Precision Coachworks Business Plan — Key Assumptions

Every throughput, pricing, cost, capital and funding assumption behind the model, and those most in need of independent verification.

Key Assumptions

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16.1 Capacity, throughput and pricing
16.2 Capital, cost and funding
16.3 Assumptions most in need of independent verification

16.1 Capacity, throughput and pricing

Assumption	Year 1	Year 5	Basis
Spray booths	1	2	Second booth added in Year 3, once two panel listings are secured
Booth cycles a day	2.4	2.4	Spray-and-bake cycle over 245 working days
Floor positions	16	38	Phased behind demonstrated volume
Key-to-key cycle time	14.0 days	9.0 days	The largest single lever. Below 8.5 days the booth binds
Utilisation	48%	81%	Against the binding constraint, which is the floor in every year
Vehicles repaired	134	838	Capacity multiplied by utilisation
Average repair value	R35 821	R34 987	Approximately R35 000, driven by the structural mix and warranty share
Labour share of invoice	32.0%	32.0%	At a 63% gross margin after productive wages
Paint and materials share	16.0%	16.0%	At a 46% gross margin
Parts share	52.0%	52.0%	At a 23% gross margin. Insurers direct sourcing and permitted markup
Blended gross margin	39.5%	39.5%	Stable, because the mix does not change materially with volume

16.2 Capital, cost and funding

Assumption	Value	Basis
Spray booths	R4 600 000	Two heated, filtered, downdraught booths at R2.30m each
Premises fit-out and compliance	R1 560 000	Air emissions, waste handling, fire and effluent compliance
Chassis bench and electronic measuring	R1 380 000	Required for structural grading and manufacturer approvals
Prep bays, welding, tools and paint mixing	R3 270 000	Prep and flatting stations, MIG/MAG/spot/aluminium welding, spectrophotometer
Solar, systems and accreditation	R1 510 000	Production-critical power, estimating platform, SAMBRA and Bureau Veritas audit
Equipment, fit-out and accreditation	R12 320 000
Working capital and the insurer debtor book	R4 980 000	Sized against 52 debtor days and R4.45m of operating cash consumption in Years 1 to 3
Total capital deployed	R17 300 000
Overhead	R3 671 000 rising to R7 470 000	Premises, production team, estimators, compliance and administration
Depreciation	Phased asset schedule	Booths and bench over 12 years; fit-out, prep and solar over 10; welding, tools and paint mixing over 8; accreditation and systems over 3
Promoter and investor equity	R12 100 000	70% of capital deployed
Asset finance	R5 200 000	Drawn against equipment at 42% of cost, 13.25% over seven years per tranche
Capital moratorium	Three years	Interest paid from Year 1; principal from Year 4
Corporate tax	27% with assessed losses carried forward	Section 20 limitation applied; no tax before Year 5
Insurer debtor days	52 days	The single largest working capital driver
Creditor days	35 days
Work in progress	7 days	Vehicles on the floor at cost
Exit multiple	5.0x Year 5 EBITDA	Driven by accreditation standing, panel listings and the production team

16.3 Assumptions most in need of independent verification

Assumption	Modelled	Verification required	Consequence if wrong
Two insurer panel listings within 18 months	Secured by Month 14	Documented engagement with at least three insurers against their published accreditation standards	The equipment has no work. This is the assumption on which everything else depends
A production manager capable of a nine-day cycle	Appointed at Month 1	Direct market testing in the chosen metro; references on cycle-time performance	Cycle time is the largest single sensitivity, worth R4.24m of Year 5 EBITDA across its range
Working capital at 52 insurer debtor days	R4.18m tied up at Year 5	Settlement history from the insurers concerned, not a sector average	A shop can be profitable and still fail on cash. Sixty-five days would add R1.04m to the requirement
Average repair value of about R35 000	Held broadly flat across five years	Claim data for the chosen catchment by structural and non-structural mix	A 12% shortfall removes R1.39m of Year 5 EBITDA
Manufacturer approval for two marques by Year 3	First granted in Year 2	Direct engagement with the manufacturers on facility, equipment and training requirements	In-warranty accident volume — the higher-value pool the second booth is sized for — does not arrive
Qualified panel beaters and sprayers recruitable	14 by Year 5 plus 4 apprentices	Local availability testing against MIBCO grades; merSETA provider access for the apprentice programme	Floor positions cannot be staffed. The provider shortage makes this a first-order risk
Parts margin at 23%	Held flat	Supplier terms and insurer permitted markup for the panels applied to	The variable management controls least. A six-point compression costs R914 460
Asset finance with a three-year moratorium	R5.2m at 13.25%	Written terms from an equipment financier before drawdown	Principal cannot be serviced before Year 4 and the facility breaches on its first test

The list is ordered by consequence. The first three determine whether the business functions at all, and all three can be tested by enquiry, engagement and reference-checking before the bulk of the capital is committed. The next three determine the volume and value of the work. The last two determine whether the margin and the financing structure hold as designed.

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