Summary

Business in existence for 7 years plus. Large corporate client base. Excellent name in the industry. Asset value is R9,8m which includes a fixed property valued at R5,5m.

1. History Background

Fully describe the business's activities?

The business design; manufacture; install and maintain a wide range of signage. They operate in Gauteng, Free State, Limpopo, Polokwane, Mpumalanga, Coastal Areas, Namibia and Mozambique.

How long has the business been established?

The owner started the business 7 years ago.

2. Present Market

What Advertising/Marketing is carried out?

The business has a website and they have sales representatives. They have a lot of return business which they attribute to their high standard of manufacturing and installation.

Does the business have any contract work?

They often enter into contracts with clients but it is normally to perform a specific job in a specified time. With the exception of maintenance work for the bigger corporate companies, their contracts are not longterm. They are on the vendor list of a number of big corporate companies which include the likes of FNB, BP and Sasol. The business has HSSE Accreditation which is very important when dealing with the fuel companies.

What competition exists?

There are various Signage companies that competes with them, but they believe that their service level and innovative and high quality products give them the edge over the competition.

3. Financial

Is the business VAT Registered?

The business is a registered VAT vendor and will supply VAT returns and/or VAT clearance certificates to serious buyers.

What VAT documentation is on file?

VAT returns for 12 months up to end of August 2011.

Are there up-to-date Management Accounts available?

Management accounts to the End of August 2011 is available. The Seller will request his Accountant to provide up to date figures for a serious buyer or shortly after the end of the current financial year which is 28 February 2012.

What Balance Sheet and Income Statements are available?

February 2010 and 2011.

What percentage of the business is cash/credit?

80% Cash balance is on credit.

What is the age analysis of the debtors book?

30 Days maximum.

How could the profitability of the business be improved?

BEE ownership or partial ownership will have a positive influence on the growth of the business as some of the corporate companies insist on that when they put out tenders. More aggressive marketing.

4. Staffing

What is the total staff complement?

45 ranging from Administrative Staff; Sales; Procurement; Costing; Factory workers; Riggers; Graphic Designer, Project Managers.

Are they on contract?

Most of the staff are permanently employed and all appointment contracts will be available during the due diligence process.

Do any have management potential?

There are currently at least one staff member employed that has strong management potential.

How involved is the Owner in running the business?

100%

5. Premises

When does the current lease end?

Seller owns the building which forms part of the sales transaction.

What are the trading hours?

Weekdays from 7.30am to 17h pm. Every second Saturday from 8am - 14hpm.

What is the square meters of the business?

2000m².

6. Assets

Is a full asset list on file?

We have a detailed asset list on file.

Are any items not included in the sale?

All the business's assets are included in the sale except for the motor vehicle that the owner currently use as his private vehicle.(Landrover Discovery 4).

What is their overall condition?

The assets are all in an excellent and productive condition.

How have they been valued ?

Owner's valuation which corresponds with the insured value of the assets. |The property was valued by an experienced Estate Agency at R5 500 000.

7. S.W.O.T. Analysis

Strengths?

In existence for more than 7 years. Quality of work and well trained manufacturing staff.

Weaknesses?

None specifically identified other than the current economic situations which has delayed many projects.

Opportunities?

Tenders and active marketing.

Threats?

Although the business is on a level 4 B-BBEE status, some tenders from Corporates and Government Divisions are lost due to no BEE ownership. The Seller does not want to go into a partnership.

8. Reason For Sale

What is the reason for the sale?

The Seller is a very intense and involved type person. He already had some serious setbacks as far as his health is concerned and he therefore wants to scale down to a business that does not demand as much owner involvement. His personality will not allow him to leave the business for somebody else to manage.

9. Conclusion

Why is this a good business?

Well established and just the fact that the business does not have any debt, not even a bond on the property confirms the profitability of the business.

What is the price plus stock and the net profit?

The total selling price of the business is R12 525 000 which includes the factory/office building valued at R5,5m other assets of R4,8m and stock/work in progress of ±R925 000. The net profit before tax; depreciation and owner's drawings for the 12 month period ending 31 Aug. 2011 is R3 312 439.