How long has the business been established?
The business is essentially a "paper converter" where printing and other added value activities is carried out with acquired paper. It also has some applicator hardware which is marketed with the products to customers. It has been operating from its current premises for the past 30 years.
How long has the owner had the business?
This business was established 40 years ago by the current owner.
How does the business operate on a daily basis?
The business operate on a daily basis by receiving orders from existing or new customers. The orders been either printed from existing tablets or new design have to be created to the customers requirements. The business operate in the retail, packaging, food chemical and several smaller industries.
How are the clients attracted to the business?
Clients are attracted to the business by delivering of a very high quality of work. The owner and his representative stay regularly in contact with there existing and potential customers. Although the majority of customers are in the Gauteng province the business also convert and deliver product for customers in a 400 km radius from its factory on the East Rand.
What Advertising/Marketing is carried out?
The majority of business is from repeat- , ongoing and long-term loyal customers with whom the business has conducted business for decades. A full time external representative meet with existing and potential customers in order to grow the market share. The business also pro-actively contact customers on its vast database to secure orders and continuation.The business also has a web site but the relationship is predominantly person to person sales and promotion.
Does the business have any contract work?
The business does not have any contracts but has a large customer base of Â±3500 customers of which give or take, 50% is active. This leaves the rest of the customers to be part of the customer base which can become active again.
What competition exists?
There are 4 major players in Gauteng alone. The largest is estimated to be 10 times the size of the selling business. There is also one similar sized competitor and one smaller player. At this stage, the coastal areas are very much an unknown factor.
What are the seasonal trends?
The business is very cyclical with 40-45% of the annual revenue generated in the first 6 months and 55-60% during the last 6 months. During the peak months from September to December/Christmas the business often work overtime in order to meet deadlines and requirements.
Is the business VAT Registered?
The business is a VAT vendor.
What VAT documentation is on file?
All VAT documents are available to serious potential buyers
Are there up-to-date Management Accounts available?
Monthly management accounts , 1 March 2017 to 30 November 2017 are available to interested buyers.
What Balance Sheet and Income Statements are available?
Annual financial statements for financial years 2014, 2015, 2016 and 2017 financial periods are on file.
What percentage of the business is cash/credit?
The business receives a 50% deposit when the order is accepted. More than half the customers pay the balance on delivery. Larger customers pay 30 days from statement.
What is the age analysis of the debtors book?
The debtors book owed to the company varies between R 300,000 and R 500,000 and the creditors are of a similar quantum resulting in the suppliers financing the credit supplies to customers almost entirely.
How could the profitability of the business be improved?
The business has freed up a lot of capacity when it lost its largest customer in February 2016 to direct imports. The margin to this customer was so low that it made little difference to the bottom line after downscaling its workforce. The advantage is however that it has gained control over its activity, quality and service levels and it has been able to replace a lot of this business with new customers at significantly higher margins. The business is now focused on growing its market share in Gauteng and increased capacity utilisation will result in significant profit growth. The business has a R1m per month conversion capacity on a single shift and has achieved roughly R600,000 per month on average over the past 3 years. The addition of a dedicated sales representative will support getting operations to capacity.
Who is the bookkeeper/Accountant?
To be disclosed to serious buyers.
What is the total staff complement?
The current staff complement is 15.
Give a breakdown of staff/ functions/ length of service?
- one production manager/co-ordinator; - a bookkeeper; - an external sales representative - an internal sales representative/ administration - 2x machine minders - one graphic artist - a driver - a debtors/creditors clerk - 4 general workers - 1 Receptionist - 1 cleaner.
Do any receive special perks or incentives?
No special perks negotiated with any of the staff.
Are they on contract?
All staff is permanently employed.
Do any have management potential?
The production manager is capable of managing the affairs of the business for extended periods.
How involved is the Owner in running the business?
The owner is hands-on and 100% involved in the daily running of the business.
When does the current lease end?
The premises are owned by the owner and not included in the sale of the business. It is, however possible to negotiate the sale thereof to the successful buyer or it is available to rent, or the business can be relocated, whatever would work best. Moving the equipment may however not be that easy and could be costly.
Is there an option of renewal & what period?
A new rental agreement with renewal terms can be negotiated with the seller.
What is the annual escalation %?
The annual escalation will be negotiate with the seller.
What are the trading hours?
Office hours are Monday to Thursday 08:00 - 17:00 and Friday from 08:00- 14:00. The factory works overtime as and when required
What is the square meters of the business?
The square meters of the business is 640m2.
Who is the Owner/Landlord?
As previously mentioned, the seller is the Landlord.
Do you require a licence?
No licence is required for this business.
What lease deposit and/or other surety is required?
To be negotiated between buyer and seller.
What are the main assets of the business?
Several large conversion and specialised printing machines. The replacement value for similar machines is estimated at R 7,0m and "same quality" second-hand equipment around R 3,0m. Current assets are extremely robust, require the minimum repairs and maintenance and has a life expectancy of a further 30 years.
Are any items not included in the sale?
Two vehicles belonging to the business but used by the seller will not be included.
What is their overall condition?
All equipment is well maintained and in a good condition.
Do any require repairing?
None of the equipment requires repairing.
How have they been valued ?
The owner valued it at current used market value.
Which assets are on lease/HP and with whom?
The delivery vehicle.
What are their settlement amounts?
The current settlement amount is +/- R 100 000.
Will Seller settle or Buyer to take over?
The Buyer to take over.
Are they presently insured?
All assets are comprehensively insured.
Low overheads. Extensive and diversified customer base. Very long established and a trusted supplier for decades. The business has sustained the philosophy of uncompromised quality and service over an extended period which is appreciated and rewarded by customers.
Seasonality results in low earning and high earning periods.
The main competitor cannot match the price and service offered and has very high overhead expenses. The goal is to optimise production capacity by growing the market share in the home market segment
As with all businesses the current economy is a threat.
What is the reason for the sale?
The seller has reached retirement age after forty years in the business and will be relocating overseas.
Why is this a good business?
The business is extremely well established with a good customer spread, resulting in no singel customer responsible for a large percentage of the revenue. Customers has very little interaction with the seller direct which would make the transfer to a seller much less risky.
What is the price plus stock and the net profit?
The selling price of the business is R 3,720 000 plus stock of R 280 000 with a net profit of R 129 ,856 pm plus, before owner's drawings, depreciation, interest and tax.
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