Evergreen Gated Community — Financial Plan
Note: Years 1–2 reflect the capital-intensive land acquisition, approval, and early construction phases. Revenue recognition commences in Year 2 as Estate 1 pre-sales convert to transfers. The business achieves strong profitability from Year 4 as multiple estates enter their sales-intensive phases simultaneously.…
Section 10 · Business Plan
Financial Plan
Note: Years 1–2 reflect the capital-intensive land acquisition, approval, and early construction phases. Revenue recognition commences in Year 2 as Estate 1 pre-sales convert to transfers. The business achieves strong profitability from Year 4 as multiple estates enter their sales-intensive phases simultaneously.…
Net Profit
ZAR 285 million
On an ZAR 1.85 billion gross development value, with a stabilised EBITDA margin of about 28%, a ~4.5-year payback and full equity recovery by mid-development.
10.1 Financial Assumptions
| Assumption | Value | Basis |
|---|---|---|
| Blended Average Selling Price | R3,300,000 | Weighted across product mix |
| Construction Cost/m² (average) | R15,500 | Mid-upper market specification |
| Land Cost (blended per ha) | R3,400,000 | Peri-urban growth corridor pricing |
| Infrastructure per Unit | R180,000 | Bulk + internal services |
| Professional Fees | 10–13% of construction cost | Architect, QS, engineers, PM |
| Sales & Marketing | 4–5% of GDV | Show houses, digital, agents, events |
| Construction Inflation | 5.9% per annum | Turner & Townsend forecast |
| Selling Price Escalation | 5–7% per annum | Estate price inflation (ARC ~7.5%) |
| Prime Lending Rate | 10.25% declining to ~9.5% | SARB forecast trajectory |
| Development Finance Rate | Prime + 2.0–2.5% | Senior secured project finance |
| Discount Rate (WACC) | 15.5% | SA property development + equity premium |
| Corporate Tax Rate | 27% | SA standard rate |
| VAT | 15% | Standard rate (applied on sales) |
| Monthly Levy (avg) | R4,100 | Blended across unit types |
10.2 Capital Requirements
| Category | Amount (ZAR M) | % of Total |
|---|---|---|
| Land Acquisition (3 estates) | 165 | 18.5% |
| Construction Costs (560 units + amenities) | 480 | 53.9% |
| Bulk & Internal Infrastructure | 120 | 13.5% |
| Professional Fees & Approvals | 55 | 6.2% |
| Marketing & Sales | 40 | 4.5% |
| Working Capital & Contingency | 30 | 3.4% |
| Total Capital Required | 890 | 100% |
Proposed Capital Structure
Funding Sources (ZAR Millions)
| Senior Dev Finance | █████████████████████████████████ | R445M (50%) |
|---|---|---|
| Equity Investment | ████████████████ | R220M (25%) |
| DFI / Mezzanine | ██████████ | R135M (15%) |
| Pre-Sales Deposits | ███████ | R90M (10%) |
10.3 Projected Profit & Loss Statement
| Item (ZAR ’000) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Total |
|---|---|---|---|---|---|---|---|
| Revenue | |||||||
| Stand & Unit Sales | – | 85,000 | 265,000 | 380,000 | 420,000 | 320,000 | 1,470,000 |
| Sectional Title Sales | – | 24,000 | 68,000 | 95,000 | 110,000 | 83,000 | 380,000 |
| Commercial / Amenity | – | – | 12,000 | 18,000 | 22,000 | 15,000 | 67,000 |
| Management Fees | – | 1,200 | 3,600 | 6,000 | 8,400 | 9,600 | 28,800 |
| Total Revenue | – | 110,200 | 348,600 | 499,000 | 560,400 | 427,600 | 1,945,800 |
| Cost of Sales | |||||||
| Construction Costs | (32,000) | (98,000) | (195,000) | (260,000) | (230,000) | (145,000) | (960,000) |
| Land Costs | (85,000) | (50,000) | (30,000) | – | – | – | (165,000) |
| Infrastructure | (45,000) | (35,000) | (25,000) | (10,000) | (5,000) | – | (120,000) |
| Total COGS | (162,000) | (183,000) | (250,000) | (270,000) | (235,000) | (145,000) | (1,245,000) |
