Lichtenburg Nut Company Business Plan — Financial Model and Assumptions

How the model is built, which assumptions drive which outputs, and where the sensitivities concentrate.

Section 22 of 37

Financial Model and Assumptions

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Overview & contents

21.1 Model architecture

Monthly engine over 132 months. Months 1 to 12 are construction and commissioning (FY2028). Months 13 to 132 are Operating Years 1 to 10 (FY2029 to FY2038). Reporting is at a February year end, aligning with the groundnut marketing season.
Fully integrated. The income statement, balance sheet, cash flow statement, debt schedule, capital expenditure schedule, tax computation and working capital schedule are linked. Retained earnings roll forward from net profit less dividends; debt balances roll forward from draws and repayments; interest is computed on opening balances; depreciation is computed from the asset register.
Iteratively solved. Interest on drawn debt affects cash, which affects revolver draws, which affects interest. The model iterates eighty times to convergence.
Balance sheet integrity. Total assets less total liabilities less equity is zero in every month of every scenario. The maximum absolute error across the base, upside, downside and stress cases is below one rand.
Ten-year horizon for valuation. A five-year truncation of an asset with a fifteen-year economic life systematically understates value. The explicit forecast therefore runs to Year 10, with a terminal value beyond.

21.2 Macroeconomic assumptions

Table 47. Macroeconomic and financing assumptions

Assumption	Value	Basis
Prime lending rate	10.50%	SARB repo rate of 7.00% following the May 2026 increase, plus the conventional 3.50% bank margin
Consumer price inflation	3.5%	SARB has moved to a 3% point target; the model uses a modestly higher long-run rate
Realised price escalation	4.4%	Slightly above CPI, reflecting partial pass-through of input cost and mix improvement
Groundnut input cost escalation	4.8%	Above CPI, reflecting structural supply tightness. This deliberately compresses margin over time.
Other operating cost escalation	4.5%	Energy and packaging escalate above CPI in South Africa
Wage escalation	5.5%	South African manufacturing settlements have run above CPI
Corporate income tax rate	27%	Standard South African corporate rate
Senior debt margin	Prime + 1.50%	Indicative pricing for a secured greenfield agro-processing facility
Revolving facility margin	Prime + 2.00%	Secured on debtors and stock
Deposit rate on surplus cash	5.5%	Call account

Escalating groundnut cost at 4.8% against realised prices at 4.4% builds a deliberate margin squeeze into the model. If the company can pass input cost through fully, EBITDA in Year 5 would be approximately R3.4 million higher than shown.

21.3 Operating assumptions

Table 48. Operating assumptions

Category	Assumption	Value	Comment
Capacity	Line rate	1,000 kg/hour finished paste	Two shifts of eight productive hours
Capacity	Production days and availability	250 days at 85%	Nameplate 3,400 t; 4,800 t after Phase 3
Raw material	In-shell groundnut price	R14,900/t	Delivered, contracted growers, Year 1 real
Raw material	Shelling recovery	70%	Kernel yield from in-shell
Raw material	Own shelling cost	R0.82/kg kernel	Labour, energy and consumables on the shelling line
Raw material	Bought shelled kernel price	R24,800/t	25% of requirement, retained for flexibility
Raw material	Kernel input per kg of paste	1.01 kg	Allows for blanching and roasting loss
Raw material	Kernel input per kg of snack nuts	1.12 kg	Higher loss through sorting and skin removal
Raw material	Intake rejection and downgrade	4%	Recovered at 45% of value
Raw material	By-product credit	R1.15/kg output	Shell biomass energy offset and off-grade kernel sales
Variable cost	Ingredients, energy, quality and inbound freight (paste)	R5.85/kg	Energy is the largest component at R3.10/kg
Variable cost	Packaging, bulk	R1.90/kg	Pails, drums and IBCs
Variable cost	Packaging, retail private label	R6.40/kg	PET jars, closures, labels, shrink and cartons
Variable cost	Packaging, own brand	R7.60/kg	Higher specification including a glass format for the premium tier
Variable cost	Packaging, snack nuts	R11.50/kg	Small flexible formats carry a high cost per kilogram
Variable cost	Waste and rework	2.2% paste, 3.0% snacks
Distribution	Bulk and packed	R1.60 and R2.40/kg	Third-party logistics from Lichtenburg
Overhead	Plant maintenance	3.0% of plant in service	Applied only to assets actually commissioned
Overhead	Property rental	R75/m² per month	Leased rather than owned, avoiding roughly R28m of capital
Marketing	Own brand and snack nut activation	6% and 7% of net revenue	Plus a fixed brand build allocation in Years 2 to 4

21.4 Working capital and tax assumptions

Table 49. Working capital and taxation assumptions

Assumption	Value	Basis
Debtor days, bulk and industrial	45 days	Standard industrial terms
Debtor days, retail	62 days	National retailer payment terms
Creditor days, groundnuts	21 days	Growers require prompt payment on delivery
Creditor days, other	45 days	Packaging, services and consumables
Finished goods inventory	32 days of cost of sales
Packaging inventory	40 days
Groundnut procurement profile	53% of annual requirement bought April to July	Follows the harvest and delivery window
Tax: plant and machinery	Section 12C, 40/20/20/20	New manufacturing plant brought into use
Tax: leasehold improvements	Section 11(g), straight line over the lease term	Fifteen-year lease
Tax: pre-operating expenditure	Section 11A, deductible on commencement of trade
Tax: assessed loss carry-forward	Utilisation limited to 80% of taxable income	Section 20 as amended
Tax: deferred tax	Recognised on the temporary difference between book and tax depreciation, and on the assessed loss	Flows through the income statement so retained earnings reconcile
Tax: provisional payments	45% in August and 55% in February	Approximates the South African provisional tax cycle
Dividends	35% of net profit from Operating Year 7	No distribution while the business is deleveraging