Sectors / Category

Annual turnover

  • Mandate: 32973
  • Added: 13 May 2019
  • AFS
  • 470

Long established and very profitable manufacturing business in the Garden Route

Western Cape, Garden Route
Mandate 32973
Added 13 May 2019
R 11,650,000* ZAR
Stock: R 1,400,000
Assets: R 6,400,842
R 423,920 ZAR
Noel Heath
Aldes Triumph
Western Cape
Western Cape

This business focuses on agricultural equipment primarily and is well known in the industry for their service levels and quality. No job too big or too small, they have serviced their market for over 20 years and are still showing growth potential despite the recent market downturn.

R 11,650,000* ZAR
Stock: R1,400,000
Assets: R6,400,842
R 423,920 ZAR

This business focuses on agricultural equipment primarily and is well known in the industry for their service levels and quality. No job too big or too small, they have serviced their market for over 20 years and are still showing growth potential despite the recent market downturn.

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Fully describe the business's activities?
Designing, manufacturing and commissioning of industrial feed plants throughout South Africa and general engineering and repair work for the local farmers in the region. Occasional crane hire.

How long has the business been established?
Since 1999

How long has the owner had the business?
This business has been taken over by the son from his father.

What steps are in place to solve 'load shedding' problems?
A suitable generator is in place and has sufficient capacity to ensure than there is no downtime or production loss due to load shedding.

How does the business operate on a daily basis?
The Owner oversees the General Management production function whilst his wife oversees the Financial requirements of the business.

How are the clients attracted to the business?
Unique business as they design and produce equipment purpose made to client requirements. Predominately word of mouth, and many clients buy replacement parts from this business who originally manufactured the clients machinery. Strong repeat business as they are well established .....over 20 years now. Suppliers of replacement parts for original equipment. The business is unique as they can tailor make equipment to the specific requirement of the customer. Well known for their service levels and commitment to quality.

What Advertising/Marketing is carried out?
Very little marketing required.

Does the business have any contract work?
No signed contracts in place but substantial repeat business.

What competition exists?
The largest and best equipped manufacturing facility in the area and very limited competition. Other similar operations in the region are not able to offer the level of expertise in manufacturing and production that this business offers. Exclusive product range that are not available elsewhere as well as spares for the equipment that they previously produced.

What are the seasonal trends?
Business not impacted significantly by seasonality.

Is the business VAT Registered?

What VAT documentation is on file?
Tax clearance certificate and VAT101 documentation.

Are there up-to-date Management Accounts available?

What Balance Sheet and Income Statements are available?
All financials are or will be up to date at time of sale. The business will supply Sage Pastel Income Statements and Trial Balance to a qualified Buyer when required.

What percentage of the business is cash/credit?
Payments are predominately made by EFT. Deposit on all orders ensure positive cash flow.

How could the profitability of the business be improved?
The business has the potential to increase its work force and take on more projects and currently the overseas market is a strong opportunity. A limited amount of exporting has been undertaken but this is by exception and no international marketing drive is in place. It could benefit to open a satellite operation in one of the larger coastal towns of the region whilst retaining production at the current facility.

What is the total staff complement?
Total of 18 Staff plus Owner. Financial Manager Workshop Manager 2 Admin staff 3 Machine shop staff 11 Welding workshop

Give a breakdown of staff/ functions/ length of service?
General Manager Owner ....Over 20 Years. Financial manager...15 Years. 2 Admin Staff 8 Years and 1 year respectively. Workshop team / Machine Shop Team and Welding Team. Welder also doubles up as the site foreman.

Do any receive special perks or incentives?
Yes, they are offered production based incentives at various times. 13th Cheques.

Are they on contract?
All are employees of the business.

How involved is the Owner in running the business?
The Owner is involved on a daily basis in a General Management role and oversees the manufacturing and production and also quality assurance. This business is ideally suited for a person with an engineering background who can manage the transition from the Seller to themselves and can handle the machinery designs since this is done in-house and is computerised on Solidworks.

When does the current lease end?
The Owner is also the land owner and are prepared to offer the Buyer a lease by agreement. Although there is currently no lease in place a rental provision has been provided for in the Income Statement. There is an opportunity to buy the land and building if desired.

Is there an option of renewal & what period?
Subject to negotiation.

What is the annual escalation %?
Subject to negotiation

What are the trading hours?
Monday – Thursday: 07:15 – 17:00 Friday: 07:15 – 15:15

What is the square meters of the business?
10,787 square meters in total. Main Building with admin offices Workshop 2 Stores undercover Store Covered Workspace Open Store (±884m²).

Do you require a licence?

What lease deposit and/or other surety is required?
Subject to negotiation

What are the main assets of the business?
Equipment Vehicles Office Electronic & software The intellect includes many years of machine design drawings which are unique to this business.

Are any items not included in the sale?
Everything on the equipment list as well as all drawings and design of machines with the intellect is included.

What is their overall condition?
All the assets of this business have been very well maintained and the premises themselves are in outstanding condition.

Do any require repairing?

How have they been valued ?
Owners estimated second hand or replacement value.

Are they presently insured?

Market leader in manufacturing and installing agricultural machinery. Well known brand within the feed plant market. Situated in a Garden Route town offers cost effective overheads and labour but still with strong long standing employee loyalty. Business is know nationally for their skills within their field of expertise and service levels. Well-equipped workshop including CNC plasma, CNC Lathe, Backup Generator minimises downtime during load shedding. Crane truck to assist with installation and hired out periodically. Excellent historic track record.

The main weakness is to train up staff to satisfactory levels

There is a definite opportunity within this sector internationally that has yet to be exploited. This main business could well benefit from a second "hub" within one of the Garden Route coastal towns.

If this business remains well managed and production stays in line with market requirements then there is no known threat to the business. The more informal operators do try and impact within this sector but not significantly.

What is the reason for the sale?
The Owners have young children and would prefer the family to be living elsewhere so have started the emigration process and the relinquishing of the business is one of the final phases. They may well consider working with the Buyers despite being based off shore if the new owners would like that.

What is the profile of the ideal buyer?
The buyer of this business should be an engineer or a qualified tradesman who has strong interpersonal skills. The history of the business having remained family owned for many years means that relationships with customers are of paramount importance and the Buyer will need to nurture these relationships. The business would be well suited as an acquisition to a similar manufacturing business who is already operating in the agricultural sector and looking to expand its footprint in the Southern Cape as well as nationally with these products.

Why is this a good business?
The feed plant equipment range is the best on the market locally being produced in South Africa. The amount of completed feed plants in the country ensure that there is an immediate market after the sale of each machine for replacement parts, which is a steady income in itself.

What is the price plus stock and the profit?
The asking price of the business is R11,650,000 and stock is in the region of R1,4 Million. The projected net profit for year 2020 (with rental provision for the Buyer) will be in the region of R2,6 Million.

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