Implementation Roadmap
- 19. Financial Plan
- 20. Funding Requirement and Structure
- 21. Debt Serviceability
- 22. Investment Case and Valuation
- 23. Sensitivity and Scenario Analysis
- 24. KPIs and Management Dashboard
- 25. Conclusion
- A. Appendix A: Scenario Parameters
- B. Appendix B: Year-1 Monthly Projections
- C. Appendix C: Sources and Glossary
Base-case operating DSCR never falls below 1.96x; term debt is repaid by FY32
Table 21.1: Debt service coverage (R million)
|
FY28 |
FY29 |
FY30 |
FY31 |
FY32 |
|
|---|---|---|---|---|---|
|
EBITDA |
(2.5) |
2.7 |
7.4 |
13.3 |
15.4 |
|
Add back: pre-opening costs (equity-funded) |
2.2 |
1.7 |
– |
– |
– |
|
Less: tax paid |
– |
– |
– |
(0.2) |
(1.7) |
|
Less: maintenance capex |
(0.2) |
(0.2) |
(0.4) |
(0.5) |
(0.5) |
|
Cash flow available for debt service (operating) |
(0.5) |
4.2 |
7.0 |
12.6 |
13.1 |
|
Interest: term loan and asset finance |
1.0 |
0.9 |
0.9 |
0.6 |
0.3 |
|
Principal: term loan and asset finance |
0.3 |
0.4 |
2.6 |
2.7 |
2.8 |
|
Total debt service |
1.3 |
1.3 |
3.6 |
3.3 |
3.1 |
|
Operating DSCR (covenant ≥ 1.30x) |
n/t |
3.28x |
1.96x |
3.82x |
4.30x |
|
Memo: cash DSCR after working capital and floor-plan |
n/t |
2.63x |
0.31x |
3.27x |
3.84x |
|
Interest cover (EBITDA ÷ finance costs) |
neg. |
2.90x |
7.93x |
22.02x |
57.76x |
|
Net debt / EBITDA (covenant ≤ 2.5x) |
n/m |
1.23x |
0.42x |
net cash |
net cash |
|
Net debt / (net cash), excl. floor-plan |
3.3 |
3.3 |
3.1 |
(7.1) |
(18.6) |
n/t = not tested: FY28 falls within the capital moratorium, and interest is met from the funded cash reserve. Covenants are tested from FY29.
Table 21.2: Debt roll-forward (R million)
|
FY28 |
FY29 |
FY30 |
FY31 |
FY32 |
|
|---|---|---|---|---|---|
|
Term loan: opening |
– |
6.0 |
6.0 |
4.0 |
2.0 |
|
Drawn |
6.0 |
– |
– |
– |
– |
|
Repaid |
– |
– |
(2.0) |
(2.0) |
(2.0) |
|
Term loan: closing |
6.0 |
6.0 |
4.0 |
2.0 |
– |
|
Interest |
0.8 |
0.8 |
0.6 |
0.4 |
0.1 |
|
Asset finance: opening |
– |
1.7 |
2.8 |
2.2 |
1.5 |
|
Drawn |
2.0 |
1.5 |
– |
– |
– |
|
Repaid |
(0.3) |
(0.4) |
(0.6) |
(0.7) |
(0.8) |
|
Asset finance: closing |
1.7 |
2.8 |
2.2 |
1.5 |
0.7 |
|
Interest |
0.2 |
0.2 |
0.3 |
0.2 |
0.1 |
|
Floor-plan: closing |
15.1 |
23.5 |
34.1 |
38.0 |
41.1 |
|
Floor-plan interest (in EBITDA) |
1.4 |
1.9 |
3.4 |
4.1 |
4.5 |
Two caveats are material. First, the cash DSCR falls to 0.31x in FY30 because Site 2’s stock build absorbs operating cash; debt service that year is met from Tranche B and the cash reserve rather than from operations, and lenders should size their covenant definitions accordingly. Second, in the downside the operating DSCR is 0.63x–0.92x in every tested year, a covenant breach from FY29 onward that would require a waiver, re-profiled repayments or additional equity. Debt capacity is therefore limited in the early years: at a 1.30x covenant, FY29 operating cash flow supports only about R3.2m of annual debt service, whereas by FY32 it supports about R10.1m, enough to refinance a third site with debt.