Sectors / Category

Annual turnover

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  • Mandate: 31280
  • Added: 25 Jul 2017
  • 1547

Unique Industrial Engineering

KwaZulu-Natal, Durban
1547
Mandate 31280
Added 25 Jul 2017
R 9,357,000* ZAR
Stock: R 357,000
Assets: R 5,940,000
R 380,999 ZAR
Ian Reich
(PRINCIPAL)
Aldes Supreme
KwaZulu-Natal
KwaZulu-Natal
Summary

This unique Industrial Engineering business designs and supplies a variety of large Industrial companies with specific heat exchange units. It is the preferred supplier to a large group that has over 98 branches throughout RSA. Regular demand for refurbishment of units from a loyal and well established client base.

Unique Industrial Engineering
SELLING PRICE
R 9,357,000* ZAR
Stock: R357,000
Assets: R5,940,000
R 380,999 ZAR
Summary

This unique Industrial Engineering business designs and supplies a variety of large Industrial companies with specific heat exchange units. It is the preferred supplier to a large group that has over 98 branches throughout RSA. Regular demand for refurbishment of units from a loyal and well established client base.

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Fully describe the business's activities?
The business is involved in manufacturing and refurbishing of industrial heat exchanges. It has recently formed a joint venture with a well established large engineering corporate that has 98 branches throughout RSA. This venture has already resulted in an escalating growth in branch referral business to the Durban based workshop/factory. The company has recently been contracted by an international, German based corporate, to develop a new product on a national footprint for RSA This new intervention will escalate the business growth by a substantial amount and will be initiated in November 2017

How long has the business been established?
8 Years.

How long has the owner had the business?
The owner started the business and has had it since inception. 8 years

What steps are in place to solve 'load shedding' problems?
Not Applicable

What is the average KW usage?
Not Applicable

How does the business operate on a daily basis?
The workshop is sent units for refurbishment, or, it receives orders to manufacture new larger capacity units for an ever increasing client base.

How are the clients attracted to the business?
Referrals from the national network of branches, of the large corporate, is escalating monthly. There is also an existing client base that require repeat work on a regular basis. A sales rep travels and sources new business for which there is a monatory incentive

What Advertising/Marketing is carried out?
There is a website that attracts a few new enquiries, but the main advertising is done by the large corporate branch network. This business is the preferred supplier of the industrial units that are either manufactured or refurbished for the branches.

Does the business have any contract work?
Yes there is a contract in place with the large Industrial Corporate, for which this company is the preferred supplier.

What competition exists?
No real manufacturers of the product range although there are a few minor refurbishing engineering workshops that attempt to repair and to copy the IP of this company.

What are the seasonal trends?
No real seasonal trends as there is steady work throughout the year, growing month by month.

Is the business VAT Registered?
Yes

What VAT documentation is on file?
The company secretary has all the VAT documentation on the business which is kept at the factory site.

Are there up-to-date Management Accounts available?
Yes

What Balance Sheet and Income Statements are available?
3 years AFS 's are available as well as the latest monthly management trial balances. There is an updated Asset list with realistic replacements values far all the machinery/vehicles.

What percentage of the business is cash/credit?
All work is invoiced with a 30 day payment term. All payments are made via EFT. The small cash payments are used for staff benefuts such as meals and tea/coffee breaks.

What is the age analysis of the debtors book?
Nil The business has an excellent record of collection of debt and all new clients are carefully screened before work is undertaken.

How could the profitability of the business be improved?
There is a plan to incorporate all the branches into a refurbishment program as currently the factory is only dealing with 10 out of 98 branches.

Is Seller finance available and for what amount?
No

What is the total staff complement?
There are 8 staff members plus the owner and his wife.

Give a breakdown of staff/ functions/ length of service?
Staff are all skilled or semi- skilled and are tasked with daily activities to ensure that the escalating work load is of a high standard and completed and checked. High standards are set and achieved an all tasks. The majority of the staff have been with the owner since inception.

Do any receive special perks or incentives?
The sales rep has a commission incentive and all the staff receive annual bonusses.

Are they on contract?
Staff conditions of employment are in the process of being up dated.

Do any have management potential?
There is one works manager and one operational foreman, plus the owner and his wife who manage the flow of the business.

How involved is the Owner in running the business?
The owner is very hands on in the controlling of the daily work on the machines. He also does all the design work and drawings for new adeptations to suit the cleint requirements. The owner is prepared to sell 50% of the business (preferably to a BEE potential buyer) at the beginning of 2018 and once the new product range is in place and is productive, the balance of the equity in the business can be sold in tranches going forwrad.

When does the current lease end?
Owner owns the building but will draw up a lease for the new owner based on the "going rates" of the area. The sale of the property is also an option for a potential buyer to consider.

Is there an option of renewal & what period?
See above on a ne rental agreement

What is the annual escalation %?
10%

What are the trading hours?
0700 to 1630 hrs Monday to Thursday Fridays the business closes at 1400 hrs.

What is the square meters of the business?
900 square meters

Who is the Owner/Landlord?
See above

Is a copy of the lease available?
Not Applicable

Do you require a licence?
No

What lease deposit and/or other surety is required?
See above

What are the main assets of the business?
Various machines that are utilized in the daily work load of the business.

Are any items not included in the sale?
No

What is their overall condition?
All assets are in good working order and a new machine has just been commissioned in the workshop, in order to cope with the escalating volume of work.

Do any require repairing?
No

How have they been valued ?
At replacement value

Will Seller settle or Buyer to take over?
All assets are free standing

Are they presently insured?
Yes

Strengths?
Well known for high quality work and the expansion program with the large engineering "partner" is well structured and has massive scope in the next 5 years to grow even further. This business is extremely profitable and is strategically placed for exceptional growth

Weaknesses?
The business is in a growth phase and as they are well known for high quality work there are no real threats perceived in the way forward.

Opportunities?
The relationship with a well known large engineering corporate is yielding excellent growth with a massive opportunity to expand even further. The international consortium who have contracted this company to develop the RSA market, will enhance the profitability of the business by a great deal.

Threats?
No real threats as the large engineering "partner" has a very good marketing strategy and is developing branches in the SADAC regions as well as new areas in RSA

What is the reason for the sale?
The owner wishes to emigrate as all his children have already left. He is in demand to start a similar enterprise in Australia/New Zealand.

Why is this a good business?
Massive growth potential is imminent. There is an international consortium who have contracted this company to develop a RSA market for a new innovation that is internationally proving to be very successful.

What is the price plus stock and the net profit?
R 9,000,000 for 50% plus stock of R350000 with a net profit of close to R4,500,000 per annum. There is an option to purchase the full 100% of the business at R17,500,000 plus stock. A potential buyer can consider both options

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FRANCHISE DETAILS

Aldes Supreme

2 members
15 active mandates
KwaZulu-Natal
19 Village Brittany, Le Domaine Estate
3626

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