Sakhile Construction Business Plan — Sensitivity and Scenarios

How the plan responds to margin erosion, payment delay and contract volume moving against it, with downside and upside cases.

Sensitivity and Scenarios

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16.1 Single-variable sensitivity
16.2 Scenarios

16.1 Single-variable sensitivity

Figure 20. Sensitivity of Year 5 EBITDA.

Driver	Effect on Year 5 EBITDA	As a share of base
Gross margin ±3 percentage points	±R1.56m	±44%
Turnover ±15%	±R1.46m	±41%
Materials cost ±10%	±R1.95m	±55%
Site labour ±10%	±R1.14m	±32%
Overhead ±10%	±R0.62m	±18%
Debtor days +30 (financing cost)	(R0.62m)	±18%
Year 5 base case EBITDA	R3.52m

Materials at R1.95 million for a ten per cent movement is the largest single exposure, followed by gross margin at R1.56 million for three percentage points and turnover at R1.46 million for fifteen per cent. All three are estimating exposures rather than market ones: a ten per cent materials movement is priced into a bid or it is not, and a three-point margin miss is an estimating failure by definition.

Figure 21. Year 5 EBITDA across gross margin and debtor days.

The grid makes the central point of this plan visible. Reading across a row, debtor days change nothing at the EBITDA line — they change the financing cost below it and the facility required to trade at all. Reading down a column, three percentage points of gross margin moves EBITDA by R1.56 million, which is 44 per cent of the base case. Payment delay is a funding problem; margin is a survival problem, and they are managed by different people using different disciplines.

16.2 Scenarios

Figure 22. Year 5 EBITDA and profit after tax across scenarios.

Scenario	Definition	Year 5 turnover	Year 5 EBITDA	Profit after tax
Base	The plan as presented: R52.00m turnover at 18.7% gross margin, 54 debtor days.	R52.00m	R3.52m	R0.31m
Payment delay	Debtor days 30 above plan; the facility must carry it and the financing cost lands in the P&L.	R52.00m	R2.90m	(R0.31m)
Order book shortfall	Turnover 15% below plan on a delayed public award or a cancelled private project.	R44.20m	R2.06m	(R1.15m)
Margin miss	Gross margin three points below plan — the difference between good and poor estimating.	R52.00m	R1.96m	(R1.25m)
Margin and delay	Three points of margin lost and 30 additional debtor days in the same year.	R52.00m	R1.34m	(R1.87m)

Only the base case produces a profit after tax in Year 5, and none of the alternatives is extreme

Three percentage points of gross margin is the difference between a well-estimated contract and a poorly estimated one — not between competence and disaster. Fifteen per cent of turnover is one delayed public award and one cancelled private project. Thirty additional debtor days is a single large public client paying at ninety days instead of sixty-eight, which the CIDB’s own reporting suggests happens to sixty per cent of contractors. Each of these on its own removes the Year 5 profit; the margin miss and the payment delay together take the business to a R1.87 million loss in what should be its best year. That is the honest characterisation of the risk: this is a business with a 6.8 per cent EBITDA margin funding a 66-day cycle, and it has very little tolerance for anything going moderately wrong.

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