Top-down and bottom-up market estimates do not reconcile, and the plan says so

Applying published regional splits, the Middle East and Africa accounts for roughly 1.2% of the global film market, of which South Africa might represent a fifth. Grossed up to installed service value, that top-down route implies a South African PPF market of perhaps R120m to R180m per annum. The bottom-up build in Section 7, derived from vehicle parc and attachment rates, implies roughly R276m for PPF alone.

The two do not reconcile, and management does not believe they can be reconciled with available data. Regional splits in globally published reports are modelled rather than surveyed, and they systematically miss unbranded film imported directly from Asian manufacturers, which is a significant part of actual South African volume. The plan is therefore anchored on the bottom-up build, with the top-down figure treated as a lower bound. An investor who prefers the top-down number should read the Company’s FY32 revenue as a much larger share of a much smaller market, and should discount the plan accordingly.

Supplier power

HIGH

Film is manufactured by a handful of global producers and distributed through exclusive territorial accreditation. The manufacturer controls price, allocation, pattern software access and — critically — the right to offer the warranty that the customer is buying. Implication: the Company must secure and protect its accreditation, and must accept that roughly a quarter of its revenue is passed to a supplier with pricing power.

Threat of new entrants

HIGH at the low end, LOW at the premium end

A mobile operator with a heat gun and a roll of film can enter for under R60,000 and does so constantly. Entering at the premium end requires accreditation, a controlled facility, certified installers and a warrantable balance sheet — a R5m-plus commitment. Implication: price competition is permanent at the bottom of the market and largely absent at the top. The Company must not compete on price.

Buyer power

MODERATE

Retail customers are individually small, poorly informed on technical quality and heavily influenced by reviews and referral — buyer power is weak. Franchise dealer groups and fleet operators negotiate hard and extract 11% to 15% referral commission. Implication: the trade channel stabilises utilisation but dilutes margin; the mix between the two is a deliberate management choice, not an accident.

Threat of substitutes

MODERATE

Ceramic coating is frequently sold as a substitute for film despite offering negligible impact protection. Factory-applied OEM protection is a genuine emerging substitute for the full-front product. Implication: customer education is a real commercial activity, and the OEM channel should be treated as a future partner rather than only as a threat.

Competitive rivalry

MODERATE

Fragmented, geographically local and largely non-price at the premium end. Rivalry is for installers rather than for customers. Implication: the scarce resource is labour, and the binding competitive contest is in the labour market.

The conclusion the five forces produce

This is an industry in which the scarce factor is not capital, not customers and not technology. It is certified labour. Every structural feature of the industry — supplier power, the entry barrier at the premium end, the nature of rivalry — resolves to the same point. The Company’s strategy, organisation design and capital allocation are all built around that single conclusion.

Political

Neutral

Policy risk is low for this sector specifically. Broader investment climate concerns are reflected in the 21.5% cost of equity applied in Section 28.

Economic

Mixed

Prime is 10.50% and inflation eased to 4.3% in July 2026, supporting the consumer. Against that, this is discretionary spend on a discretionary asset. A consumer downturn hits the Company twice.

Social

Favourable

Rising vehicle-as-identity behaviour, strong car culture, and an active social and referral ecosystem around vehicle appearance. Customer acquisition cost is materially lower than in comparable service categories for this reason.

Technological

Favourable but supplier-owned

Software pattern-cutting (DAP) improves film yield by roughly eight percentage points of gross margin against hand-cutting. Self-healing TPU films reduce warranty claims. Both are licensed from the manufacturer, not owned.

Environmental

Mixed

Electricity cost escalates at roughly 11% per annum and load-shedding risk requires backup capacity. Film is a petrochemical product with no established end-of-life recycling route in South Africa — addressed in Section 17.

Legal

Manageable

NRCS requirements apply to window film transmittance. Consumer Protection Act warranty obligations attach to the installation independently of the manufacturer film warranty. Motor-traders and goods-in-trust insurance is mandatory in practice.