Financial Plan

Jump to section

• Overview & contents
• 1. Executive Summary
• 2. Investment Thesis
• 3. Company and Business Overview
• 4. Problem, Customer Need and Value Proposition
• 5. Products and Services
• 6. Industry Analysis
• 7. Market Analysis and Sizing
• 8. Customer Analysis
• 9. Competitive Landscape
• 10. Business Model
• 11. Go-to-Market Strategy
• 12. Operating Model
• 13. Management and Organisation
• 14. Strategic Plan
• 15. SWOT Analysis
• 16. Risk Analysis
• 17. ESG and Sustainability
• 18. Implementation Roadmap
• 19. Financial Plan
• 20. Assumptions Framework
• 21. Funding Requirement and Structure
• 22. Break-Even and Debt Serviceability
• 23. Investment Case and Valuation
• 24. Sensitivity and Scenario Analysis
• 25. Key Performance Indicators and Management Dashboard
• 26. Conclusion
• A. Appendix A: Assumption Register
• B. Appendix B: Conditions Precedent to Drawdown
• C. Appendix C: Index of Exhibits and Tables
• D. Appendix D: Glossary

The financial model is a single integrated three-statement model covering five financial years to 31 October 2031, resolved against a monthly operating engine that drives the seasonal cash cycle. Every table in this document is generated from that one model. There is no separate presentation layer and no figure in this plan that has been typed rather than calculated.

19.1 Basis of preparation

• Reporting period. Financial years end 31 October, so that a complete crop cycle, land preparation, planting, growing, harvest and collection, falls within one reporting period. See Section 12.1.
• Currency and inflation. All figures are nominal South African Rand. Price and cost escalation is embedded in the individual assumptions rather than applied as a single inflation factor.
• Revenue recognition. Revenue is recognised on dispatch. 55% of sales collect in the month of sale and the balance in the following month.
• Planting material. Rhizome retained from the seed block for the following season’s planting is carried in inventory at production cost. It is neither recognised as revenue nor charged as a cost of the crop it plants, which is the correct treatment and materially affects the shape of the accounts.
• Rotation income. Income from crops on resting land is netted against the lease cost rather than presented as revenue, because it is a cost recovery.
• Taxation. South African corporate rate of 27%. Section 12B farming allowances are applied at 50% / 30% / 20% on qualifying assets. First Schedule development expenditure is limited to farming taxable income with carry-forward. Assessed losses are utilised subject to the 80% limitation with a R1m floor.
• Integrity. The balance sheet balances in every period to within rounding, the cash flow reconciles to the balance sheet cash line, retained earnings roll forward from profit after tax, and debt balances roll forward from drawdowns and repayments.

19.2 Revenue is built from operating drivers, not from growth rates

Table 42. Revenue build from operating drivers. Every revenue figure traces to hectares, a survival rate, a yield and a price.

Revenue grows at a compound rate of 65% a year, but none of that growth is assumed. It is the arithmetic consequence of planted area rising from 28 to 112 hectares, yield rising from 26 to 34 tonnes, disease loss falling from 12% to 8%, and prices escalating at roughly 3.2% a year. A reader who disagrees with the plan should disagree with one of those four drivers, and the sensitivity analysis in Section 24 quantifies each.

19.3 Projected income statement

Table 43. Projected income statement. Purchased planting material appears only in FY2027; thereafter the seed block supplies the entire requirement.

Three features of this statement should be read together. FY2027 gross profit is negative at R(2.8)m, because the year carries R5.0m of purchased planting material against a first crop of 403 tonnes. Excluding that one-off, EBITDA would be R(2.2)m rather than R(7.2)m. The company reaches profitability in FY2029 on profit after tax of R0.7m, and pays its first tax in FY2031 after the assessed loss is absorbed.

The bridge makes the composition of the improvement explicit. Volume growth is the largest single contributor, but overhead absorption is the second — the fixed functions that cost 39% of revenue in FY2027 cost 16% by FY2031 without materially changing in nature. Price escalation is a comparatively small contributor, which is consistent with the plan’s refusal to assume pricing power in the fresh channel.

19.4 Margin progression and cost per kilogram

Table 44. Margin progression. Full cost per kilogram includes all overheads and allocates the entire cost base to marketable fresh volume.

19.5 Projected balance sheet

Table 45. Projected balance sheet. The balance check is nil in every period. The seasonal facility is nil at every year end and peaks mid-year; see Section 21.4.

Two lines deserve comment. Inventory of R8.8m at FY2031 is predominantly retained seed rhizome, R6.5m of it, carried at production cost. At certified seed value the same rhizome would be worth roughly R31.9m. And the seasonal facility shows nil at every year end, which is accurate and misleading at the same time; the facility is undrawn in October because the crop has been sold and the debtors collected. Section 21.4 sets out the position that matters.

19.6 Projected cash flow

Table 46. Projected cash flow. Closing cash reconciles to the balance sheet cash line in every period.

Operating cash flow turns positive in FY2029 and free cash flow to the firm in FY2030. Cumulative operating cash consumption before that point is R13.2m, against equity of R36.0m and term debt of R20.0m. The company is funded through its loss-making phase with material headroom, and that headroom is deliberate: a ginger venture that runs out of cash in March has no ability to raise revenue before July.