Lesedi Solar Care Business Plan — Returns, Scenarios & Sensitivity

Applying the stated exit assumption produces a clear result. Six times Year-5 EBITDA of R36.1 million gives an enterprise value of R216.6 million. The…

Returns, Scenarios & Sensitivity

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17.1 Stated returns

Metric	Base case
Equity IRR (5-year hold)	31.4%
Multiple on invested equity	3.9×
Equity payback	3.4 years
EBITDA breakeven	Month 16
Exit assumption	6.0× EV/EBITDA on year-5 EBITDA

17.2 Testing the exit arithmetic

Figure 26. Returns depend entirely on what shareholding R38 million purchases.

Applying the stated exit assumption produces a clear result. Six times Year-5 EBITDA of R36.1 million gives an enterprise value of R216.6 million. The business carries R2.8 million of asset finance against R26.7 million of cash, so it is in a net cash position of R23.9 million, giving a whole-equity value at exit of approximately R240.5 million.

Basis	Exit proceeds	MOIC	Equity IRR
Whole equity value ÷ R38m raised	R240.5m	6.3×	44.6%
Incoming investors at 41% (Sizwe 26% + Helios 15%)	R98.6m	2.6×	21.0%
Sponsor stated	—	3.9×	31.4%

Key findingThe Plan does not disclose what shareholding R38 million purchases — the most important omission for an investor

The stated 3.9× and 31.4% are internally consistent with each other: 1.314 compounded over five years is 3.92, so the multiple and the rate agree. They do not, however, reconcile to the stated exit assumption. Measured against the whole equity value the R38 million produces 6.3×; measured against the 41% that Sizwe and Helios hold in the shareholding table it produces 2.6×. The stated 3.9× implies the incoming capital receives approximately 62% of exit value, which corresponds to neither figure. The likeliest explanation is that the return is quoted on a basis, perhaps a preferred structure, a ratchet, or a different assumed ownership, that the Plan does not set out. This is entirely resolvable, but it must be resolved: an investor cannot price this opportunity without knowing what percentage of the company R38 million buys, and the difference between 2.6× and 6.3× is the difference between an adequate return and an exceptional one.

17.3 A seven-year hold

The Plan measures returns on a five-year hold, which is conventional for a growth fund. It is worth noting what a seven-year hold produces on the same assumptions, because the business is still compounding rapidly at year five. Year-7 EBITDA of R57.9 million at the same 6.0× multiple, plus net cash of R66.6 million, gives a whole-equity value of approximately R414 million, 10.9× the equity raised, at an internal rate of return of 40.7%. The internal rate falls slightly against the five-year case because the exit is later, but the absolute value nearly doubles. For an investor with patient capital, extending the hold is materially value-accretive, and the Plan might usefully present both.

17.4 Scenario analysis

Variable	Downside	Base	Upside
MW under management at Y5	880	1,250	1,520
Blended pricing	-10%	As modelled	+7%
Contribution margin at Y5	35.0%	41.0%	44.0%
Y5 revenue	R88.0m	R139.0m	R181.0m
Y5 EBITDA	R16.3m	R36.1m	R53.4m
Exit multiple	5.0×	6.0×	7.0×
Equity IRR (sponsor stated)	14.6%	31.4%	42.8%
Equity IRR (re-derived, whole equity)	22.63%	44.63%	59.94%

17.5 The downside tested

Figure 28. Downside case: EBITDA and cash remain positive throughout.

StrengthThe downside solvency claim is verified — and it is the strongest feature of the investment case

The Plan asserts that in the downside, winning only 70% of target contracts, pricing 10% lower and never reaching full route density, the business still returns a positive multiple and remains solvent throughout, funded by the initial raise without further equity. Independent reconstruction confirms it. Applying the stated downside parameters produces Year-5 EBITDA of R16.3 million, matching the Plan exactly, and a cash trajectory that troughs at approximately R10.1 million in year four before recovering to R32.8 million by year seven. No additional equity is required at any point. This asymmetry, where the failure mode is slower growth rather than capital loss, is what distinguishes an asset-light services business from the capital-intensive alternatives, and it survives testing. It is the single most important thing an investor should take from this Plan.

17.6 Sensitivity

Figure 29. Equity IRR sensitivity to key value drivers.

The tornado ranks the drivers unambiguously: contracted megawatts dominates, followed by the exit multiple, then pricing and contribution margin, with fleet and fuel costs a distant second order. Management draws the correct conclusion, the dominant variable is contracted capacity, which is a sales-execution risk rather than a market risk, because the fleet exists and requires servicing regardless. That is the central judgement an investor is asked to make, and the Plan is admirably direct in saying so.