Financial Projections

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. The Opportunity
• 3. Market and Regulatory Context
• 4. Product, Technology and Security
• 5. Go-to-Market and Unit Economics
• 6. SWOT and Competitive Position
• 7. Financial Projections
• 8. Cash, Funding and the Balance Sheet
• 9. Sensitivity and Scenario Analysis
• 10. Risk Analysis
• 11. Regulatory, Compliance and Licensing
• 12. Organisation and Management
• 13. Implementation Roadmap
• 14. Key Performance Indicators
• 15. The Offer, Returns and Recommendation
• 16. Assumption Register
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Volume, Pricing and Unit Economic Schedules
• C. Appendix C: Funding, Cash and Balance Sheet Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

7.1 Basis of the model

▪ The model is constructed monthly over sixty months on a merchant-cohort basis. Each monthly cohort is tracked separately, decays at the segment churn rate, and ramps to full transaction volume over four months at 35%, 60%, 80% and 100% of mature volume.

▪ Revenue is calculated from maturity-weighted merchant months rather than from period-end merchant counts, which avoids crediting a full month of revenue to a merchant that went live on the twenty-eighth.

▪ Same-store volume growth of 3% a year is applied, below expected nominal gross domestic product growth.

▪ No price increases are assumed on any line. Card pricing declines from 2.45% to 2.26% and account-to-account pricing is held flat in nominal terms, which is a real-terms decline.

▪ Engineering is expensed as incurred rather than capitalised, which depresses reported EBITDA during the build phase.

▪ Corporate tax is 27% with assessed losses carried forward, subject to the section 20 limitation capping the set-off at the higher of R1 million or 80% of taxable income.

▪ Merchant settlement funds are excluded from all cash figures and are matched by an equal and offsetting settlement liability.

7.2 Revenue build

7.3 From net revenue to EBITDA

Cost to serve is the largest single deduction from net revenue in every year of the plan. It comprises merchant support, risk and anti-money-laundering monitoring, per-merchant sponsor charges and hosting, modelled at R850 per practice merchant and R2 400 per trade merchant per month in FY2027, declining by a third across the horizon as onboarding and monitoring are automated. That decline is an assumption about engineering execution, not a contractual saving.

Losses of R11.4m, R15.9m, R17.3m and R7.7m accumulate to R52.3m of assessed loss before the business turns. Under the section 20 limitation the FY2031 profit before tax of R17.5m is sheltered to 80 per cent, leaving R3.5m taxable and a charge of R0.9m, with R38.3m of assessed loss still carried forward at the end of the projection.

7.4 Cost of payments and the gross-to-net bridge

7.5 Operating expenditure

Contribution margin rises from 44 per cent to 61 per cent as cost to serve automates and the book scales, but operating expenses rise from R12.8m to R96.7m over the same period. The business does not become profitable because the margin improves; it becomes profitable because contribution eventually overtakes a cost base that is largely fixed in the year it is incurred. That crossover is month 45.