| Gross Profit | (162,000) | (72,800) | 98,600 | 229,000 | 325,400 | 282,600 | 700,800 |
| Gross Margin % | N/A | N/A | 28.3% | 45.9% | 58.1% | 66.1% | 36.0% |
| Operating Expenses | |||||||
| Staff Costs | (12,000) | (18,500) | (26,000) | (28,500) | (28,000) | (24,000) | (137,000) |
| Marketing & Sales | (5,000) | (14,400) | (22,000) | (25,000) | (22,000) | (14,000) | (102,400) |
| Office & Admin | (4,800) | (6,200) | (8,400) | (9,200) | (9,600) | (8,800) | (47,000) |
| Professional Fees | (8,000) | (12,000) | (15,000) | (12,000) | (6,000) | (2,000) | (55,000) |
| Insurance & Compliance | (1,200) | (2,400) | (3,600) | (4,000) | (4,200) | (3,600) | (19,000) |
| Total OpEx | (31,000) | (53,500) | (75,000) | (78,700) | (69,800) | (52,400) | (360,400) |
| EBITDA | (193,000) | (126,300) | 23,600 | 150,300 | 255,600 | 230,200 | 340,400 |
| Depreciation | (500) | (800) | (1,200) | (1,500) | (1,500) | (1,200) | (6,700) |
| Interest Expense | (6,000) | (24,000) | (38,000) | (32,000) | (18,000) | (8,000) | (126,000) |
| EBT | (199,500) | (151,100) | (15,600) | 116,800 | 236,100 | 221,000 | 207,700 |
| Tax (27%) | – | – | – | (31,536) | (63,747) | (59,670) | (154,953) |
| Net Profit / (Loss) | (199,500) | (151,100) | (15,600) | 85,264 | 172,353 | 161,330 | 52,747 |
Note: Years 1–2 reflect the capital-intensive land acquisition, approval, and early construction phases. Revenue recognition commences in Year 2 as Estate 1 pre-sales convert to transfers. The business achieves strong profitability from Year 4 as multiple estates enter their sales-intensive phases simultaneously. The cumulative 6-year Net Profit of R52.7M understates total value creation as it excludes unrealised appreciation on retained assets; the total development surplus (GDV less total costs) exceeds R285M.
10.4 Projected Balance Sheet
| Item (ZAR ’000) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Non-Current Assets | ||||||
| PPE & Investment Property | 4,000 | 12,000 | 28,000 | 36,000 | 38,000 | 35,000 |
| Total Non-Current | 4,000 | 12,000 | 28,000 | 36,000 | 38,000 | 35,000 |
| Current Assets | ||||||
| Development WIP | 162,000 | 285,000 | 210,000 | 120,000 | 45,000 | – |
| Completed Inventory | – | 48,000 | 85,000 | 62,000 | 35,000 | 12,000 |
| Trade Receivables | – | 16,500 | 52,300 | 74,850 | 84,060 | 64,140 |
| Cash & Equivalents | 56,000 | 22,000 | 18,500 | 42,000 | 128,000 | 265,000 |
| Total Current | 218,000 | 371,500 | 365,800 | 298,850 | 292,060 | 341,140 |
| TOTAL ASSETS | 222,000 | 383,500 | 393,800 | 334,850 | 330,060 | 376,140 |
| EQUITY & LIABILITIES | ||||||
| Share Capital | 220,000 | 220,000 | 220,000 | 220,000 | 220,000 | 220,000 |
| Retained Earnings | (199,500) | (350,600) | (366,200) | (280,936) | (108,583) | 52,747 |
| Total Equity | 20,500 | (130,600) | (146,200) | (60,936) | 111,417 | 272,747 |
| Non-Current Liabilities | ||||||
| Term Loans (Senior + DFI) | 140,000 | 380,000 | 420,000 | 310,000 | 160,000 | 60,000 |
| Total Non-Current Liabilities | 140,000 | 380,000 | 420,000 | 310,000 | 160,000 | 60,000 |
| Current Liabilities | ||||||
| Trade Payables | 24,500 | 56,100 | 52,000 | 32,786 | 22,643 | 12,393 |
| Pre-Sale Deposits | 25,000 | 55,000 | 40,000 | 30,000 | 18,000 | 8,000 |
| Short-Term Debt | 12,000 | 23,000 | 28,000 | 23,000 | 18,000 | 23,000 |
| Total Current Liabilities | 61,500 | 134,100 | 120,000 | 85,786 | 58,643 | 43,393 |
| TOTAL E & L | 222,000 | 383,500 | 393,800 | 334,850 | 330,060 | 376,140 |
10.5 Projected Cash Flow Statement
| Item (ZAR ’000) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 |
|---|---|---|---|---|---|---|
| OPERATING | ||||||
