Working capital exhaustion

High

Very High

Invoice discounting facility as a condition of the transaction; credit controller from Year 2; invoicing within two business days of month end; concentration limits; weekly debtor age review. Without the facility the business is cash-negative throughout.

Finance director

Serious incident on a protective detail

Low

Very High

No deployment without current registration, competency, qualification and first aid; written threat assessment per detail; live control room monitoring; fatigue-limited rostering; full liability and indemnity cover.

Operations director

Collections stretching beyond 70 days

Medium

Very High

The facility is exhausted at 70 days while the covenant is set at 75. Tighten the covenant to 68 days or raise the limit to R14.00m. Client credit assessment before first deployment.

Finance director and lender

Wage escalation above rate escalation

High

High

Client escalation linked to the wage determination rather than CPI; CPI-linked contracts priced to absorb the differential over the full term; mix shifted toward advisory and training.

Managing director

Officer supply shortfall

High

High

The accredited academy manufactures the pipeline; recruitment maintained a quarter ahead of deployment need; PSIRA registration takes six to twelve weeks per individual.

Operations director

PSIRA registration lapse

Low

Very High

An event of default under the term facility. Registration currency tracked per officer as a KPI and certified quarterly to the lender.

Compliance officer

Revenue shortfall against plan

Medium

High

15% below plan takes the project return to 13.4%. Advisory growth is the response because it adds margin without headcount or working capital.

Managing director

Loss of a major contract at renewal

Medium

High

120-day pre-expiry threat reassessment as the retention mechanism; target renewal rate above 85%; concentration limits.

Managing director

Firearm licence delay or refusal

Medium

High

Section 20 applications lodged in month one; armed deployment is the majority of the protection book and the timeline is outside the Company’s control.

Compliance officer

Exit multiple below assumption

Medium

High

At 4.0x the project return falls to 18.8% and the equity return to 31.4%. Contracted annuity revenue and the accredited academy are what support the multiple.

Board

Overhead overrun

Medium

Medium

6% above plan takes the project return to 20.9%. The establishment is what corporate procurement is buying and cannot be cut without losing the position.

Finance director

Key person dependency

Medium

Medium

Independent non-executive appointment from Year 2; documented operating procedures; a commercial director appointed in Year 5.

Board