Sireletso Protective Group Business Plan — Break-Even
The contract and officer count needed to cover the cost base, and when the business crosses its own break-even.
Break-Even
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- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. Transaction and Funding Summary
- 3. Business Overview
- 4. Market Analysis
- 5. SWOT and Competitive Position
- 6. Service Offering and Revenue Model
- 7. Operations
- 8. Regulatory and Compliance Framework
- 9. Business Development and Client Acquisition
- 10. Management and Organisation
- 11. Financial Projections
- 12. Working Capital: The Central Finding
- 13. Funding Structure and Debt Service
- 14. Break-Even
- 15. Sensitivity and Scenarios
- 16. Risk Management
- 17. Implementation Roadmap
- 18. Investment Returns
- 19. Key Performance Indicators
- 20. Key Assumptions
- 21. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Application and Sources of Funds
- C. Appendix C: Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
|
Measure |
Value |
Basis |
|---|---|---|
|
Gross margin, Year 3 |
38.1% |
After the direct cost of protective personnel |
|
Variable overheads |
6.0% of revenue |
Scales with deployment |
|
Contribution margin |
32.1% |
Gross margin less variable overheads |
|
Cash fixed cost |
R16.88m |
Overhead salaries plus fixed overheads |
|
Break-even revenue, cash costs |
R52.59m |
Fixed cost divided by contribution margin |
|
Term debt service, Year 3 |
R3.80m |
Interest plus capital |
|
Break-even revenue including debt service |
R64.42m |
The level at which the Company can stand still |
|
Projected Year 3 revenue |
R80.96m |
Headroom of 26% above the debt-inclusive break-even |
On the Year 3 cost structure the Company requires R52.59 million of annual revenue to cover its cash costs and R64.42 million to cover cash costs plus term debt service. Projected Year 3 revenue of R80.96 million provides headroom of 26 per cent above the debt-inclusive break-even.
That break-even is high in absolute terms — the Company must sustain roughly R64.42 million of annual revenue, equivalent to more than a hundred deployed personnel, simply to stand still. It is the direct consequence of the fixed establishment described in Section 10, and it is the reason a sub-scale version of this business is not viable.
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|---|---|---|---|---|---|
|
Revenue |
34.08 |
65.60 |
80.96 |
94.76 |
107.17 |
|
Break-even, cash costs |
38.42 |
46.37 |
52.59 |
57.74 |
62.41 |
|
Break-even including term debt service |
44.61 |
55.32 |
64.43 |
69.70 |
74.48 |
|
Headroom above the debt-inclusive break-even |
-24% |
19% |
26% |
36% |
44% |