19.1 Basis of preparation

The projections are prepared on a monthly basis over sixty months from 1 January 2027 and aggregated to the annual presentation that follows. The financial year ends on 31 December. The three primary statements are fully integrated: the income statement drives retained earnings; working capital movements and capital expenditure drive the cash flow; the cash flow drives the revolver balance; the revolver balance drives interest, which returns to the income statement. Interest is solved iteratively to convergence rather than calculated on opening balances, so the circularity is resolved rather than approximated.

19.2 Key assumptions

Table 31: Key modelling assumptions

A complete assumption register is provided at Appendix A.

Two assumptions deserve attention in diligence. Practical press capacity of 420,000 A3 clicks per month is realistic for this press class on two shifts but is sensitive to job mix, since a plant running many short jobs loses more time to make-ready. The prime rate is held flat at 10.5% across five years, a simplifying convention rather than a forecast; Section 22 tests a 200 basis point increase.

19.3 Projected income statement

Table 32: Projected income statement

No taxation is payable in FY2027–FY2029 as assessed losses are carried forward. From FY2030 the 80% assessed-loss utilisation cap applies, which is why a small charge arises in FY2030 despite accumulated losses of R10.5m brought forward.

The pattern is the one a greenfield manufacturing ramp produces. Gross margin is established early and remains stable in a narrow band between 43.8% and 47.0%, because it is a function of price and material yield rather than scale. Everything that changes between FY2027 and FY2031 happens below the gross profit line: operating expenditure grows by 97% while revenue grows by 333%, and that divergence is the entire margin story. The business is not becoming better at printing; it is spreading a substantially fixed overhead across a much larger revenue base.

19.4 Projected balance sheet

Table 33: Projected balance sheet

The balance sheet reconciles in every projected period; the largest residual across the five years is under R60.

Retained earnings remain negative throughout. Accumulated losses peak at R10.5m at FY2029 and are still R1.6m at FY2031, which has two practical consequences worth stating plainly: the company has no distributable reserves and therefore no capacity to pay a dividend across the entire plan period, and the equity return depends wholly on capital appreciation at exit. Total equity nonetheless recovers to R20.4m by FY2031 because R22.0m of paid-in capital sits behind the accumulated deficit.

19.5 Projected cash flow

Table 34: Projected cash flow statement

Cash is held at the R1.2m operating minimum through FY2030 with the revolver absorbing the balance; the surplus in FY2031 reflects full revolver repayment.

The cash flow makes the financing dependency explicit. Operating cash flow is negative R9.4m in FY2027 and only R0.8m in FY2028, a year in which R3.5m of debt service falls due. The gap is bridged by the revolver, which is why facility headroom rather than profitability is the binding constraint through the ramp.

19.6 Capital expenditure

Table 35: Capital expenditure schedule

Section 12C provides a 40/20/20/20 allowance on new manufacturing plant; section 11(g) applies to leasehold improvements; section 11(e) wear-and-tear rates apply to IT, vehicles and fittings.

Opening capital expenditure of R24.6m is fully committed at close. Expansion capital of R16.3m across months 24 to 48 is discretionary in timing and is gated on utilisation triggers rather than dates, a distinction that matters because, as Section 22 shows, deferring the month-24 tranche is the single most effective downside response available to management.

19.7 Working capital

Table 36: Working capital and cash conversion

The cash conversion cycle of 49 days means that every additional rand of annual revenue absorbs approximately 13.4 cents of cash before it contributes anything. Over the plan, revenue growth of R52.3m absorbs R6.7m of working capital, a material claim on the funding package and the principal reason a revolver, rather than additional term debt, is the right instrument for the ramp.

19.8 Debt schedule

Table 37: Debt facilities and terms

Closing debt peaks at R20.8m in FY2029 as the expansion tranche is drawn, then falls to R10.8m by FY2031 as amortisation exceeds new drawings and the revolver is fully repaid. Peak revolver utilisation is R6.8m in month 37, leaving headroom of R0.7m against the R7.5m limit, a margin of under ten per cent of the facility at the tightest point, and the single most important liquidity figure in the plan.