Page 11 - demo Golden pond document

A2pay investment proposal 10

A2Pay

The business, excluding the potential of a bulk purchasing/wholesale business model, moves from a profit of
approx. R8 million for the 19 months to March 2021 to a profit of approx. R30 million for the 2023 financial year.
Prior to 2023 the costs of rolling out sites is included in expenses. System hardware to the value of R78 million
is expensed in the financial projections (i.e not capitalised). A good proportion of costs are funded out of Jobs
Fund income. It should be noted that although matched funding of approx. R100 million must be raised and
evidenced to the Jobs Fund, A2Pay retains a healthy bank balance throughout the period (R48 million as at March
2021 and R95 million as at March 2023). Detailed cash flow forecasts will be provided to interested parties.
These funds provide a nice cushion – particularly relevant when assessing investor risk.

Perhaps the biggest potential that arises from the A2Pay base of approx. 5000 sites (aside from the loan business
which is outlined below) is in the areas of retail data (see PMI below) and of bulk purchasing/wholesaling. In the
area of bulk buying / wholesaling a number of profitable business models are possible and the company is
currently undertaking a detailed feasibility study to determine which models to use in the short, medium and
long term. However, at this stage, A2Pay is aware that there is a very real value in this area of the business and
earnings of at least R15 million are expected for the 2023 year.

A2Pay Financial Highlights
2021 2022 2023

19 months Mar to Apr Mar to Apr
Trading units (at end of period):
POS units 4609 5908 5908
Commercial units 652 724 850
Trading financial hubs (cash machines) 140 300 300

R000's
Turnover:

VAS R 1 015 897 R 1 527 951 R 1 675 208

Licence fees R 12 048 R 53 023 R 67 944
Wholesale electricity R 39 120 R 43 050 R 51 660

Advertising R 1 455 R 46 877 R 56 642

Other sales R 2 337 R 82 388 R 95 050

Total sales R 1 070 857 R 1 753 289 R 1 946 504

Gross profit:
VAS R 30 846 R 49 032 R 57 569

Licence fees R 12 048 R 15 145 R 16 535

Wholesale electricity R 9 780 R 10 763 R 12 915

Advertising R 1 025 R 3 882 R 7 920

Other sales R 2 343 R 3 053 R 2 994

Total gross profit R 56 042 R 81 875 R 97 933

Job Fund Income R 93 079 R 55 000 R 8 000

Total income R 149 121 R 136 875 R 105 933

Overheads R 141 290 R 114 475 R 75 385

Net profit bef depreciation interest and tax R 7 831 R 22 400 R 30 548

Add: Bulk purchasing / wholesale potential R 15 000

Total 2023 R 45 548