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Business Plan Africa Investor-Ready Plans

Sireletso Protective Group Business Plan

Investor-ready security company business plan: R26.56m at financial close, close protection and executive risk services, Year 5 revenue R107.17m.

Sireletso Protective Group — specialist close protection and executive risk services, South Africa
Business Plan & Investment Proposal · Sandton, Johannesburg

Security Company Business — South Africa

Sireletso Protective Group · A Labour And Working Capital Business.

Specialist close protection and executive risk services based in Sandton, Johannesburg.
Total funding of R26.56 million at financial close — R11.95 million equity at 45% and a
R14.61 million senior term loan at 55% — with an invoice discounting facility of up to
R12.00 million alongside to carry the payroll-to-collection gap.

R26.56mFunding at close
168Officers by Year 5
R107.17mYear 5 revenue
23.1%Project IRR

Read the executive summary →

The plan states what it is on its own cover: a labour and working capital business.
There is almost no plant, no meaningful fleet and nothing to depreciate — revenue is simply the number of
officers deployed multiplied by the rate a client pays, growing from an average of 71 officers to 168 by Year 5.
Which makes the second half of that sentence the one an investor should read hardest. Officers are paid weekly;
corporate clients settle in 45 to 60 days. That gap absorbs R17.47 million of cash by Year 5, roughly
44 cents of every rand of cumulative EBITDA the business generates. The R12.00 million invoice
discounting facility is therefore not a contingency — it is what allows a profitable company to make payroll
while it grows.

The plan at a glance

Six measures that determine whether this company and its funding stand up.

R26.56mFunding at financial closeR11.95m equity at 45% and a R14.61m senior term loan at 55%, with an invoice discounting facility of up to R12.00m alongside.
168Deployed officers at Year 5From an average of 71 in Year 1. Revenue is a function of officers deployed, not of assets owned.
R17.47mWorking capital absorbed by Year 5Cumulative. This is the central finding of the plan and the reason the discounting facility is structural rather than optional.
37.5%Year 5 gross marginDrifting down from 38.5% as wage inflation runs slightly ahead of contract rate escalation.
13.2%Year 5 EBITDA marginFrom a R1.40 million deficit in Year 1, on revenue of R107.17 million.
23.1% / 38.5%Project and equity IRRThe project return is the more conservative measure; the equity return is geared at 45:55.

Where the earnings actually go

The plan calls this its central finding, and it is the right call — a profitable security company can still run out of cash.

R39.88mCumulative EBITDA to Year 5What the operation earns over the five years on the base case, once Year 1 mobilisation losses are absorbed.
of which
R17.47mIs absorbed by working capitalOfficers are paid weekly; clients settle in 45 to 60 days. Roughly 44 cents in every rand of EBITDA funds that gap rather than reaching shareholders.

Five years of trading

Revenue and EBITDA on the base case. Wage inflation and debtor days are the two assumptions that matter most, and both are stressed in Section 15.

Revenue build, Year 1 to Year 5

Revenue follows deployed officers — from 71 on average in Year 1 to 168 by Year 5. Gross margin drifts gently down from 38.5% to 37.5% as wage inflation runs slightly ahead of contract rates.

Year 1

R34.08m

Year 2

R65.60m
Year 3

R80.96m
Year 4

R94.76m
Year 5

R107.17m

EBITDA and margin, Year 2 onward

Year 1 runs an EBITDA deficit of R1.40 million during mobilisation. Note that profit after tax stays negative into Year 2 — EBITDA turning positive is not the same as the business earning.

Year 2

R6.22m · 9.5%
Year 3

R9.14m · 11.3%
Year 4

R11.81m · 12.5%
Year 5

R14.11m · 13.2%

Why this plan works

1
Labour is the product and the costThere is no plant, no fleet of significance and no inventory to speak of. Revenue is officers deployed multiplied by contract rate, and roughly six rands in every ten paid to the company go straight back out as wages.
2
Working capital is the binding constraintOfficers are paid weekly. Clients settle in 45 to 60 days. That timing gap absorbs R17.47 million by Year 5 — the plan names it as the central finding rather than leaving a funder to find it.
3
The discounting facility is structuralUp to R12.00 million of invoice discounting is not a contingency line. Without it the company would be profitable and still unable to make payroll during the growth years.
4
PSIRA registration is the licence to tradeRegistration, firearm competency and training standards are non-negotiable and slow to assemble. They are a cost of entry and, once held, a barrier protecting the position.
5
Margin drifts, and the plan says soGross margin declines from 38.5% to 37.5% because wage inflation runs slightly ahead of contract escalation. The model assumes that squeeze rather than assuming it away.

Financial snapshot

Four charts from the plan. The full set of twenty-four appears throughout the sections below.

Structural gross margin compression
Figure 9. Structural gross margin compression.
Deployed personnel and revenue per officer
Figure 10. Deployed personnel and revenue per officer.
Balance sheet — asset composition
Figure 14. Balance sheet — asset composition.
The debtor book against the facility that funds it
Figure 18. The debtor book against the facility that funds it.

Contents

Twenty-one sections and five appendices. Every page carries full navigation, a section outline and links to the sections either side of it.


!
Important NoticeBasis of preparation, data sources, forward-looking statement caveats and confidentiality terms. Please read first.

Appendices
Confidential. This document has been prepared in support of a funding proposal by
Sireletso Protective Group and may not be reproduced or distributed without written consent. Projections are forward-looking
statements based on the assumptions registered in Appendix C and are not guarantees of future performance.