Service Offering and Revenue Model

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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

6.1 Service lines

Volumes above are expressed at the Year 1 exit run rate.

The dedicated close protection line is the annuity core of the business. A full-time protective detail assigned to a named principal, billed monthly per officer. A single principal requiring genuine 24-hour coverage consumes four to five officers once rotation, leave and relief are accounted for, which is why this line dominates both revenue and deployed headcount. Gross margin at 36 per cent reflects that officer remuneration, benefits, bargaining council contributions and equipment amortisation are all direct costs of the line.

Residential and estate protection at 26 per cent is the lowest-margin line in the business and is deliberately grown more slowly than every other. It is retained because principals expect an integrated solution and because a competitor holding the residential contract has a route to the protective work, not because it is attractive in its own right.

Risk advisory and threat assessment at 72 per cent is by a wide margin the highest-margin line, it consumes almost no deployed headcount, and it is the line that most differentiates the Company from a supplier of bodies. It is grown fastest in the projection for that reason.

6.2 Margin structure and revenue mix

The mix shifts deliberately across the projection. Residential guarding is grown at below the blended rate, while advisory, training and dedicated details are grown above it. That mix improvement is real but it is working against a headwind, explained in the following section.

6.3 The wage escalation problem

Direct cost in this business is overwhelmingly protective labour. Remuneration in the private security sector escalates under sectoral determination and bargaining council arrangements, and those increases have historically run above headline consumer inflation. The model assumes contract rates escalate at 6.0 per cent per annum while direct labour escalates at 6.7 per cent.

The consequence is a slow, structural compression of gross margin, from 38.5 per cent in Year 1 to 37.5 per cent in Year 5, even before any competitive pressure on rates. This is not a modelling pessimism; it is the defining margin dynamic of South African security services, and it is the reason the plan shifts mix toward advisory and training rather than simply selling more officer-months.