The Brand Group is a private company registered in South Africa that focuses on purchasing and managing established brands and franchises. It aims to acquire businesses with high cash flow and scalable structures to reinvest profits aggressively. Its goals are to obtain related properties and build a portfolio of franchises. Shareholding is available to the public and the company projects strong capital growth over 10 years through reinvestment and acquiring businesses that can repay capital within 3 years.

1.
THE
BRAND
GROUP
www.tbgholdings.co.za
nic@tbgholdings.co.za
078
920
3919
michael@tbgholdings.co.za
082
454
2448

2.
Introduction
What
is
“The
Brand
Group”?
-­‐ TBG
Holdings
(PTY)
Ltd
known
to
us
as
"The
Brand
Group"
is
a
private
company
registered
in
South
Africa.
-­‐ Strong
focus
on
purchasing
and
successfully
managing
existing,
profitable
and
well-­‐established
brands
and
franchises.
-­‐ Secondary
aim
of
purchasing
the
property
the
business
resides
within.
Core
Focus
Areas
1. Cash
Flow
-­‐
Main
focus
to
establish
businesses
with
high
cash
flow
from
a
sales
point
of
view.
2. Structure
-­‐
Scalable
business
model
so
as
to
limit
overheads
and
increase
profit
in
order
to
aggressively
re-­‐
invest.
3. People
-­‐
Ensuring
top
quality
staff
in
key
areas
and
hands
on
4
month
program
with
each
acquisition
to
train
employees.
4. Franchises
-­‐
After
intense
market
research
it
was
noted
that
this
was
stable
and
a
large
asset
base
could
be
built
up.
5. Property
-­‐
Where
possible
“The
Brand
Group”
seeks
to
obtain
the
premises
of
the
entity
to
further
increase
the
asset
base.
Secondary
Objective
Areas
-­‐ We
are
wise
to
the
fact
that
in
an
ever
expanding
business
such
as
this
there
will
exist
many
opportunities
which
may
not
be
in
the
sole
mandate
of
"The
Brand
Group",
we
encourage
our
shareholders
to
bring
these
opportunities
to
our
attention
as
to
ever
diversify
the
exposure
of
"The
Brand
Group".
We
try
to
cultivate
a
culture
of
innovation
and
entrepreneurial
spirit
within
the
framework
of
our
shareholders.
We
aim
to
have
skilled
and
professional
shareholders
with
strong
vested
interested
in
the
welfare
of
"The
Brand
Group".
Structure
of
Ownership
-­‐ Shareholding
is
available
to
the
public,
we
reserve
the
right
to
pre-­‐approve
any
potential
shareholder
as
we
see
to
create
a
company
with
strong
entrepreneurial
skills
and
innovative
culture.
With
this
being
said
we
want
diverse,
driven
and
skilled
shareholders
who
through
their
vested
interests
in
the
business
contribute
more
than
just
money
but
their
skill
as
well.

3.
-­‐ We
have
a
10
year
plan.
In
these
10
years
our
objective
is
too
aggressively
re-­‐invest
all
profits
and
shareholders
contributions
to
ensure
maximum
capital
growth.
Our
aim
is
not
to
have
to
make
use
of
financing
facilities
and
we
acquire
new
business
as
cash
surplus
allows.
In
this
way
minimising
our
exposure
to
finance
costs.
-­‐ The
company
has
100
000
authorised
ordinary
shares,
40%
of
the
entity
will
remain
in
the
hands
of
the
original
shareholders.
Therefore
the
remaining
balance
of
60
000
shares
are
left
and
available
for
purchase.
These
shares
will
be
allocated
monthly
over
a
period
of
10
years.
-­‐ All
shareholding
consist
of
ordinary
shares
with
the
applicable
voting
rights
attached
there
to.
Each
share
will
be
allocated
at
a
price
of
R
1000.00,
each
month
500
shares
will
be
allocated
to
existing
shareholders
for
the
fee
of
R1000,
this
is
a
positive
cash
flow
into
the
entity
of
R
500
000.00
and
will
remain
constant
throughout
the
10
year
period.
Therefore
if
contributions
are
made
consistently
over
the
10
year
period
based
on
purchasing
of
1
share
then
one
would
have
a
total
of
120
shares
at
the
end
of
the
time
frame.
Bearing
in
mind
that
for
the
first
10
years
"The
Brand
Group"
has
an
aggressive
re-­‐investment
strategy
and
no
dividends
will
be
allocated
in
this
time
frame.
Capital
Growth
Projections
We
work
under
the
following
assumptions
going
forward:
-­‐ "The
Brand
Group"
does
strong
research
into
any
new
business
that
it
intends
to
acquire
and
in
this
way
seeks
to
purchase
business'
which
can
meet
the
initial
capital
outlay
within
3
years.
To
be
slightly
more
conservative
a
return
on
equity
of
30%
is
used
for
the
purpose
of
this
calculation.
-­‐ Currently
"The
Brand
Group"
has
two
Vida
E
franchises.
Camps
Bay
and
Clock
Tower
in
the
V&A
Waterfront,
both
these
stores
have
shown
strong
promise
and
current
net
profit
would
see
capital
"repaid"
in
the
3
year
time
period.
These
franchises
are
also
what
serve
as
the
current
capital
base
of
R
2
400
000.
-­‐ "The
Brand
Group"
seeks
to
acquire
new
capital
assets
with
existing
cash
reserves
only
and
in
doing
this
limit
exposure
to
finance
costs.

