Summary

This is a very well established general engineering business, situated in Windhoek. It is ISO9000 certified, and boasts a skilled and experienced workforce. What's more, the owner expects turnover to increase by as much as 100% over the next year or two. Price: N$12 million, profit: N$308 000/month on average.

1. History Background

Fully describe the business's activities

This is a general engineering business. It is the only hard chrome plant in Namibia. The main activities of the business are: Precision engineering & milling, hard chrome & grinding, hydraulic cylinder repairs & manufacturing, submerged arc welding, crankshaft grinding, and portable lineboring. The position of leadership in the industry is underlined by the fact that this company is ISO9001:2000 Quality Management System certified for more than a decade.

How long has the owner had the business

The current owner has had this business since 1979.

2. Present Market

How are the clients attracted to the business

The business is very established, so all the people in the industry know about it. Other engineering companies depend on it for certain jobs, even if they compete on others.

What Advertising/Marketing is carried out

The only advertising that is done is geared at farmers.

What competition exists

Some competition exists, but the most competitors are also customers.

What are the seasonal trends

This turnover of this business is very constant.

3. Financial

Is the business VAT Registered

Yes, business is vat registered.

Are there up-to-date Management Accounts available

Management accounts for the last financial year are available.

What Balance Sheet and Income Statements are available

Financial Statement for the previous three years are available.

What percentage of of the business is cash/credit

Most sales are on 30 day account.

What is the payback period

39 months

What is the ROI

31%

4. Staffing

What is the total staff complement

The business employs 23 staff.

Give a breakdown of staff/functions/length of service

Most of the staff are technical, and some admin. The key staff member is the foreman who has been with the business for 21 years. He handles most of the customers, and supervises the other workers.

How involved is the Owner in running the business

The owner is quite involved, but has tried to withdraw more and more over the course of the last year or so. He still spends much of his time in the business, but is gone for periods to dedicate himself more to his farming activities.

5. Premises

What is the square meterage of the business

The floor space in the business is about 1173sqm. The premises consist of the main workshop, offices, ablution facilities, and storage areas

7. S.W.O.T. Analysis

Opportunities

The owner is sure that turnover can be doubled in six months due to competitors that have gone out of business and new the mines being built in the country.

Strengths

The business has a strong competitive advantage, and is in a dominant position in the industry.

Threats

None perceived

Weaknesses

None perceived

8. Reason For Sale

What is the reason for the sale

The owner wishes to gradually go into retirement and devote more time to farming.

9. Conclusion

What is the price plus stock and the net profit

The price of the business is N$12 million, and monthly profit N$308 000