Tarlton Beetroot Business Plan — Break-even Analysis
The tonnage and yield needed to cover the cost base, and when the operation crosses break-even.
Section 28 of 37
Break-even Analysis
Jump to section
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. Investment Thesis
- 3. Company, Structure and Stage of Development
- 4. Customer Problem, Value Proposition and Monetisation
- 5. Products, Portfolio and Unit Economics
- 6. Industry Analysis
- 7. Market Analysis and Sizing
- 8. Customer and Channel Analysis
- 9. Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model: Agronomy and Production
- 13. Operating Model: Post-Harvest, Packhouse and Logistics
- 14. Water, Energy and Land: The Three Binding Constraints
- 15. Management and Organisation
- 16. Strategic Plan
- 17. SWOT Analysis
- 18. Risk Analysis and Register
- 19. ESG and Development Impact
- 20. Implementation Roadmap
- 21. Financial Assumptions
- 22. Projected Income Statement
- 23. Projected Balance Sheet
- 24. Projected Cash Flow
- 25. Capital Expenditure and Working Capital
- 26. Funding Requirement and Structure
- 27. Break-even Analysis
- 28. Debt Serviceability
- 29. Investment Returns and Valuation
- 30. Sensitivity and Scenario Analysis
- 31. Phase 3: Processing Optionality
- 32. Key Performance Indicators and Management Dashboard
- 33. Conclusion and Investment Recommendation
- A. Appendix A: Monthly Projections, Year 1
- B. Appendix B: Detailed Assumptions Register
- C. Appendix C: Glossary
Comfortable headroom on price and yield by Year 5 — and none at all in Years 1 to 3, when no achievable price or yield produces a profit.
Table 46 Break-even measures
|
Measure |
Year 4 |
Year 5 |
|---|---|---|
|
Revenue |
18 214 |
25 801 |
|
Variable cost |
9 711 |
13 562 |
|
Fixed cost |
5 696 |
6 447 |
|
Contribution margin ratio |
46.7% |
47.4% |
|
Break-even revenue |
12 202 |
13 590 |
|
Margin of safety |
33.0% |
47.3% |
Table 47 Operating break-even thresholds, Year 5
|
Variable |
Break-even |
Base case |
Headroom |
|---|---|---|---|
|
Net realisation, R per kilogram |
R6.33 |
R8.76 |
28% |
|
Achieved yield, tonnes per hectare-cycle |
30.6 |
54.0 |
43% |
|
First EBITDA-positive month |
Month 36 |
— |
— |
|
First profitable year |
Year 5 |
— |
— |
The Year 5 headroom is genuine: the operation would still cover its costs at R6.33 per kilogram against a base assumption of R8.76, and at 30.6 tonnes per hectare-cycle against an assumption of 54. Both thresholds sit below the historical range of South African market prices and below documented commercial yields. That is a meaningful cushion at steady state.
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