4.
-­‐ "The
Brand
Group"
will
focus
on
the
acquisitions
of
business
in
the
following
price
categories
over
the
timeline
of
the
entity:
o Capital
Expenditure
on
new
entities
will
be
as
follows
1. In
Year
1
and
Year
2
entities
to
the
value
of
R1,
5
million
will
be
purchased.
2. In
Year
3
and
Year
4
entities
to
the
value
of
R2,
0
million
will
be
purchased.
3. In
Year
5
and
Year
6
entities
to
the
value
of
R3,
0
million
will
be
purchased.
4. In
Year
7
and
Year
8
entities
to
the
value
of
R4,
0
million
will
be
purchased.
5. In
Year
9
and
Year
10
entities
to
the
value
of
R5,
0
million
will
be
purchased.
-­‐ All
values
used
in
the
calculation
are
in
present
value
terms,
capital
acquisitions
expressed
in
today’s
terms
for
the
use
of
the
forecast
and
shareholder
contributions
have
been
discounted
by
6%
over
the
term
to
present
value.
The
below
is
a
summarised
version
of
the
forecasts
for
the
brand
group
over
the
10
period.
o The
10
year
period
will
commence
on
the
1st
of
January
2016
and
cease
on
the
31
December
2025.
o After
the
10
year
period
the
entity
will
begin
to
distribute
profits.
Guidelines
on
table.
1. Shareholder
Contributions
in
PV
-­‐
This
is
the
yearly
total
of
expected
contributions
from
members
which
has
been
discounted
by
6%
over
the
10
year
term
2. Total
Return
on
Equity
-­‐
This
is
factor
of
the
return
on
the
capital
purchased,
"The
Brand
Group"
looks
to
recoup
capital
in
3
years
but
for
the
calculation
30%
ROI
has
been
used.
3. Total
Cash
into
the
Entity
-­‐
This
is
the
total
of
the
cash
in
present
value
terms
into
the
business,
a
combination
of
shareholder
contributions
and
returns
on
capital
employed.
4. Total
Capital
Expenditure
-­‐
This
is
the
forecasted
spend
on
the
acquisition
of
new
business
in
present
value
terms.
Each
2
year
period
acquisition
strategy
will
target
higher
valued
entities.
5. Cash
Surplus
at
Year
End
-­‐
All
Acquisitions
will
be
made
from
cash
surpluses,
this
will
be
on
a
month
to
month
basis
as
the
cash
surplus
exceeds
the
cost
of
the
new
business.
6. Capital
at
Start
of
the
Year
-­‐
This
is
the
combination
of
all
assets
acquired
to
date
at
the
start
of
each
year,
return
on
equity
is
based
on
monthly
capital
values.
7. Total
Capital
at
Year
end
-­‐
Combination
of
all
asset
at
the
end
of
the
specific
period.
Carried
over
to
calculate
the
new
return
on
equity
for
the
following
period.

