Centurion Motor Exchange Business Plan — Financial Plan

Five-year projections: revenue to R473.7m on a flat 12.8% gross margin, with EBITDA reaching R15.4m.

Section 19 of 28

Financial Plan

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Every revenue line is built from units, prices and penetration rates, not from growth percentages

The model is monthly for 60 months after a pre-launch period and is aggregated to financial years for presentation. Volumes follow a ramp curve for each site from launch to maturity, adjusted for seasonality; stock, floor-plan drawings, receivables and payables are derived from those volumes. Interest is charged on opening balances, so the model has no circularity. The key assumptions are summarised below and detailed in Appendix A.

Table 19.1: Key model assumptions (base case)

Area	Assumption	Basis
Volumes	Site 1 matures at 60 units/month; Site 2 at 52 from March 2029; ramp starts at 28% of maturity; +3% a year from FY30	Display capacity and stock-turn check (Section 7)
Seasonality	December index 0.85; January 1.08; other months 0.95–1.05	Industry monthly sales pattern
Average selling price	R245,000 ex VAT in FY28, +4.5% a year	Planned portfolio mix (Section 5)
Trading spread	14.0% of selling price before reconditioning	Below scale-trader history of 12.5–14.2% plus recon premium
Reconditioning & goodwill	R6,500 + R1,500 per unit, +4.5% a year	Service, tyres, cosmetic, roadworthy; 7-day returns
Wholesale	15% of retail units; sold at cost; R2,500 auction and transport cost per unit	Trade-ins below retail standard
F&I	65% finance penetration; commission 1.5% of amount financed; product income R3,800 and documentation fee R2,600 per unit	Market practice; amount financed = 90% of VAT-inclusive price
Payroll	Site 1 R6.3m, Site 2 R5.7m, head office R2.4m a year; +6% a year	Section 13
Commissions	R2,600 (sales) + R900 (buyers) per unit; 10% of F&I income	Market practice
Rent	Site 1 R185,000/month; Site 2 R170,000/month (FY28 terms); +7% a year	Gauteng arterial retail stands
Marketing	R65,000 per site per month + R1,400 per sale; launch R650,000 (Site 2: 70%)	Classifieds and digital rates
Other overheads	R130,000 per site per month + R28,000 professional fees; stock insurance 0.35% of inventory a year; bank charges 0.10% of revenue	Utilities, security, DMS, insurance
Working capital	45 days’ forward stock cover (minimum display 60 / 50 units); receivables 7 days; payables 20 days on recon and overheads	Section 12
Capex	Site 1 R10.9m incl. 10% contingency; Site 2 at 92% of Site 1, inflated; maintenance 0.12% of retail sales	Contractor and supplier estimates
Depreciation	Straight line: site works and building 10 years (lease term); equipment, signage, security, vehicles 5 years; furniture 6 years; IT 3 years	Useful lives
Tax	27% corporate income tax; assessed losses set off up to the greater of R1m or 80% of taxable income; paid in month 7 of the following year	Income Tax Act
Inflation	CPI 4.5%; wages 6%; rent 7%	Above the SARB 3% target, reflecting June 2026 CPI of 5.0%
Interest rates	Prime 10.50% flat; floor-plan prime + 1.5%; term loan prime + 2.0%; asset finance prime + 1.0%; overdraft prime + 2.5%	Prime after the May 2026 hike
FX	No direct foreign-currency exposure; FX effects pass through vehicle prices	Section 16
Exit	End of FY32 at 5.0x EBITDA; net debt excludes floor-plan	Section 22

Revenue grows from R139m to R474m, driven by units rather than price

Figure 1. 1: Revenue build by stream and retail units

Table 19.2: Revenue drivers and build (R million unless stated)

