HealthPlus Pharmacy Group — Financial Plan
Key financial assumptions, the capital-expenditure schedule, projected income statement, balance sheet and cash flow, break-even, return-on-investment analysis and the funding structure.
Section 9 · Business Plan
Financial Plan
Key financial assumptions, the capital-expenditure schedule, projected income statement, balance sheet and cash flow, break-even, return-on-investment analysis and the funding structure.
9.1 Key Financial Assumptions
The financial projections are built on a detailed, bottom-up
financial model with the following key assumptions:
| Assumption | Value | Basis |
|---|---|---|
| Revenue per Store (Year 1) | ZAR 16M | Based on comparable pharmacy store ramp-up curves |
| Revenue Growth Rate (Same-Store) | 8–12% p.a. | Aligned with industry CAGR and inflation |
| Gross Margin (Blended) | 34–38% | Dispensary ~28%, Front-shop ~40%, Private Label ~55% |
| Dispensary Revenue Share | 25–30% | Declining share as front-shop and private label grow |
| CAPEX per Store (Fit-Out) | ZAR 8–12M | Includes shopfitting, fixtures, signage, IT infrastructure |
| Initial Inventory per Store | ZAR 5–7M | Based on 60-day stock cover across all categories |
| Occupancy Cost (% Revenue) | 8–10% | Market-rate mall rentals, Gauteng tier-1 centres |
| Staff Cost (% Revenue) | 14–16% | Including pharmacists, retail staff, clinic nurses |
| Marketing Spend (% Revenue) | 3–4% | Higher in launch year, normalising in Year 3+ |
| Corporate Tax Rate | 27% | Standard SA corporate income tax rate |
| Inflation (CPI) | 5.0% | SA Reserve Bank medium-term target |
| Working Capital Cycle | 45–60 days | Inventory days less creditor days |
9.2 Capital Expenditure Schedule
| Item | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total |
|---|---|---|---|---|---|---|
| Store Fit-Out | 30.0 | 40.0 | 50.0 | 60.0 | 70.0 | 250.0 |
| IT & Technology | 8.0 | 3.0 | 4.0 | 3.0 | 3.0 | 21.0 |
| Initial Inventory | 18.0 | 20.0 | 25.0 | 30.0 | 35.0 | 128.0 |
| Distribution Centre | – | – | 15.0 | 5.0 | – | 20.0 |
| Working Capital | 6.0 | 5.0 | 6.0 | 7.0 | 8.0 | 32.0 |
| Corporate Setup | 3.0 | 1.0 | 1.0 | 1.0 | 1.0 | 7.0 |
| Total CAPEX (R’M) | 65.0 | 69.0 | 101.0 | 106.0 | 117.0 | 458.0 |
9.3 Projected Profit and Loss Statement
The following consolidated income statement presents the projected
financial performance over the five-year planning horizon:
| Income Statement (R’M) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | 48.0 | 112.0 | 205.0 | 340.0 | 510.0 |
| Cost of Goods Sold | (31.7) | (72.8) | (131.2) | (214.2) | (316.2) |
| Gross Profit | 16.3 | 39.2 | 73.8 | 125.8 | 193.8 |
| Gross Margin (%) | 34.0% | 35.0% | 36.0% | 37.0% | 38.0% |
| ── Operating Expenses ── | |||||
| Staff Costs | (7.7) | (17.4) | (30.8) | (49.6) | (71.4) |
| Occupancy Costs | (4.3) | (10.1) | (18.5) | (28.9) | (40.8) |
| Marketing & Advertising | (1.9) | (3.9) | (6.2) | (10.2) | (15.3) |
| Technology & IT | (1.2) | (2.0) | (3.1) | (4.1) | (5.1) |
| General & Administrative | (2.2) | (4.0) | (5.5) | (7.6) | (10.2) |