5. R-­‐
R50,000,000.00
R100,000,000.00
R150,000,000.00
R200,000,000.00
R250,000,000.00
R300,000,000.00
R350,000,000.00
R400,000,000.00
YEAR
1
-­‐
2016
YEAR
2
-­‐
2017
YEAR
3
-­‐
2018
YEAR
4
-­‐
2019
YEAR
5
-­‐
2020
YEAR
6
-­‐
2021
YEAR
7
-­‐
2022
YEAR
8
-­‐
2023
YEAR
9
-­‐
2024
YEAR
10
-­‐
2025
Total Capital At Year End
Period
1.
Shareholder
Contributions
in
PV
2.
Total
Return
on
Equity
3.
Total
Cash
into
the
Entity
4.
Total
Capital
Expenditure
5.
Cash
Surplus
at
Year
End
6.
Capital
at
Start
of
Year
7.
Total
Capital
At
Year
End
Year
1
-­‐
2016
R
6,000,000.00
R
1,507,500.00
R
7,507,500.00
R
7,500,000.00
R
7,500.00
R
2,400,000.00
R
9,900,000.00
Year
2
-­‐
2017
R
5,660,377.36
R
3,982,500.00
R
9,642,877.36
R
9,000,000.00
R
650,377.36
R
9,900,000.00
R
18,900,000.00
Year
3
-­‐
2018
R
5,339,978.64
R
7,170,000.00
R
12,509,978.64
R
12,000,000.00
R
1,160,356.00
R
18,900,000.00
R
30,900,000.00
Year
4
-­‐
2019
R
5,037,715.70
R
11,520,000.00
R
16,557,715.70
R
16,000,000.00
R
1,718,071.70
R
30,900,000.00
R
46,900,000.00
Year
5
-­‐
2020
R
4,752,561.98
R
16,995,000.00
R
21,747,561.98
R
21,000,000.00
R
2,465,633.68
R
46,900,000.00
R
67,900,000.00
Year
6
-­‐
2021
R
4,483,549.04
R
24,345,000.00
R
28,828,549.04
R
30,000,000.00
R
1,294,182.71
R
67,900,000.00
R
97,900,000.00
Year
7
-­‐
2022
R
4,229,763.24
R
34,270,000.00
R
38,499,763.24
R
36,000,000.00
R
3,793,945.96
R
97,900,000.00
R
133,900,000.00
Year
8
-­‐
2023
R
3,990,342.68
R
47,170,000.00
R
51,160,342.68
R
52,000,000.00
R
2,954,288.64
R
133,900,000.00
R
185,900,000.00
Year
9
-­‐
2024
R
3,764,474.23
R
64,645,000.00
R
68,409,474.23
R
70,000,000.00
R
1,363,762.87
R
185,900,000.00
R
255,900,000.00
Year
10
-­‐
2025
R
3,551,390.78
R
88,270,000.00
R
91,821,390.78
R
90,000,000.00
R
3,185,153.65
R
255,900,000.00
R
345,900,000.00
Year
11
-­‐
2026
R
-­‐
R
103,770,000.00
R
103,770,000.00
R
-­‐
R
106,955,153.65
R
345,900,000.00
R
345,900,000.00
The
above
will
further
be
summarised
into
the
two
crucial
factors
and
graphed.
We
consider
the
growth
of
the
capital
base
over
time
as
well
as
the
return
on
equity.

6. R-­‐
R20,000,000.00
R40,000,000.00
R60,000,000.00
R80,000,000.00
R100,000,000.00
R120,000,000.00
YEAR
1
-­‐
2016
YEAR
2
-­‐
2017
YEAR
3
-­‐
2018
YEAR
4
-­‐
2019
YEAR
5
-­‐
2020
YEAR
6
-­‐
2021
YEAR
7
-­‐
2022
YEAR
8
-­‐
2023
YEAR
9
-­‐
2024
YEAR
10
-­‐
2025
YEAR
11
-­‐
2026
Total Return on Equity
Analysis
of
Graphs
Total
Authorised
Share
Capital
Total
Shares
Reserved
for
Founders
Remaining
Shares
for
Contributing
Members
100,000.00
40,000.00
60,000.00
Total
Capital
Value
after
10
year
period
Total
Capital
Value
of
Company
Total
Shares
Reserved
for
Founders
Remaining
Shares
for
Contributing
Members
R345,900,000.00
138,360,000.00
207,540,000.00
To
unitise
the
values
the
following
must
be
considered.
120
Shares
which
would
be
the
total
of
shares
acquired
should
a
member
contribute
for
the
total
10
period.
This
is
a
present
Value
Calculation:
Total
Value
of
the
Entity
R
345,900,000.00
Number
of
Issued
Shares
100,000.00
PV
of
one
Share
3,459.00
10
Year
Contribution
120
Total
Value
of
120
Shares
415,080.00