	FY28	FY29	FY30	FY31	FY32
Site 1 retail units	514	692	738	763	787
Site 2 retail units	–	–	459	636	678
Total retail units	514	692	1,197	1,400	1,465
Average selling price (R000, ex VAT)	245.0	256.0	267.5	279.6	292.2
Retail vehicle revenue	125.9	177.2	320.1	391.3	428.0
Wholesale units	77	104	179	210	220
Wholesale revenue	8.9	12.5	22.5	27.6	30.1
Finance commission	1.3	1.8	3.2	3.9	4.3
Value-added products	2.0	2.7	5.0	6.1	6.6
Documentation fees	1.3	1.9	3.4	4.2	4.5
Total revenue	139.3	196.1	354.3	433.1	473.7
F&I income per retail unit (R000)	8.9	9.3	9.7	10.1	10.6
Gross profit per retail unit (R000)	34.8	36.4	38.0	39.7	41.5

Unit growth accounts for most of the revenue increase: retail units rise 2.9-fold between FY28 and FY32, while the average selling price rises 19%. FY28 volumes of 514 units reflect the ramp from 25 units in March 2027 to 56 in February 2028.

EBITDA turns positive in FY29 and reaches R15.4m by FY32 at a 3.3% margin

Table 19.3: Projected income statement (R million)

	FY28	FY29	FY30	FY31	FY32
Revenue	139.3	196.1	354.3	433.1	473.7
Cost of sales	(121.5)	(170.9)	(308.8)	(377.5)	(412.9)
Gross profit	17.9	25.2	45.5	55.6	60.8
Gross margin	12.8%	12.8%	12.8%	12.8%	12.8%
Payroll	(8.7)	(9.2)	(16.2)	(17.2)	(18.2)
Commissions	(2.3)	(3.2)	(5.9)	(7.3)	(8.0)
Rent	(2.2)	(2.4)	(4.9)	(5.2)	(5.6)
Marketing	(1.5)	(1.8)	(3.5)	(4.0)	(4.3)
Occupancy, insurance, admin and bank charges	(2.1)	(2.2)	(4.3)	(4.5)	(4.8)
Pre-opening and launch costs	(2.2)	(1.7)	–	–	–
Floor-plan interest	(1.4)	(1.9)	(3.4)	(4.1)	(4.5)
Total operating expenses	(20.4)	(22.5)	(38.1)	(42.3)	(45.4)
EBITDA	(2.5)	2.7	7.4	13.3	15.4
EBITDA margin	(1.8%)	1.4%	2.1%	3.1%	3.3%
Depreciation	(1.7)	(1.7)	(3.5)	(3.4)	(3.5)
EBIT	(4.2)	0.9	3.8	9.9	11.9
Finance costs (term loan, asset finance, overdraft)	(1.0)	(0.9)	(0.9)	(0.6)	(0.3)
Profit before tax	(5.2)	–	2.9	9.3	11.7
Income tax	–	–	(0.2)	(1.7)	(3.1)
Net profit after tax	(5.2)	–	2.8	7.6	8.5
Net margin	(3.7%)	0.0%	0.8%	1.7%	1.8%

FY28 includes the pre-launch period (October 2026 – February 2027). Brackets denote costs or negative values.

Figure 3. 3: EBITDA, net profit and EBITDA margin

Operating leverage is visible but modest. Gross margin is stable at about 12.8% because the trading spread is held constant; EBITDA margin improves from 1.4% in FY29 to 3.3% in FY32 as fixed costs are spread over more units and pre-opening costs fall away. FY30 absorbs Site 2’s ramp-up, which is why its margin (2.1%) sits below FY31. The cumulative assessed loss of R5.2m created in FY28 shelters profits until FY31, when tax becomes fully payable.

