Rosebank Workspace Business Plan — Projected Financial Statements

Five-year projections: revenue to R73.4m, EBITDA to R14.2m and profit after tax turning positive in FY2029.

Section 21 of 29

Projected Financial Statements

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Two years of losses, a third year of modest profit, a fourth year compressed by the Waterfall City opening, and a fifth year at 19.3% EBITDA margin. The balance sheet reconciles to nil in all sixty periods.

20.1 Projected income statement

Table 56 Projected income statement (R million)

	2027	2028	2029	2030	2031
Revenue	8.4	31.0	47.2	61.7	73.4
Direct centre costs	(10.0)	(25.1)	(31.4)	(44.7)	(48.5)
Centre contribution	(1.7)	6.0	15.8	17.0	24.9
Contribution margin	-19.8%	19.3%	33.4%	27.6%	33.9%
Central overhead	(5.5)	(7.8)	(8.8)	(10.6)	(10.7)
EBITDA	(7.1)	(1.8)	6.9	6.4	14.2
EBITDA margin	-84.9%	-5.7%	14.7%	10.3%	19.3%
Depreciation	(1.6)	(3.0)	(3.4)	(4.2)	(4.0)
EBIT	(8.7)	(4.8)	3.6	2.2	10.2
Net finance costs	(1.7)	(2.0)	(1.6)	(1.4)	(0.9)
Profit before tax	(10.4)	(6.8)	2.0	0.8	9.3
Taxation	–	–	(0.1)	(0.1)	(0.5)
Net profit after tax	(10.4)	(6.8)	1.8	0.7	8.8
Net margin	-123.8%	-21.8%	3.9%	1.1%	12.0%

Source: Company financial model. Figures in brackets are negative. Taxation in FY2029 to FY2031 reflects the 80% limitation on assessed loss utilisation, which is why a charge arises before the accumulated loss is fully absorbed.

Three features of the income statement warrant comment. First, FY2027 contribution is negative at (1.7) because the Rosebank lease, staff and utilities run for a full year against four months of partial-occupancy trading, this is the unavoidable cost of opening. Second, FY2030 EBITDA falls in absolute terms despite revenue growing 31%, because Waterfall City contributes a full year of rent and staff against nine months of ramping revenue. Third, the FY2031 net margin of 12.0% is flattered by minimal taxation; on a fully taxed basis it would be approximately 9.3%.

20.2 Revenue and cost composition

Table 57 Revenue by line (R million)

	2027	2028	2029	2030	2031	% FY2031
Private suites	4.8	18.2	28.1	36.7	43.9	59.8%
Dedicated desks	1.0	3.8	5.8	7.6	9.0	12.3%
Flexible memberships	0.8	2.9	4.3	5.7	6.7	9.1%
Virtual office	0.8	2.9	4.1	5.3	6.2	8.4%
Parking	0.3	1.3	1.9	2.5	3.0	4.1%
Meeting rooms and events	0.3	1.2	1.9	2.4	2.9	3.9%
Other ancillary	0.2	0.7	1.1	1.4	1.7	2.3%
Total revenue	8.4	31.0	47.2	61.7	73.4	100.0%

Table 58 Direct centre costs and central overhead by line (R million)

	2027	2028	2029	2030	2031	% FY2031
Property rental	5.2	13.6	17.5	24.3	26.7	36.3%
Centre staff	1.9	4.3	5.2	7.5	7.9	10.8%
Utilities	1.5	3.4	4.0	6.0	6.4	8.7%
Cleaning and security	0.8	1.8	2.2	3.3	3.5	4.8%
Connectivity and IT	0.4	1.1	1.6	2.3	2.6	3.5%
Community and member services	0.1	0.4	0.6	0.8	0.9	1.2%
Maintenance	0.2	0.3	0.4	0.5	0.5	0.7%
Total direct centre costs	10.0	25.1	31.4	44.7	48.5	66.1%
Head office payroll	2.7	3.6	4.5	4.8	5.1	6.9%
Marketing	0.3	1.1	1.7	2.2	2.6	3.5%
Corporate overhead	1.7	2.2	2.4	2.8	3.0	4.1%
Brokerage	0.7	0.9	0.3	0.9	0.1	0.1%
Total central overhead	5.5	7.8	8.8	10.6	10.7	14.6%

