Revenue and the EBITDA margin follow the sponsor’s five-year outlook exactly; depreciation, interest, tax and net profit are independently derived. The defining feature is the J-curve: because the model carries a heavy depreciation and interest burden from the capital-intensive build, net profit is negative through Year 4 before turning positive in Year 5 as revenue and margin scale. This is characteristic of healthcare infrastructure and is disclosed plainly rather than smoothed.
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|---|---|---|---|---|---|
|
Revenue |
180 |
320 |
500 |
760 |
1,100 |
|
Operating expenses |
-166 |
-272 |
-400 |
-585 |
-825 |
|
EBITDA |
14 |
48 |
100 |
175 |
275 |
|
EBITDA margin |
8.0% |
15.0% |
20.0% |
23.0% |
25.0% |
|
Less: depreciation |
-33 |
-53 |
-74 |
-95 |
-117 |
|
EBIT |
-19 |
-5 |
26 |
80 |
158 |
|
Less: net interest |
-17 |
-49 |
-78 |
-96 |
-99 |
|
Profit before tax |
-36 |
-54 |
-51 |
-16 |
59 |
|
Less: taxation |
-0 |
-0 |
-0 |
-0 |
-3 |
|
Net profit after tax |
-36 |
-54 |
-51 |
-16 |
56 |
|
Net margin |
-20.0% |
-16.9% |
-10.3% |
-2.1% |
5.1% |
NoteA capital-intensive P&L — heavy depreciation and a genuine J-curve
Because each facility is a major, long-life asset (a R420 million building plus R110 million of equipment for the flagship alone), depreciation ramps to over R110 million a year by Year 5, and interest on the development debt is substantial through the build. The result is that EBIT and net profit lag EBITDA sharply, and the business is loss-making through Year 4. This is the honest signature of healthcare infrastructure: strong operating cash generation (EBITDA) masked, in the early years, by the depreciation and financing cost of the build. The value accrues as the assets fill and the network matures, much of it beyond the five-year window.
The build underlies the trajectory
Revenue follows the centre rollout and the occupancy ramp: the flagship opens in Year 1, one further centre opens each year, and bed occupancy climbs from about 62% to 86% as referral relationships mature. The EBITDA margin ramps from 8% to 25% as fixed facility and central costs are spread over rising volume and as therapy throughput scales. The chart below shows the EBITDA and margin build that underpins the P&L.
Clinical volumes underpin the revenue
The revenue build rests on clinical volumes ramping with the network: transitional-care admissions and rehabilitation therapy sessions rising toward roughly 60,000 sessions a year at scale. Therapy throughput in particular is gated by therapist capacity, the binding constraint, which is why the workforce and technology-assisted rehabilitation are so central to delivering the revenue.
