Fully describe the business's activities?
This is a HVAC company that deals in commercial and industrial air conditioning installations and repairs/maintenance contracts within the commercial arena. This company services a selection of chain store contracts and has teams busy every day with these contracts in order to ensure regular monthly revenue. It focuses on developing new commercial/industrial contracts. In the past few years the company has focussed on large shopping mall developments, and similar large developments. They have business contracts to the value in excess of R70 million for 2018
How long has the business been established?
Since 2003 and was registered into a c.c in 2004
How long has the owner had the business?
How does the business operate on a daily basis?
There are 10 teams that are tasked on a daily basis to attend to the repairs/ maintenance and service agreements and contracts that are in place. The business operates mainly in the greater Durban area, but on occasion travel to other KZN towns and cities, or other Provincial areas.
How are the clients attracted to the business?
Word of mouth referrals, tenders and the web site keeps the company developing new clients throughout the year. Due to the success of completed contracts of large malls and other industrial applications this company has become the preferred suppier to many new developments.
What Advertising/Marketing is carried out?
Website is updated on a regular basis, and all company vehicles have branded signage on them.
Does the business have any contract work?
Yes there are a variety of contracts in place dealing with commercial/ industrial and retail businesses
What competition exists?
There are a few other air conditioning companies in the area, but they operate on a much smaller scale.
What are the seasonal trends?
The servicing of the numerous contracts requires consistency throughout the year, so there are no real seasonal trends
Is the business VAT Registered?
What VAT documentation is on file?
All documentation is available to serious buyers and will be made available by the broker via the accountant.
Are there up-to-date Management Accounts available?
What Balance Sheet and Income Statements are available?
February 2017 AFS's and management accounts through to September 2017
What percentage of the business is cash/credit?
All payments are made via EFT or settled by inter bank transfers.
What is the age analysis of the debtors book?
There is no bad debt and 95% of the debtors settle within the terms of payment that are structured in the contracts.
How could the profitability of the business be improved?
If a new owner wishes to develop a National "footprint" then this could be an ideal opportunity to escalate the business and its profitability.
Is Seller finance available and for what amount?
What is the payback period?
What is the ROI?
Who is the bookkeeper/Accountant?
Dianne McArthur Financial Services
What is the total staff complement?
45-65 staff members and depending on the contracts that are successfully obtained.
Give a breakdown of staff/ functions/ length of service?
There are 2 x senior managers, 2 x site managers, 2 x foremen and 20 x qualified technicians. The balance of the staff are general hands and administration staff. The owner and his wife are actively invilved in the business on a daily basis.
Do any receive special perks or incentives?
Some of the senior managers have use of the company vehicles.
Are they on contract?
Yes all staff have employment contracts
Do any have management potential?
See above.There is an existing management structure in place already.
How involved is the Owner in running the business?
The owner is very hands on in the business and visits the teams on site on a regular basis.
When does the current lease end?
The owner owns the workshop, administration offices and the warehouse facility. A nominal rent is shown in the Financial breakdown of the busines, based on market related prices.
Is there an option of renewal & what period?
What is the annual escalation %?
What are the trading hours?
0700-1700 hrs 5 day week.
What is the square meters of the business?
There are two warehouses/workshops. 700 and 300 square meters.
Who is the Owner/Landlord?
The owner owns all the businesses buildings, which are all operational
Is a copy of the lease available?
To be drawn up with the new owner
Do you require a licence?
What lease deposit and/or other surety is required?
The owner of the business owns the buildings and will draw up a lease for the new owner at market related rates (50-55 per square meter)
What are the main assets of the business?
Stock that is to be utilized in the contracts that have been secured for the forthcoming year, motor vehicles, shelving and racking and normal operational small tools utilized by the repairs and maintenance teams. The buildings are not for sale.
Are any items not included in the sale?
The owner's and his wife's vehicle are not for sale and have been removed from the asset list. The buildings are not for sale
What is their overall condition?
Excellent condition and well looked after. New "bakkies" were purchased this year.
Do any require repairing?
How have they been valued ?
The assets are valued by the Insurance company and this is reviewed every 6 months
Which assets are on lease/HP and with whom?
The new vehicles are on finance plans and are owned by the company.
What are their settlement amounts?
Book values will be shown to the serious buyers at due diligence stage. All assets will be free standing at the time of purchase
Will Seller settle or Buyer to take over?
The owner will have settled any agreements on vehicles and assets that are on lease.
Are copies of agreements available?
The owner has all documentation and these will be made available to serious buyers at due diligence stage.
Are they presently insured?
Is a full asset list on file?
Well trained and loyal staff are supported by a strong management structure that keeps the client base satisfied with the work carried out. The staff compliment has escalated over the past couple of years as the contracts awarded to the company have required extra staff appointments.
There is no real weakness perceived as the company as it is very successful and well managed.
Set up a "tender desk" in the administration center to handle all tender opportunities that are advertised.
The company is a preferred supplier to a variety of commercial/ industrial companies and a BEE structure would escalate the new business, and the continuation of the current contracts that are in place.
What is the reason for the sale?
The owner is keen to travel with his family but will consider an equity purchase of 40-50% to a serious buyer who, will need the owner's to stay on for a period of time, for continuitypurposes.
Why is this a good business?
Well structured and well managed with excellent contracts in place for servicing existing clients and installing large newly developed opportunities that have been awarded to the business. Large contracts over the past few years have escalated this business to become a very profitable business. There are large contracts in place for 2018.
What is the price plus stock and the net profit?
The business is priced at R40,000,000 with a stock holding of R2 million The Net Profit is in excess of R15 million per annum.
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