Revenue is derived from the explicit clinic rollout and maturation; the EBITDA margin ramps into the sponsor’s 20–25% target band; and depreciation, interest, tax and net profit are independently derived. The distinctive feature is the rollout J-curve: a heavy, equipment-intensive fixed cost base is in place from each opening, so network EBITDA is negative in Year 1 and net profit is negative through the early rollout, turning positive as the clinics mature.
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|---|---|---|---|---|---|
|
Revenue |
162 |
454 |
859 |
1,102 |
1,215 |
|
Operating expenses |
-170 |
-418 |
-730 |
-887 |
-948 |
|
EBITDA |
-8 |
36 |
129 |
215 |
267 |
|
EBITDA margin |
-5.0% |
8.0% |
15.0% |
19.5% |
22.0% |
|
Less: depreciation |
-19 |
-38 |
-57 |
-62 |
-69 |
|
EBIT |
-27 |
-2 |
72 |
153 |
198 |
|
Less: net interest |
-5 |
-13 |
-18 |
-17 |
-12 |
|
Profit before tax |
-32 |
-15 |
54 |
135 |
186 |
|
Less: taxation (27%) |
-0 |
-0 |
-3 |
-35 |
-50 |
|
Net profit after tax |
-32 |
-15 |
51 |
100 |
136 |
|
Net margin |
-19.9% |
-3.4% |
5.9% |
9.1% |
11.2% |
NoteThe equipment-heavy depreciation is significant — and appropriately modelled
Eye clinics are equipment-intensive: diagnostic, laser and theatre systems make up the bulk of the R46 million of depreciable capital per clinic, and much of it depreciates over four to eight years. Network depreciation therefore builds quickly to about R69 million a year as the nine clinics commission, a real charge that the model recognises in full from each clinic’s opening, rather than deferring. This is why EBIT and net profit lag EBITDA materially in the early years, and why an equipment-refresh capital allowance is built into the later years.
The rollout ramp underlies the trajectory
Revenue is built bottom-up from the clinic rollout: three clinics open in Year 1, three in Year 2 and three in Year 3, and each ramps over about three years toward the ~R135 million mature flagship run-rate. The result is revenue of R162 million in Year 1 building to R1,215 million by Year 5, exceeding the sponsor’s R1.2 billion target, and an EBITDA margin that climbs from –5% to 22% as the network matures and fixed costs are spread over rising volume.
Clinical volumes underpin the revenue
The revenue build rests on clinical throughput ramping toward the Year-5 targets of ~180,000 consultations and ~20,000 surgeries a year. These volumes are demanding, the surgical target in particular implies high throughput per specialist, and they are the operational assumptions the financial model most depends on. The volume ramp is set out below and underpins every revenue line.