20.3 Projected balance sheet

Table 59 Projected balance sheet (R million)

	2027	2028	2029	2030	2031
Cash and cash equivalents	14.3	12.0	6.9	10.8	20.4
Trade and other receivables	0.2	0.5	0.7	0.9	1.0
Prepayments	0.1	0.2	0.2	0.2	0.2
Property, plant and equipment — gross	14.3	25.3	34.7	35.3	35.6
Accumulated depreciation	(1.6)	(4.6)	(8.0)	(12.2)	(16.2)
Property, plant and equipment — net	12.7	20.7	26.6	23.1	19.4
Total assets	27.3	33.3	34.4	35.1	41.0
Trade and other payables	1.8	3.2	3.6	4.9	5.2
Deferred revenue	0.8	1.8	2.2	3.1	3.4
Member deposits	1.0	2.4	2.9	4.1	4.4
Senior term debt	12.0	10.7	8.0	5.3	2.7
Asset finance	2.1	3.4	4.0	3.3	2.1
Revolving credit facility	–	–	–	–	–
Total liabilities	17.7	21.5	20.7	20.7	17.8
Share capital	20.0	29.0	29.0	29.0	29.0
Accumulated profit / (deficit)	(10.4)	(17.1)	(15.3)	(14.6)	(5.8)
Total equity	9.6	11.9	13.7	14.4	23.2
Total equity and liabilities	27.3	33.3	34.4	35.1	41.0
Balance check	nil	nil	nil	nil	nil

Source: Company financial model. The balance check is the difference between total assets and the sum of equity and liabilities, and is nil in all sixty monthly periods.

Total equity remains negative through FY2030 and turns positive in FY2031 only because the accumulated deficit of (5.8) is smaller than the R29.0m of share capital subscribed. The accumulated deficit does not clear entirely within the projection period; on current trajectory it is absorbed during FY2032. This has a practical consequence: the Company cannot lawfully declare a dividend until the deficit is extinguished, which supports the plan’s assumption that no distributions are made before exit.

20.4 Projected cash flow statement

Table 60 Projected cash flow statement (R million)

	2027	2028	2029	2030	2031
EBITDA	(7.1)	(1.8)	6.9	6.4	14.2
Working capital movement	3.2	3.5	1.1	3.1	0.8
Taxation paid	–	–	(0.1)	(0.1)	(0.5)
Net finance costs	(1.7)	(2.0)	(1.6)	(1.4)	(0.9)
Cash flow from operations	(5.6)	(0.2)	6.3	8.0	13.6
Capital expenditure	(17.7)	(14.2)	(11.7)	(0.7)	(0.2)
Landlord installation allowances received	3.4	3.2	2.4	–	–
Cash flow from investing	(14.3)	(11.0)	(9.3)	(0.7)	(0.2)
Equity subscribed	20.0	9.0	–	–	–
Senior debt drawn	12.0	–	–	–	–
Senior debt repaid	–	(1.3)	(2.7)	(2.7)	(2.7)
Asset finance drawn	2.5	2.0	1.6	0.5	0.2
Asset finance repaid	(0.4)	(0.8)	(0.9)	(1.3)	(1.3)
Cash flow from financing	34.1	8.9	(2.0)	(3.4)	(3.8)
Net movement in cash	14.3	(2.3)	(5.0)	3.9	9.5
Opening cash	0.0	14.3	12.0	6.9	10.8
Closing cash	14.3	12.0	6.9	10.8	20.4

Figure 1. Cash flow bridge and closing cash balance by year

Cash reaches its lowest annual closing point of R6.9m at December 2029, immediately before the Waterfall City fit-out draws R0.7m during FY2030. The R10.0 million revolving facility is not drawn in the base case in any month, but it is the reason the Waterfall City decision can be taken at all: without committed standby liquidity, opening a third centre from a cash balance of R6.9m would be imprudent.