Yield, commercial crop

26 rising to 34 t/ha

Well-managed irrigated ginger in Limpopo achieves 30 to 40 tonnes a hectare. The plan starts below that band and reaches the lower half of it, reflecting a company learning its way up a curve. This is the assumption with the largest effect on outcome and the one to diligence hardest.

Seed block yield factor

92% of commercial

Seed blocks are managed for rhizome quality and multiplication rather than for tonnage, and are typically harvested slightly earlier.

Crop loss to soil-borne disease

12% falling to 8%

Provisioned as a recurring operating cost, not a tail risk. The improvement assumes the plant health protocol in Section 12.4 is enforced and that land quality improves as screening data accumulates.

Marketable share

88%

Share of harvested weight meeting fresh grade after wash, grade and cure. The balance sells to processing. Consistent with own-packhouse handling; outsourced handling would be lower.

Seed rate

3 t/ha

Standard commercial planting density for irrigated ginger on raised beds.

Fresh price realised

R22.00 to R25.00/kg

Mid-range against the domestic band and deliberately below shortage-period levels. Escalation of 3.2% a year is below assumed general inflation, which is a conservative treatment for a price-taking producer.

Certified seed price

R68.00 to R76.00/kg

No established domestic reference price exists, because no established domestic supply exists. Anchored to the grower’s cost of a failed crop rather than to a substitution price. This is the assumption with the weakest external evidence and it is tested at ±20% in Section 24.

Field cost per hectare

R210,000 to R245,000

Excludes planting material. Escalated at approximately 3.9% a year, above assumed general inflation to reflect fertiliser and energy exposure.

Seed block cost premium

1.22x field cost

Reflects lower density, higher plant health intensity, individual lot handling and indexing.

Land lease

R12,000 to R15,000/ha controlled

Applied to the full rotation footprint of 504 hectares by FY2031, not to planted hectares. This is the assumption most often understated in ginger business plans.

Rotation crop income

R5,000/ha resting

Net contribution from maize, soya or cover crops on resting land under a share arrangement. Netted against lease cost.

Post-harvest cost

R2.20 to R2.60/kg

Wash, grade, cure, cold store and packing on own infrastructure.

Seed conditioning cost

R5.00/kg

Individual lot handling, indexing, laboratory testing and separate storage.

Purchased planting material, FY2027

R5.0m

24 tonnes of indexed material for the seed block at R95,000 a tonne, plus 60 tonnes of commercial-grade rhizome at R45,000 a tonne. Purchased once only.

Overheads

R4.4m to R13.4m

Six functions built bottom-up from headcount and activity rather than as a percentage of revenue. Falls from 39% to 16% of revenue.

Capital expenditure

R42.6m over five years

Six asset classes with lives of 7 to 15 years. Front-loaded on capacity that cannot be added mid-season.

Working capital

DSO 32d, DIO 72d, DPO 35d

55% of sales collect in the month of sale. Inventory is dominated by retained seed rhizome. Payables at 35 days with 45% of field cost on 60-day supplier terms.

Term debt

R20.0m at 11.5%

10-year tenor with a 3-year capital grace period on each tranche. Fixed rate.

Seasonal facility

Limits R8.0m to R40.0m at 13.75%

Prime-linked. Sized against the June peak requirement with headroom, not against the year-end balance.

Taxation

27% corporate rate

Section 12B allowances at 50%/30%/20%; First Schedule development expenditure ring-fenced to farming income; assessed loss utilisation capped at 80%.

Discount rate

17.5% WACC

Cost of equity 22.5% from a risk-free rate of 10.75%, equity risk premium 6.0%, beta 0.85, size premium 4.5% and a crop-specific premium of 2.0%. Target gearing 35%. Tested at 15.5% / 17.5% / 19.5%.

Exit assumptions

5.25x EV/EBITDA at FY2031

Range of 4.00x to 5.25x to 6.50x. Sits below listed agribusiness averages to reflect scale, leased land and a five-year operating history.