Midrand Print Company Business Plan — Strategic Plan

Strategic objectives across the five years and the sequencing of capacity, including the second press.

Section 15 of 28

Strategic Plan

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14.1 Where to play

Dimension	Where to play	Where not to play	Rationale
Geography	Gauteng, with courier-served national delivery	Second physical facility in another province	A second plant cannot be justified below 70% Gauteng utilisation; the plan reaches 54.0%
Client size	50+ outlets, centralised marketing, R3m–R12m print spend	Enterprise accounts above R25m spend	Above that threshold, national print-management bureaux hold structural advantages the company cannot match
Product	Short-run digital, wide-format, rigid display, fulfilment	Long-run litho, packaging, labels, security print	Different capital, different economics, different customers
Work type	Contracted programmes and repeat campaign work	Open tender transactional print	Tendered work is won on price and lost on renewal; it consumes sales capacity without building switching cost

Table 23: Where to play and where not to

14.2 How to win

Three capabilities, in order of difficulty to acquire and therefore in order of defensive value.

Production ownership. Straightforward to buy and the least defensible of the three, but it is the entry condition, without it, the turnaround promise is someone else’s to keep.
Brand governance and template libraries. Built over years within each client relationship. This is the layer that creates switching cost and it is the reason the platform investment is made at close rather than when revenue justifies it.
Scheduling and mix optimisation. The ability to move work profitably between digital, roll and rigid according to the order book. Hard to buy, hard to observe from outside, and the reason two plants with identical equipment produce materially different margins.

14.3 Strategic objectives and measures

Objective	Measure	FY2028	FY2029	FY2030	FY2031
Build contracted revenue base	Programme accounts	18	25	31	36
Absorb fixed cost through scale	Revenue (R m)	32.6	47.1	58.2	67.9
Convert scale into margin	EBITDA margin	11.6%	16.5%	19.1%	20.9%
Restore balance-sheet strength	Net debt / EBITDA	2.96x	2.53x	1.56x	0.55x
Earn the cost of capital	ROIC	0.7%	6.1%	12.0%	20.5%

Table 24: Strategic objectives translated into measurable targets

ROIC is calculated on after-tax EBIT over closing capital employed. The weighted average cost of capital is 15.7%.

The final row is the uncomfortable one. Return on invested capital does not exceed the cost of capital until FY2031. For four of the five plan years the business earns less than the capital deployed in it costs, which is normal for a greenfield ramp and is nonetheless the reason this is a capital-appreciation case rather than a cash-yield one, and the reason Section 21 is careful about which investors it suits.

14.4 Capability and system requirements

Capabilities to build. Programme design and template governance (from month 1); consultative pilot-led selling (month 4); multi-line production scheduling (month 3); credit and collections discipline (month 1).
Systems to install. MIS with integrated estimating, scheduling, stock and invoicing; web-to-print ordering with role-based approval; colour management to a documented standard; monthly management reporting against the Section 23 KPI set from month 1, not from first profitability.
What is deliberately not built. In-house design studio beyond artwork preparation; installation teams for signage; national facility footprint; litho capability at any run length.