HarmonyBridge Children's Health & Rehabilitation Centres Business Plan — Financial Plan & Projections

15.1 Basis of preparation

Sponsor headline revenue and EBITDA margin are preserved exactly as briefed, and EBITDA is derived as revenue multiplied by margin. Everything beneath EBITDA is independently re-derived: component depreciation from the capital-expenditure register (facilities and buildings on a 20-year life, medical equipment 8-year and digital systems 5-year), interest on healthcare term debt at 13.0% (prime plus 250 basis points), 27% South African corporate tax with assessed-loss carry-forward, and working capital. Consistent with the invitation to structure the raise across funding rounds, the plan is funded through a R700 million Series A (Year 1) and a R600 million Series B (Year 3), each blending equity and term debt (R830 million equity and R470 million debt in total). Capital expenditure is phased across the rollout. The three statements integrate and the balance sheet ties to zero every year, enforced by an automated assertion. All figures are nominal rand millions unless stated.

15.2 Key assumptions

Assumption	Value	Basis
Corporate tax rate	27%	SA rate; assessed losses carried forward
Healthcare term-debt rate	13.0%	Prime 10.5% + 250bps; secured on facilities
Funding	R830m equity + R470m debt	Series A R700m + Series B R600m
Depreciation	Component approach	Facilities 20-yr; medical equipment 8-yr; digital 5-yr
Working capital	11% of revenue	Medical-scheme & government receivables (slow)
Capacity	120 → 600 beds; 1 → 7 centres	Occupancy 62% → 82%
Repo / prime	7.0% / 10.5%	SARB, mid-2026
Exit valuation	8×–12× EV/EBITDA	Hospital-group / healthcare comparables

Analyst flagThe healthcare-infrastructure J-curve: early losses during the build and ramp

Preserving revenue and EBITDA margin exactly, the fully-loaded model produces net profit of approximately −R60m, −R31m, −R41m, +R27m and +R114m across Years 1–5. The Year 1–3 losses are depreciation and interest: the flagship and subsequent centres carry full depreciation and financing while occupancy ramps (the Series-B build in Year 3 re-deepening the trough with new depreciation and interest), before the network reaches the scale and occupancy at which it turns strongly profitable. This J-curve is normal for a hospital-network build; it is disclosed rather than smoothed, and it is why the funding structure, grace period and liquidity buffer matter.

Figure 13. *The healthcare-infrastructure J-curve: EBITDA vs net profit.*

15.3 Projected profit & loss

R millions	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	180	320	500	760	1100
EBITDA	14.4	48.0	100.0	174.8	275.0
Depreciation	(41.8)	(46.9)	(80.1)	(87.1)	(101.8)
EBIT	(27.4)	1.1	19.9	87.7	173.3
Interest (term debt)	(32.5)	(32.5)	(61.1)	(61.1)	(56.2)
Profit before tax	(59.9)	(31.4)	(41.2)	26.6	117.0
Taxation (27%)	0.0	0.0	0.0	0.0	(3.0)
Net profit after tax	(59.9)	(31.4)	(41.2)	26.6	114.0
Net margin	(33.2%)	(9.8%)	(8.2%)	3.5%	10.4%

Figure 14. *EBITDA and margin trajectory.*

Figure 15. *Illustrative operating economics (per R100 of revenue, at scale).*

15.4 Projected cash flow statement

R millions	Year 1	Year 2	Year 3	Year 4	Year 5
EBITDA	14.4	48.0	100.0	174.8	275.0
Taxation paid	0.0	0.0	0.0	0.0	(3.0)
Working-capital movement	(19.8)	(15.4)	(19.8)	(28.6)	(37.4)
Operating cash flow	(5.4)	32.6	80.2	146.2	234.6
Capital expenditure	(565)	(35)	(470)	(50)	(180)
Interest paid	(32.5)	(32.5)	(61.1)	(61.1)	(56.2)
Debt drawn / (repaid)	250.0	0.0	220.0	(37.6)	(34.6)
Equity raised (Series A / B)	450	0	380	0	0
Closing cash	97.1	62.2	211.3	208.8	172.6

Analyst flagLiquidity through the ramp depends on the two rounds and a grace period

Operating cash flow is thin in the early ramp, and capex and interest are heavy, so the two funding rounds and a debt grace period are essential to liquidity: closing cash is held above roughly R60m throughout, supported by the Series A and the Series B in Year 3. An interest-only period on the term debt through construction and early ramp, and committed follow-on capital, should be treated as conditions of a prudent structure given the depth and length of the J-curve.

Figure 16. *Operating cash flow, capex and closing cash.*

Figure 17. *Two-round funding: equity and term debt.*

15.5 Projected balance sheet

R millions	Year 1	Year 2	Year 3	Year 4	Year 5
Net PP&E (facilities & equipment)	523	511	901	864	942
Net working capital	19.8	35.2	55.0	83.6	121.0
Cash & equivalents	97.1	62.2	211.3	208.8	172.6
Total assets	640	609	1168	1157	1236
Term debt	250	250	470	432	398
Share capital (Series A + B)	450	450	830	830	830
Retained earnings / (deficit)	(59.9)	(91.2)	(132.4)	(105.9)	8.1
Total equity	390.1	358.8	697.5	724.1	838.1
Total funding	640	609	1168	1157	1236

StrengthThe balance sheet ties to zero every year

Total assets equal term debt plus equity in every projection year, enforced by an automated assertion (maximum difference: 0.0). The early retained-earnings deficit from the J-curve is fully funded by the two equity rounds, and the debt is secured against the facilities it finances, a fully-integrated, self-consistent three-statement model that finances its own build-and-ramp curve.

Figure 18. *Balance-sheet build: asset composition.*

15.7 Asset productivity and payer detail

Two further lenses support the projections. Revenue per operational bed rises as occupancy, case mix and the outpatient, home-care and specialist-clinic streams leverage the fixed asset base, the core driver of the margin expansion. And the payer detail shows how the hybrid model diversifies revenue across medical schemes, government, private patients and ancillary streams as the network matures.

Figure 19. *Revenue per operational bed — asset productivity.*

Payer / stream (R m)	Year 1	Year 2	Year 3	Year 4	Year 5
Medical aid payments	68	125	200	304	440
Government contracts	32	61	100	152	220
Private patients	27	48	75	114	165
Home healthcare	16	26	40	61	88
Total revenue	180	320	500	760	1100

15.6 Key financial ratios & debt cover

The ratio summary distils the plan’s trajectory: the EBITDA margin expanding from 8% to 25% as occupancy and scale mature, net margin crossing into positive territory from Year 4, and debt-service cover strengthening from a sub-1.0× ramp trough to comfortable levels as EBITDA grows.

Ratio	Year 1	Year 2	Year 3	Year 4	Year 5
EBITDA margin	8.0%	15.0%	20.0%	23.0%	25.0%
Net margin	(33.2%)	(9.8%)	(8.2%)	3.5%	10.4%
DSCR (x)	0.44×	1.48×	1.64×	1.77×	3.03×
Net debt / EBITDA (x)	10.6×	3.9×	2.6×	1.3×	0.8×
Occupancy	62.0%	70.0%	74.0%	78.0%	82.0%

HarmonyBridge Children’s Health & Rehabilitation Centres Business Plan — Financial Plan & Projections