| Depreciation & Amortisation | (3.5) | (6.5) | (10.5) | (15.5) | (20.5) |
| Total Operating Expenses | (20.8) | (43.9) | (74.6) | (115.9) | (163.3) |
| ─────────── | |||||
| Operating Profit (EBIT) | (4.5) | (4.7) | (0.8) | 9.9 | 30.5 |
| Add Back: Depreciation | 3.5 | 6.5 | 10.5 | 15.5 | 20.5 |
| EBITDA | 2.5 | 11.0 | 27.7 | 55.1 | 95.9 |
| EBITDA Margin (%) | 5.2% | 9.8% | 13.5% | 16.2% | 18.8% |
| ─────────── | |||||
| Interest Expense | (3.1) | (4.8) | (6.2) | (5.5) | (4.2) |
| Interest Income | 0.2 | 0.3 | 0.5 | 0.8 | 1.2 |
| Profit Before Tax | (7.4) | (9.2) | (6.5) | 5.2 | 27.5 |
| Income Tax (27%) | – | – | – | (1.4) | (7.4) |
| Tax Losses Carried Forward | (7.4) | (16.6) | (23.1) | (17.9) | – |
| Net Profit After Tax | (7.4) | (9.2) | (6.5) | 3.8 | 20.1 |
| Adjusted Net Profit* | (8.2) | 1.8 | 14.5 | 35.2 | 62.8 |
* Adjusted Net Profit adds back non-cash depreciation,
pre-opening costs, and one-time setup expenses to reflect underlying
cash-generative performance.
9.4 Projected Balance Sheet
The following consolidated balance sheet presents the projected
financial position at each year-end:
| Balance Sheet (R’M) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| ASSETS | |||||
| Non-Current Assets | |||||
| Property, Plant & Equipment | 26.5 | 60.0 | 99.5 | 144.0 | 193.5 |
| Intangible Assets (IT/IP) | 6.5 | 8.0 | 10.5 | 12.0 | 13.5 |
| Total Non-Current Assets | 33.0 | 68.0 | 110.0 | 156.0 | 207.0 |
| Current Assets | |||||
| Inventory | 15.0 | 32.0 | 55.0 | 82.0 | 112.0 |
| Trade Receivables | 4.8 | 11.2 | 20.5 | 34.0 | 51.0 |
| Cash & Cash Equivalents | 8.2 | 5.8 | 12.5 | 28.0 | 55.2 |
| Total Current Assets | 28.0 | 49.0 | 88.0 | 144.0 | 218.2 |
| TOTAL ASSETS | 61.0 | 117.0 | 198.0 | 300.0 | 425.2 |
| EQUITY & LIABILITIES | |||||
| Share Capital | 51.0 | 51.0 | 71.0 | 71.0 | 71.0 |
| Retained Earnings | (7.4) | (16.6) | (23.1) | (19.3) | 0.8 |
| Total Equity | 43.6 | 34.4 | 47.9 | 51.7 | 71.8 |
| Non-Current Liabilities | |||||
| Long-term Borrowings | 10.0 | 55.0 | 95.0 | 165.0 | 235.0 |
| Lease Liabilities (IFRS 16) | 2.4 | 8.6 | 18.1 | 30.3 | 43.4 |
| Total Non-Current Liabilities | 12.4 | 63.6 | 113.1 | 195.3 | 278.4 |
| Current Liabilities | |||||
| Trade Payables | 3.0 | 14.0 | 28.0 | 40.0 | 55.0 |
| Short-term Borrowings | 0.0 | 2.0 | 4.0 | 6.0 | 10.0 |
| Other Current Liabilities | 2.0 | 3.0 | 5.0 | 7.0 | 10.0 |
| Total Current Liabilities | 5.0 | 19.0 | 37.0 | 53.0 | 75.0 |
| TOTAL EQUITY & LIABILITIES | 61.0 | 117.0 | 198.0 | 300.0 | 425.2 |
9.5 Projected Cash Flow Statement
| Cash Flow Statement (R’M) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Operating Activities | |||||
| Net Profit/(Loss) | (7.4) | (9.2) | (6.5) | 3.8 | 20.1 |
| Add: Depreciation & Amortisation | 3.5 | 6.5 | 10.5 | 15.5 | 20.5 |
| Changes in Working Capital | (5.8) | (10.4) | (12.3) | (13.5) | (15.2) |
| Net Cash from Operations | (9.7) | (13.1) | (8.3) | 5.8 | 25.4 |
| Investing Activities | |||||
| CAPEX (Store Fit-Out & IT) | (38.0) | (43.0) | (69.0) | (63.0) | (73.0) |
| Distribution Centre | – | – | (15.0) | (5.0) | – |