7.
Present
Value
worth
of
share
contribution
over
10
years
Present
Value
of
R
120
000
R90,073.45
Rate
of
Return
22%
Essentially
what
this
means
is
that
in
real
terms
your
money
has
grown
on
average
by
22%
per
annum
excluding
the
future
dividend
yield
considerations.
All
contributions
have
been
discounted
by
6%
as
and
when
the
payment
would
occur
to
accurately
reflect
what
the
value
of
R
120
000
is
in
today’s
terms
when
paid
over
the
10
year
cycle.
Consider
for
a
moment
the
return
on
Equity
in
Year
11
At
the
end
of
Year
11
there
will
be
a
cash
surplus
of
R
106
955
153
available
for
distribution
amongst
the
shareholders.
This
equates
to
the
following:
Total
Cash
Surplus
R106,955,153.65
Total
Share
Issue
100,000.00
Average
per
Share
R1,069.55
At
holding
of
120
Shares
R128,346.18
Therefore
in
year
11
a
total
dividend
of
R
128
346
will
be
paid
out
at
present
value.
When
considering
this
together
with
the
fact
that
the
present
value
of
one
share
is
R90
073
the
following
is
true:
Therefore
in
year
11
dividends
received
are
in
excess
of
100%
of
the
actual
equity
in
present
value.
Considering
this
together
with
the
fact
that
there
is
average
growth
of
22%
of
the
actual
capital
in
real
terms
the
combined
effect
show
significant
returns.
The
final
Consideration
is
the
fact
that
most
JSE
listed
companies
only
show
a
dividend
yield
of
between
3%
and
6%.
If
we
consider
this
type
of
market
value
then
we
need
to
reassess
the
value
of
the
capital
as
assumptions
have
not
included
the
growth
of
the
going
concern
and
the
value
in
the
income
potential
of
the
entity.
Let
assume
that
the
dividend
yield
in
the
market
is
6%
which
is
very
generous
and
calculate
the
actual
market
cap
as
it
should
be.
Year
11
Dividend
Pay
out
R128,346.18
Less
15%
dividend
tax
19,251.93
Net
Pay
out
109,094.26
Present
Value
of
Share
R
90,073.45
Rate
of
Return
121%

8. Bearing
in
mind
that
the
lower
the
dividend
yield
the
higher
the
perceived
value
of
the
stock.
Total
Dividend
Yield
R103,770,000.00
Apply
Dividend
Yield
6%
Total
Assessed
Market
Cap
R1,729,500,00.00
Actual
Capital
Expenditure
R345,900,00.00
Growth
through
going
concern
500%
Therefore
if
we
take
this
into
account
on
a
single
share
the
future
value
of
120
shares
will
be
as
follows:
Total
Market
Cap
R1,729,500,000.00
*New
Total
Shares
issued
100,000.00
Average
per
Share
17,295.00
Total
of
120
Shares
2,075,400.00
Present
Value
of
120
Shares
R
90,073.45
Actual
Rate
of
Return
on
Capital
44%
When
we
consider
the
above
it
is
therefore
clear
that
actual
growth
on
the
capital
investment
is
44%
year
on
year
growth
which
is
compounded
annually.
In
essence
in
present
value
terms
contributions
in
today’s
money
of:
R
90,073.45
Will
be
equal
to
the
following
amount
in
present
value
(real
terms)
in
10
years
from
now
R2,075,400.00
These
returns
are
excluding
the
inflation
factor
and
as
such
should
be
seen
as
44%
growth
compounded
annual
with
an
additional
6%
growth
to
cover
for
inflation
as
we
are
using
real
Present
Values