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?
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 administrative requirements of the business.
How are the clients attracted to the business?
Predominately word of mouth, and many clients buy replacement parts from this business as they manufactured the clients machinery originally. Due to the nature of the business there is strong repeat business as they are well established having been present for over 20 years now. They enjoy repeat business from those who already have their equipment and require repairs or replacement. The business is unique as they can tailor make equipment to the specific requirement of the customer. The business is well known for their service levels and quality of product produced.
What Advertising/Marketing is carried out?
Since their production schedule remains busy, there is very little advertising required.
Does the business have any contract work?
No specific contract work but a lot of clients use them ongoing as required.
What competition exists?
This business is the largest and best equipped manufacturing facility in the area and therefore enjoys a strong market share. There are other independents in the region but they are not able to offer the level of expertise manufacturing and production that this business offers. They also have an exclusive product range that is not available elsewhere and spares for the equipment that they produced.
What are the seasonal trends?
This business is not directly impacted by the seasonality of the Garden Route but does have its own trends.
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?
2018 statements completed. 2019 financial year still to be signed off. The business can supply Sage Pastel Income Statements and Trial Balance to a qualified Buyer when required.
What percentage of the business is cash/credit?
An advantage of the business is that deposits are taken on all work so cash flow remains positive. Payments are predominately made by EFT.
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. The profitability is solid and sufficient for the current Owners but with increased marketing the business could show strong growth. A limited amount of exporting has been undertaken but this is by exception and no international marketing drive is in place. It could also 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. The lease between the parties will be negotiated at market related rates. 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 but will be market related.
What are the trading hours?
Monday â Thursday: 07:15 â 17:00 Friday: 07:15 â 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 (Â±884mÂ²).
Who is the Owner/Landlord?
The Owner/Seller will become the landlord.
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. Any personal items shall be indicated at the initial visit to the business.
What is their overall condition?
All the assets of this business have been extremely well maintained and the premises themselves are in outstanding condition.
Do any require repairing?
How have they been valued ?
Values based on replaced cost of machines as well as second hand machine market value received from equipment reseller.
Which assets are on lease/HP and with whom?
All assets are fully paid for.
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 more competitive overhead and labour cost with strong long standing employee loyalty. Business is know nationally for their field of expertise and service levels and are a preferred supplier for many companies within this sector. 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. Very little outsourcing...almost all engineering done in-house. Service driven business. Excellent historic growth.
The main weakness in this business is the limited ability of the unskilled staff although they are extremely loyal
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?
Our 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 a immediate market after the sale of each machine for wear parts, which is a steady income in itself.
What is the price plus stock and the net 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 (with rental provision for the Buyer) will be in the region of R2,6 Million for year one.
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