Lichtenburg Nut Company Business Plan — Break-even Analysis
The tonnage needed to cover the cost base, and when the business crosses break-even.
Section 30 of 37
Break-even Analysis
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- 0. Basis of Preparation and Important Notice
- 1. Executive Summary
- 2. Investment Thesis
- 3. The Company
- 4. Problem, Customer Need and Value Proposition
- 5. Products and Services
- 6. Industry Analysis
- 7. Market Analysis
- 8. Customer Analysis
- 9. Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model
- 13. Raw Material Supply and Contract Farming
- 14. Quality, Food Safety and Aflatoxin Control
- 15. Management and Organisation
- 16. Strategic Plan
- 17. SWOT Analysis and Strategic Implications
- 18. Risk Analysis
- 19. ESG and Development Impact
- 20. Implementation Roadmap
- 21. Financial Model and Assumptions
- 22. Projected Income Statement
- 23. Projected Balance Sheet
- 24. Projected Cash Flow
- 25. Capital Expenditure
- 26. Working Capital
- 27. Funding Requirement and Structure
- 28. Debt Serviceability
- 29. Break-even Analysis
- 30. Scenario and Sensitivity Analysis
- 31. Valuation and Investment Returns
- 32. Key Performance Indicators and Management Dashboard
- 33. Conclusion and Recommendation
- A. Appendix A: Detailed Assumption Register
- B. Appendix B: Ten-Year Financial Summary
- C. Appendix C: Glossary and Sources
Table 66. Break-even analysis by operating year
|
R million unless stated |
FY2029 |
FY2030 |
FY2031 |
FY2032 |
FY2033 |
|---|---|---|---|---|---|
|
Contribution margin |
34.7% |
34.4% |
35.3% |
35.7% |
35.8% |
|
Fixed cost base |
27.2 |
34.8 |
40.4 |
45.4 |
51.2 |
|
Break-even net revenue |
78.3 |
101.2 |
114.4 |
127.2 |
143.1 |
|
Break-even volume (tonnes) |
1,437 |
1,726 |
1,805 |
1,886 |
2,007 |
|
Planned volume (tonnes) |
1,180 |
1,840 |
2,340 |
2,730 |
3,000 |
|
Margin of safety |
-21.8% |
6.2% |
22.9% |
30.9% |
33.1% |
|
Break-even revenue including debt service |
103.0 |
122.6 |
141.0 |
156.3 |
185.0 |
Contribution margin treats groundnuts, packaging, ingredients, energy, quality rejects, distribution and 45% of marketing as variable. Fixed cost comprises all payroll, factory overhead, other operating expenditure and 55% of marketing.
EBITDA break-even is crossed during Operating Year 2. The margin of safety, the proportion by which volume could fall before EBITDA turns negative, is 6% in FY2030, 23% in FY2031 and 33% by FY2033. The more demanding test is break-even including debt service, which the company only clears comfortably from FY2033.