Meridian Industrial Group Business Plan — Appendices

Appendix A — Capital expenditure & depreciation schedule

Component capital expenditure by asset class, with useful life driving the depreciation charge (ZAR millions).

Asset class	Total capex (R m)	Useful life
Manufacturing plant & equip.	1,100	15y
Logistics fleet	500	7y
Warehousing & DCs	220	20y
Polymer production plant	650	15y
Technology systems	220	5y
Export infrastructure	120	20y
Renewable energy systems	100	20y
Acquired tangible assets	350	12y
Goodwill (acquisitions)	200	—
Maintenance capex	532	12y
Total capital programme	3,992

Figure 26. *Capital-deployment schedule by asset class and year*

Appendix B — Annual depreciation, interest & tax detail

	Year 1	Year 2	Year 3	Year 4	Year 5
Depreciation charge	128	226	283	302	328
Accumulated depreciation	128	355	638	940	1,267
Gross PP&E	1,402	2,579	3,260	3,482	3,792
Net PP&E	1,274	2,224	2,622	2,542	2,525
Debt (opening)	0	1,400	2,000	2,130	1,780
Debt draws	1,400	600	280	0	0
Debt (closing)	1,400	2,000	2,130	1,780	1,280
Interest charge	81	196	237	225	176
Taxation	35	68	162	328	569

Appendix B2 — Annual capital deployment by asset class

Capital expenditure by asset class and year (ZAR millions), driving the depreciation schedule and net PP&E build.

Asset class (R m)	Y1	Y2	Y3	Y4	Y5
Manufacturing plant & equip.	495	385	220	–	–
Logistics fleet	250	150	100	–	–
Warehousing & DCs	88	88	44	–	–
Polymer production plant	195	260	195	–	–
Technology systems	110	66	44	–	–
Export infrastructure	24	48	48	–	–
Renewable energy systems	30	40	30	–	–
Acquired tangible assets	210	140	–	–	–
Goodwill (acquisitions)	120	80	–	–	–
Maintenance capex	–	–	–	222	310
Total capex	1,522	1,257	681	222	310

Appendix B3 — Covenant headroom

The model tests comfortably against conventional lending covenants in every year, with meaningful headroom that widens as the Group deleverages.

Covenant	Threshold	Y1	Y2	Y3	Y4	Y5
DSCR (min)	≥ 1.30x	3.77x	3.09x	2.47x	2.07x	2.56x
Net debt/EBITDA (max)	≤ 3.00x	0.35x	1.85x	1.45x	0.72x	0.24x
Interest cover (min)	≥ 2.00x	2.60x	2.28x	3.52x	6.40x	12.97x

Appendix C — Key ratios summary

	Year 1	Year 2	Year 3	Year 4	Year 5
EBITDA margin	14.1%	16.4%	17.8%	19.6%	21.0%
EBIT margin	8.7%	10.9%	13.3%	16.2%	18.4%
Net margin	3.9%	4.5%	6.9%	10.0%	12.4%
ROCE	5.1%	8.8%	14.7%	23.8%	33.3%
Net debt / EBITDA	0.35x	1.85x	1.45x	0.72x	0.24x
DSCR	3.77x	3.09x	2.47x	2.07x	2.56x
Interest cover	2.60x	2.28x	3.52x	6.40x	12.97x
Capital employed (R m)	2,986	3,714	4,150	4,420	4,996

Figure 27. *Year-5 revenue-to-profit decomposition*

Appendix D — Employment & development impact

Department	Direct jobs
Manufacturing	2,800
Logistics	1,200
Engineering	260
Administration	190
Technology & Analytics	180
Management	70
Total direct employment	4,700

Appendix E — Detailed assumptions register

The following register consolidates every material assumption underpinning the model, so that a reviewer can vary any single input and understand its effect. Assumptions are grouped by statement.

Assumption	Value / basis
Projection horizon	5 years (Year 1 = FY2027)
Reporting currency	ZAR millions
Revenue Year 1→Year 5	R2.4bn → R12.4bn (sponsor targets, preserved)
EBITDA margin path	14.1% → 21.0% (sponsor targets, preserved)
Depreciation method	Straight-line, component useful lives 5–20 years
Manufacturing/polymer plant life	15 years
Logistics fleet life	7 years
Warehousing/export/renewables life	20 years
Technology systems life	5 years
Goodwill	Not amortised; impairment-tested
Senior debt	R2.28bn (60% of funding)
Equity	R1.52bn (40% of funding)
Blended cost of debt	11.5% (prime 10.5% + ~100bps)
Debt drawdown	Y1 R1,400m, Y2 R600m, Y3 R280m
Principal repayment	Grace Y1–2; amortise Y3–Y5
Corporate tax rate	27% (South Africa)
Assessed-loss set-off cap	80% of taxable income (post-2022)
Net working capital	13% of revenue
Dividend policy	30% of positive net profit
Maintenance capex (Y4–Y5)	~2.5% of revenue
Exit assumption (base)	5.5x EV/EBITDA on Year-5 EBITDA
Cost of equity (discount rate)	18%

Appendix F — Glossary of terms

Term	Definition
EBITDA	Earnings before interest, tax, depreciation and amortisation
EBIT	Earnings before interest and tax (EBITDA less depreciation)
NPAT	Net profit after tax
DSCR	Debt-service cover ratio: cash available for debt service ÷ debt service
CFADS	Cash flow available for debt service (EBITDA − tax − maintenance capex)
ROCE	Return on capital employed: NOPAT ÷ (equity + debt)
IRR	Internal rate of return
MOIC	Multiple of invested capital (money multiple)
NWC	Net working capital
DFI	Development finance institution
AfCFTA	African Continental Free Trade Area
EPR	Extended Producer Responsibility
OEM	Original equipment manufacturer
SADC	Southern African Development Community
EV/EBITDA	Enterprise value as a multiple of EBITDA

Disclaimer. This Plan contains forward-looking projections based on assumptions believed reasonable at the date of preparation. Actual results may differ materially. The financial model preserves sponsor revenue and EBITDA targets and independently re-derives all other line items; it does not constitute audited financial statements, investment advice, or an offer of securities. Prospective investors should obtain independent professional advice.