| Net Cash from Investing | (38.0) | (43.0) | (84.0) | (68.0) | (73.0) |
| Financing Activities | |||||
| Equity Injected | 51.0 | – | 20.0 | – | – |
| Debt Drawn Down | 10.0 | 47.0 | 44.0 | 74.0 | 74.0 |
| Debt Repayments | – | (2.0) | (4.0) | (4.0) | (6.0) |
| Interest Paid | (3.1) | (4.8) | (6.2) | (5.5) | (4.2) |
| Net Cash from Financing | 57.9 | 40.2 | 53.8 | 64.5 | 63.8 |
| Net Change in Cash | 10.2 | (15.9) | (38.5) | 2.3 | 16.2 |
| Opening Cash Balance | – | 10.2 | (5.7) | (44.2) | (41.9) |
| Closing Cash Balance | 10.2 | (5.7) | (44.2) | (41.9) | (25.7) |
9.6 Break-Even Analysis
The break-even analysis is conducted at both the individual store
level and the consolidated group level:
Store-Level Break-Even
An individual HealthPlus store is projected to reach monthly
operating break-even within 14–18 months of opening, based on a monthly
revenue run-rate of approximately ZAR 1.1–1.3 million. The break-even
revenue point assumes a blended gross margin of 35%, monthly operating
expenses of ZAR 380,000–450,000 (including occupancy, staff, and
store-level overhead), and excludes allocated corporate overhead and
pre-opening costs.
Group-Level Break-Even
Consolidated EBITDA break-even is achieved in Year 1, reflecting the
positive cash contribution from store-level operations net of corporate
overhead. Net profit break-even (after interest, depreciation, and tax)
is projected for Year 4, as the store network reaches sufficient scale
to absorb corporate costs and debt service obligations.
9.7 Return on Investment Analysis
| Investment Metric | Value | Benchmark |
|---|---|---|
| Target IRR (Equity) | 24–30% | PE funds target 20%+ IRR for growth equity |
| Target IRR (Blended) | 18–22% | Above SA risk-free rate + 12% equity risk premium |
| Payback Period | 36 months | Comparable pharmacy chains: 30–42 months |
| EBITDA Multiple (Year 5) | 4.5–5.5x | Dis-Chem trades at ~15x; discount for scale/liquidity |
| Enterprise Value (Year 5 Est.) | R430–530M | Based on 4.5–5.5x Year 5 EBITDA of R95.9M |
| Revenue Multiple (Year 5) | 0.85–1.05x | Discount to listed peers; premium to independents |
9.8 Funding Structure
The proposed capital structure balances equity dilution with
financial leverage, structured to meet lender requirements while
providing attractive equity returns:
| Funding Source | Amount (R’M) | % of Total | Terms |
|---|---|---|---|
| Founder Equity | 15.0 | 17.6% | Common shares, pari passu with investor equity |
| Investor Equity (Series A) | 36.0 | 42.4% | Preference shares, 2x liquidation preference, board seat |
| Senior Secured Debt | 24.0 | 28.2% | 5-year term, prime + 2.5%, inventory-secured |
| Asset Finance | 10.0 | 11.8% | Equipment/fit-out finance, 4-year term |
| Total Phase 1 Funding | 85.0 | 100% |
Phase 2 Funding (Year 3): An additional ZAR 40–60 million in
growth capital (mix of retained earnings, additional equity, and
expanded debt facilities) will be required to fund the expansion from 12
to 25 stores and the distribution centre investment.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of HealthPlus Pharmacy Group (Pty) Ltd.