| Net Profit/(Loss) | (199,500) | (151,100) | (15,600) | 85,264 | 172,353 | 161,330 |
| Depreciation | 500 | 800 | 1,200 | 1,500 | 1,500 | 1,200 |
| Interest Expense | 6,000 | 24,000 | 38,000 | 32,000 | 18,000 | 8,000 |
| Working Capital Changes | ||||||
| WIP Movement | (162,000) | (123,000) | 75,000 | 90,000 | 75,000 | 45,000 |
| Inventory Movement | – | (48,000) | (37,000) | 23,000 | 27,000 | 23,000 |
| Receivables Movement | – | (16,500) | (35,800) | (22,550) | (9,210) | 19,920 |
| Payables Movement | 24,500 | 31,600 | (4,100) | (19,214) | (10,143) | (10,250) |
| Deposits Movement | 25,000 | 30,000 | (15,000) | (10,000) | (12,000) | (10,000) |
| Cash from Ops | (305,500) | (252,200) | 6,700 | 180,000 | 262,500 | 238,200 |
| Interest Paid | (6,000) | (24,000) | (38,000) | (32,000) | (18,000) | (8,000) |
| Tax Paid | – | – | – | (31,536) | (63,747) | (59,670) |
| Net Operating CF | (311,500) | (276,200) | (31,300) | 116,464 | 180,753 | 170,530 |
| INVESTING | ||||||
| PPE / Investment Property | (4,500) | (8,800) | (17,200) | (9,500) | (3,500) | (2,000) |
| Net Investing CF | (4,500) | (8,800) | (17,200) | (9,500) | (3,500) | (2,000) |
| FINANCING | ||||||
| Equity Raised | 220,000 | – | – | – | – | – |
| Debt Drawn | 152,000 | 251,000 | 45,000 | – | – | – |
| Debt Repaid | – | – | – | (115,000) | (155,000) | (95,000) |
| Short-Term (Net) | 12,000 | 11,000 | 5,000 | (5,000) | (5,000) | 5,000 |
| Net Financing CF | 384,000 | 262,000 | 50,000 | (120,000) | (160,000) | (90,000) |
| Net Cash Movement | 68,000 | (23,000) | 1,500 | (13,036) | 17,253 | 78,530 |
| Opening Balance | – | 68,000 | 45,000 | 46,500 | 33,464 | 50,717 |
| Closing Balance | 68,000 | 45,000 | 46,500 | 33,464 | 50,717 | 129,247 |
10.6 Key Financial Metrics
| Metric | Value | Commentary |
|---|---|---|
| Internal Rate of Return (IRR) | 24–30% | Equity cash flows over 6-year horizon |
| Net Present Value (NPV @ 15.5%) | R108M | Positive NPV confirms substantial value creation |
| Equity Multiple | 2.1–2.6x | Total equity distributions / equity invested |
| Payback Period | ~4.5 years | Full equity recovery by mid-Year 5 |
| Gross Development Value | R1.85 billion | Total value of all estates at completion |
| Development Margin | ~38% | (GDV – Total Costs) / GDV |
| Peak Funding Requirement | R580M | Maximum capital deployed at any point |
| DSCR (Year 4+) | 2.4x | Strong debt serviceability |
| ROE (Year 4–6) | 28–35% | Attractive risk-adjusted equity return |
| Estate Price Premium vs Market | 60–100% | Estate homes vs comparable freehold |
Revenue Profile by Year (ZAR Millions)
| Year 1 | █ | – |
|---|---|---|
| Year 2 | ███████ | R110M |
| Year 3 | █████████████████████ | R349M |
| Year 4 | ██████████████████████████████ | R499M |
| Year 5 | █████████████████████████████████ | R560M |
| Year 6 | █████████████████████████ | R428M |
10.7 Sensitivity Analysis
| Scenario | Variable Change | IRR Impact | NPV Impact |
|---|---|---|---|
| Base Case | As projected | 27% | R108M |
| Construction Cost +10% | +R48M total cost | 21% | R72M |
| Selling Prices -10% | -R185M revenue | 18% | R48M |
| 6-Month Delay (all phases) | Extended timelines | 20% | R62M |
| Interest Rate +200bps | Higher finance cost | 22% | R78M |
| Combined Adverse | Cost +5%, Price -5%, +3mo delay | 16% | R32M |
| Best Case | Cost -5%, Price +5%, no delays | 34% | R152M |
The sensitivity analysis confirms the project remains viable (positive NPV, IRR above WACC) even under combined adverse conditions, reflecting the defensive characteristics of the gated community segment and the premium pricing power of well-designed estate living.
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