Table 19.4: Tax computation (R million)

	FY28	FY29	FY30	FY31	FY32
Profit / (loss) before tax	(5.2)	–	2.9	9.3	11.7
Assessed loss brought forward	–	5.2	5.2	2.9	–
Assessed loss utilised	–	–	(2.3)	(2.9)	–
Taxable income	–	–	0.6	6.4	11.7
Tax at 27%	–	–	0.2	1.7	3.1
Assessed loss carried forward	5.2	5.2	2.9	–	–
Effective tax rate	n/m	0.0%	5.4%	18.7%	27.0%

The balance sheet balances in every month; inventory is the dominant asset

Table 19.5: Projected balance sheet at 28/29 February (R million)

	FY28	FY29	FY30	FY31	FY32
Property, plant and equipment	9.4	18.8	15.7	12.8	9.8
Vehicle inventory	18.8	29.3	42.7	47.5	51.4
Trade and other receivables	3.5	4.0	7.8	8.8	9.5
Cash and cash equivalents	4.4	5.5	3.1	10.6	19.3
Total assets	36.1	57.7	69.3	79.7	90.0
Share capital	18.0	30.0	30.0	30.0	30.0
Retained earnings / (accumulated loss)	(5.2)	(5.2)	(2.4)	5.1	13.6
Total equity	12.8	24.8	27.6	35.1	43.6
Term loan	6.0	6.0	4.0	2.0	–
Asset finance	1.7	2.8	2.2	1.5	0.7
Floor-plan facility	15.1	23.5	34.1	38.0	41.1
Overdraft	–	–	–	–	–
Trade and other payables	0.6	0.6	1.2	1.3	1.4
Current tax payable	–	–	0.2	1.7	3.1
Total liabilities	23.3	32.9	41.7	44.6	46.4
Total equity and liabilities	36.1	57.7	69.3	79.7	90.0
Balance check (assets – equity – liabilities)	0	0	0	0	0

Vehicle inventory represents 57% of total assets at FY32 and is funded 80% by the floor-plan. Accumulated losses reverse in FY31. Equity grows from R12.8m to R43.6m with no dividends paid, which is a deliberate choice: retained cash is included in exit equity value and provides liquidity headroom.

Operating cash flow is absorbed by stock growth until Site 2 matures

Table 19.6: Projected cash-flow statement (R million)

	FY28	FY29	FY30	FY31	FY32
EBITDA	(2.5)	2.7	7.4	13.3	15.4
Increase in net working capital	(21.8)	(10.9)	(16.5)	(5.7)	(4.5)
Tax paid	–	–	–	(0.2)	(1.7)
Cash flow from operations	(24.3)	(8.3)	(9.2)	7.4	9.2
Capital expenditure	(11.1)	(11.2)	(0.4)	(0.5)	(0.5)
Cash flow from investing	(11.1)	(11.2)	(0.4)	(0.5)	(0.5)
Equity subscribed	18.0	12.0	–	–	–
Floor-plan drawn / (repaid), net	15.1	8.4	10.7	3.9	3.1
Term loan drawn	6.0	–	–	–	–
Term loan repaid	–	–	(2.0)	(2.0)	(2.0)
Asset finance drawn	2.0	1.5	–	–	–
Asset finance repaid	(0.3)	(0.4)	(0.6)	(0.7)	(0.8)
Overdraft drawn / (repaid), net	–	–	–	–	–
Interest paid (excl. floor-plan)	(1.0)	(0.9)	(0.9)	(0.6)	(0.3)
Cash flow from financing	39.8	20.6	7.1	0.6	–
Net change in cash	4.4	1.2	(2.4)	7.5	8.7
Opening cash	–	4.4	5.5	3.1	10.6
Closing cash	4.4	5.5	3.1	10.6	19.3
Reconciliation to balance sheet	0	0	0	0	0

Floor-plan interest is included in EBITDA and therefore in cash flow from operations.

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

Cash flow from operations is negative until FY31 because every new unit of stock requires a 20% equity contribution. The lowest month-end cash balance is R1.9m in month 29 (July 2029), during Site 2’s ramp-up; the overdraft is not used in the base case. From FY31, with both sites mature, operations generate R7.4m and R9.2m of cash, and closing cash reaches R19.3m.

