Crownstone College Group Business Plan — Financial Plan

This section and the four that follow present a complete, internally consistent financial model. The modelling philosophy is disciplined and transparent: the sponsor’s revenue and EBITDA targets are preserved exactly, while every line below EBITDA, depreciation, financing cost, taxation and returns, is independently re-derived from first principles. The balance sheet is constructed to tie in every year, and the cash flow reconciles to the movement in cash. Where our figures differ from the sponsor’s, we disclose the variance openly rather than smoothing it away. Above all, the model treats the enrolment ramp as the central driver and presents the returns over the full 15-year horizon on which the value depends.

Key performance indicators to monitor

Lenders and equity investors will track a defined set of indicators through the establishment and ramp period. The dashboard below sets out the metrics, their purpose, and the modelled trajectory, the same measures against which drawdowns, covenants and board reporting should be structured.

Indicator	What it signals	Modelled trajectory
Enrolled learners	The ramp — the core driver	650 → 1,800 by Year 5, toward 2,800
Capacity utilisation	Fixed-cost absorption	23% → 64% by Year 5, toward 100%
EBITDA margin	Operating leverage	–8% → 19% by Year 5, toward ~32%
Blended fee / learner	Revenue quality	~R238k → R322k (+6% p.a.)
DSCR	Debt serviceability	Below 1.0x through Years 1–3 — key risk
Cash balance	Liquidity through the build	Positive but thins to ~R64m in Year 4
Break-even enrolment	Path to profitability	~1,500 learners — reached Year 4
Net profit	Absolute profitability	Loss to Year 4; positive from Year 5

Financial performance at a glance

The dashboard below summarises the model’s headline outputs across the five-year projection. It captures the plan’s essential arc: a capital-intensive campus-build and cash-consumptive early years giving way to a rising margin and profitability as enrolment fills the campus toward its 2,800-learner maturity.

Metric	Year 1	Year 3	Year 5
Revenue (R m)	155	336	580
EBITDA (R m)	-13	43	110
EBITDA margin	-8.4%	12.8%	19.0%
Net profit (R m)	-47	-31	28
Enrolled learners	650	1,200	1,800
Utilisation	23%	43%	64%
DSCR (x)	-0.74x	1.02x	1.35x
ROCE	-2.6%	1.0%	6.5%

Revenue by stream at maturity

The revenue base is deliberately diversified across nine streams, so that no single line dominates and boarding, commercial and executive revenue cushion term-time tuition. The breakdown below applies the target revenue mix to the Year-5 revenue of R580m.

Revenue stream	Share	Year-5 revenue (R m)
Tuition fees	58%	336
Boarding fees	18%	104
Sports & academies	6%	35
Executive education	4%	23
School shop	3%	17
Facility rentals	3%	17
Online academy	3%	17
Donations & endowment	3%	17
Other income	2%	12
Total	100%	580

Figure 16. *Revenue mix at maturity by stream*

Key modelling assumptions

Assumption	Value	Basis
Student capacity	2,800 learners	55-hectare campus
Enrolment ramp (Y1→Y5)	650 → 1,800	Full capacity ~Year 9
Fee increase	~6% p.a.	Premium-tier fee growth
Blended fee / learner	~R238k → R322k	Premium day + boarding band
Depreciation	Straight-line by vintage	Campus assets from commissioning — no J-curve in the assets
Funding mix	Equity R500m / DFI R250m / Bank R100m	~41% gearing
Cost of debt	10%	Sponsor / DFI-blended assumption
Working capital	~5% of revenue	Fees largely paid in advance — modest
Corporate tax	27%	With 80% assessed-loss set-off cap
Investment horizon	15 years	Long-duration campus asset
Exit multiple	11.0x EV/EBITDA	Listed education-sector comparable (Curro / ADvTECH)

Sources and uses

Uses of funds	R m	Sources of funds	R m
Land acquisition	120	Equity investment	500
Academic buildings	260	Development finance	250
Boarding facilities	130	Commercial bank debt	100
Sports complex	95
Arts centre	40
ICT infrastructure	55
Furniture & equipment	45
Working capital	65
Contingency	40
Total uses	850	Total sources	850

Figure 17. *Funding structure at financial close*

NoteA conservative capital structure — but the early cash call is real

At ~41% gearing the structure is conservative, and equity leads the drawdown. But the R850m raise must fund not only the campus but the cash-consumptive early years, the R40m contingency and R65m working capital are the visible buffers, and the model holds cash positive throughout. Prudence demands a committed standby facility on top: sector peers have repeatedly returned to shareholders for more capital when enrolment ramped slower than planned, and Crownstone should be financed to survive a slower ramp without an emergency raise.

Alignment with investor and development-finance mandates

The transaction is structured for a blend of equity, development finance and commercial bank debt, and its features map directly onto the mandates of each. For development-finance institutions, the plan delivers education access, 420 permanent jobs, teacher and youth skills development, scholarships and B-BBEE participation, all core social-infrastructure objectives. For equity investors, it offers a scarce, appreciating campus asset, resilient premium demand, and a long-duration, terminal-value-driven return. For commercial lenders, it provides collateral-grade real-estate security with asset cover well above the debt quantum. The long horizon and patient return profile suit precisely the patient, mandate-driven capital the Group targets.

Peer economics — a reality check on the ramp

The listed comparables discipline the plan’s assumptions. Curro and ADvTECH demonstrate that premium school economics work at scale, but also that the ramp is capital-hungry and non-linear. Crownstone’s single-campus plan is modest against their networks, which makes the enrolment task more concentrated (one campus to fill) but the execution more controllable (one site, one management team). The table frames the comparison.

Dimension	Curro	ADvTECH	Crownstone (plan)
Model	Low-fee to premium network	Premium brands + tertiary	Single premium campus
Scale	70,000+ learners	~40,000 learners	2,800 at maturity
Ramp lesson	Six rights issues since listing	Steady, disciplined growth	Fund for a slower ramp
Relevance	Scalability & capital risk	Premium comparable	Concentrated, controllable