Mainstreet Junction Business Plan — Important Notice and Basis of Preparation

Confidentiality terms, basis of preparation, data sources and forward-looking statement caveats for the Mainstreet Junction business plan.

Important Notice and Basis of Preparation

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This business plan has been prepared for Mainstreet Junction Service Station, a proposed greenfield freehold fuel retail development on a Gauteng arterial corridor, in support of R14.5 million of equity alongside R24.0 million of senior bank debt and R6.0 million of oil company and equipment facilities.

Basis of the figures. The model is built from throughput in litres, the regulated and realised margins per litre, and the non-fuel revenue streams. The income statement, balance sheet and cash flow statement are fully articulated: the balance sheet is derived rather than plugged and balances to the rand in every year, shareholders’ funds roll forward from the equity subscription, retained earnings and distributions, and the closing cash position reconciles exactly to the cash flow statement.

Taxation. South African corporate income tax is applied at 27 per cent. The Year 1 assessed loss of R0.32 million is carried forward and set off against Year 2 taxable income, which is permitted in full because it sits below the R1 million floor in the section 20 limitation. Year 2 tax is therefore R0.55 million rather than the R0.64 million a full-rate charge on unrelieved profit would produce.

Break-even. The cash and accounting break-even thresholds are calculated separately for each year against that year’s own cost base and debt service, rather than applying a single mature-year threshold across the whole projection. On that basis the Year 1 cash break-even is 317 638 litres a month against a planned 340 000 — headroom of 6.6 per cent — while by Year 5 the same measure is 284 956 litres against 480 000, or 40.6 per cent.

Stock loss. A persistent 0.5 per cent wet stock variance is valued at the landed cost of the product lost rather than at the pump price, because the loss to the business is the cost of fuel that cannot be sold. At Year 3 volumes that is R649 440 a year, and recovering it would require selling roughly 209 000 additional litres at the prevailing margin.

Debt. Interest and capital derive from facility-level amortisation schedules: the senior facility over ten years at 12.0 per cent with a twelve-month capital moratorium, and the oil company and equipment facility over five years at 10.5 per cent. Without the moratorium Year 1 debt service cover would be 0.91 times, which is why the structure in Section 8 is built around it.

Distributions. No dividend is modelled before Year 3, and thereafter distributions are limited to 50 per cent of profit after tax and only in years where debt service cover exceeds 1.50 times. Cash retained above that is held on balance sheet.

Market and regulatory data. Station counts, benchmark station volumes, RAS margin structure, licensing requirements and the national minimum wage are drawn from published industry and government material current to 2026. Site-specific parameters — traffic counts, capture rates, catchment and lease terms — are modelled and must be replaced with observed data before any investment decision. The licensing process itself requires an independent traffic count and economic viability study.

Confidentiality. This document is delivered in confidence to the named recipient. It may not be reproduced or circulated in whole or in part without prior written consent.

Contents

1. Executive Summary 4

2. How Fuel Retail Economics Actually Work 7

3. The Business and Its Revenue Streams 9

4. Market and Site Analysis 11

5. SWOT and Competitive Position 14

6. Regulatory Pathway and Licensing 16

7. Operations Plan 18

8. Management and Organisation 22

9. Capital Requirement and Funding Structure 24

10 Financial Projections 27

11 Break-Even Analysis 31

12 Debt Service and Working Capital 33

13 Investment Returns 35

14 Sensitivity and Scenario Analysis 37

15 Risk Management 40

16 Implementation Timeline 43

17 Exit Options for Investors 45

18 Key Performance Indicators 47

19 Key Assumptions 48

20 Conclusion 50

A. Appendix A — Consolidated Financial Summary 51

B. Appendix B — Capital and Depreciation Schedules 52

C. Appendix C — Funding and Debt Schedules 54

D. Appendix D — Risk Register 55

E. Appendix E — Glossary 57

Next section1. Executive Summary