Capex is modest and mostly site fit-out; Site 2 largely repeats Site 1

Table 19.7: Capital expenditure schedule (R million, incl. 10% contingency)

Item	Site 1 (FY28)	Site 2 (FY29)	Life (yrs)	Site 1 annual depreciation
Site works, paving, lighting, drainage	2.04	2.04	10	0.20
Modular showroom and offices	3.58	3.59	10	0.36
Workshop, hoists, diagnostics, wash bay	1.82	1.82	5	0.36
IT hardware, DMS set-up, network	0.68	0.69	3	0.23
Furniture and fittings	0.53	0.53	6	0.09
Signage and branding	0.79	0.80	5	0.16
Transporter bakkie, trailer, demo/utility vehicle	1.05	1.05	5	0.21
CCTV, access control, fencing	0.46	0.46	5	0.09
Total development capex	10.93	10.98		1.70
Pre-opening costs (expensed)	2.20	1.73
Maintenance capex (FY28–FY32 total)			5	1.73

Table 19.8: Pre-opening budget, Site 1 (R million)

Item	Amount
Pre-hire salaries (two months, key staff)	0.75
Legal, licensing and professional fees	0.30
Recruitment and training	0.20
Rent during fit-out (one month)	0.19
Deposits and sundry	0.11
Launch marketing campaign	0.65
Total	2.20

Working capital, not capex, is the main use of capital

Figure 5. 5: Net working capital and its funding

Table 19.9: Working-capital schedule (R million unless stated)

	FY28	FY29	FY30	FY31	FY32
Vehicle inventory	18.8	29.3	42.7	47.5	51.4
Receivables (bank payouts, F&I income)	3.5	4.0	7.8	8.8	9.5
Payables (recon and overheads)	(0.6)	(0.6)	(1.2)	(1.3)	(1.4)
Net working capital	21.8	32.7	49.3	55.0	59.5
Floor-plan funding	(15.1)	(23.5)	(34.1)	(38.0)	(41.1)
Net working capital funded by equity / cash	6.7	9.3	15.1	16.9	18.3
Inventory days (year-end stock ÷ retail cost of sales)	61	68	54	50	49
Receivable days (on revenue)	9	8	8	7	7
Payable days (on total cost of sales)	2	1	1	1	1
Cash conversion cycle (days)	69	74	61	56	55

Year-end inventory days exceed the 45-day operating target in FY28 and FY29 for two structural reasons: the minimum display floor holds more stock than early sales volumes require, and at the end of FY29 Site 2’s 50-unit opening stock is on the books with no sales yet. Once both sites are mature, inventory days settle at about 49 on a trailing basis. Vehicle purchases are paid on transfer, so supplier credit does little to offset stock. The implication for growth is direct: each additional R10m of annual retail sales ties up roughly R0.2m of equity in stock, and each additional day of stock cover costs about R0.21m of equity at FY32 scale.

Site 1 breaks even at c. 46 units a month

Table 19.10: Break-even analysis, Site 1 including central overhead, FY29

Measure	Value
Revenue per retail unit (incl. wholesale and F&I)	R283,323
Gross profit per retail unit	R36,363
Variable selling costs per unit (commissions, variable marketing)	R6,100
Contribution per unit	R30,263
Contribution margin (on revenue)	10.7%
Fixed costs incl. head office and floor-plan interest	R16.5m
Break-even units per year (per month)	547 (46)
Break-even revenue	R154.8m
Planned FY29 units (per month)	692 (58)
Margin of safety	21.0%
Sustained monthly EBITDA break-even	Month 6 (August 2027)

Figure 6. 6: Break-even chart, Site 1, FY29

Floor-plan interest is treated as fixed in this analysis because the display floor sets a minimum stock level. Project-level cash payback, the point at which cumulative operating and investing cash flow turns positive, falls beyond FY32, because working capital grows with the business; equity investors are therefore repaid through exit value rather than distributions within the plan period.