Thaba Goats Business Plan — Returns and Net Asset Value
A Year 5 net asset value of R1.40m, of which R902,000 is breeding herd, and what the founders earn across the horizon.
Returns and Net Asset Value
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- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. The South African Goat Market
- 3. Why the Informal Market Matters More Than the Abattoir
- 4. Seasonality
- 5. SWOT and Competitive Position
- 6. The Five-Stage Roadmap and Gates
- 7. The Funding Ladder
- 8. Herd and Reproduction
- 9. Kid Mortality: The Industry's Named Constraint
- 10. Grazing, Land and Water
- 11. Animal Health
- 12. Route to Market
- 13. People and Operations
- 14. Regulation and Compliance
- 15. Unit Economics
- 16. Capital Expenditure
- 17. Financial Projections
- 18. Break-Even and Sensitivity
- 19. Risk Management
- 20. Implementation Timeline
- 21. Returns and Net Asset Value
- 22. Key Performance Indicators
- 23. Key Assumptions
- 24. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Stage Capital Schedules
- C. Appendix C: Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Funding Application Checklist
- F. Appendix F: Glossary
- 21.1 What the enterprise is worth
- 21.2 How to read the return
21.1 What the enterprise is worth
A livestock enterprise is valued on its assets rather than on an earnings multiple, because the herd is both the productive capacity and the store of value. Net asset value is therefore the primary return measure and reported earnings the secondary one.
|
Measure |
Value |
Basis |
|---|---|---|
|
Year 5 total assets |
R3.70m |
Infrastructure R1 760k, breeding herd R902k, growing stock R279k, stores and cash |
|
Year 5 debt outstanding |
R2.27m |
Five facilities, all amortising |
|
Year 5 net asset value |
R1.40m |
Against R250 000 of founder capital and R1.37m of grants |
|
Breeding herd value |
R902k |
300 does and 12 bucks; the productive capacity |
|
Return on capital deployed |
27.3% |
Year 5 EBITDA against R2.45m of cumulative capital |
|
Return on capital deployed, cash basis |
14.9% |
Year 5 cash EBITDA on the same base |
|
Year 5 debt service cover |
1.26x |
Cash EBITDA over interest and scheduled principal |
Net asset value reaches R1.40 million by Year 5. Of that, R860 000 is the breeding herd and R1.29 million the infrastructure, offset by R2.27 million of debt. The founder contributed R250 000 and R1.37 million came as non-repayable grants, so the equity built is substantially a function of the grant architecture as well as of the farming.
21.2 How to read the return
|
Basis |
Value at Year 5 |
Comment |
|---|---|---|
|
Net asset value |
R1.40m |
The floor; what the assets are worth if the earnings are disbelieved |
|
Breeding herd alone |
R902k |
Realisable within a season through traders; the most liquid asset on the farm |
|
Return on capital deployed |
27.3% |
Includes non-cash herd growth |
|
Return on capital deployed, cash basis |
14.9% |
The number a lender should use |
|
Owner remuneration drawn, Years 1 to 5 |
R690 000 |
Paid before EBITDA is struck; part of the founder’s return |
|
Assessed loss carried forward |
R219k |
Shelters roughly the first R219 000 of Year 6 profit |