Fully describe the business's activities?
Manufacturer and importer of specilaised glass containers used in the pharmaceutical and cosmetic industries. The company also prints on glass containers for clients and packages and fills the containers for some clients with the clients products.
How long has the business been established?
The business has been established since 2010 and was established by the owner.
How does the business operate on a daily basis?
Manager/machine setter opens and closes the business on a daily basis. He also ensures all machines are up and running for the day. Owner signs of all purchases and operates at a strategic level. Orders from clients are processed by sales dept and there is a resident bookkeeper in place.
How are the clients attracted to the business?
There is 1 x Sales REp on the road plus the website attracts business. Google Adwords are also used to ensure attraction to the website.
Does the business have any contract work?
The industry in which they operate does not work on a contract basis but does work on a "preferred supplier" basis. Customers include "blue chip" pharmaceutical companies and cosmetic companies. They do not change suppliers easily and this is a barrier to entry to new competition. This company is also the only local manufacturer of certain glassware used by the pharmaceutical, healthcare and cosmetics industries.
What competition exists?
None really on the local manufacturing side. The company also imports certain items
What are the seasonal trends?
June and July is very busy. Rest is constant. They close for 3 weeks in December/early January.
Is the business VAT Registered?
Yes, the business is VAT registrerd.
What VAT documentation is on file?
Normal VAT returns and documentation is on file.
What Balance Sheet and Income Statements are available?
What percentage of the business is cash/credit?
The big corporates pay by EFT. There is an element of cash from some other clients.
What is the age analysis of the debtors book?
Mostly 30 days.
How could the profitability of the business be improved?
If the new owners are interested - government work could be very large. The owners have not really pursued this revenue stream.
What is the total staff complement?
16 x Factory Floor Workers; 7 x Office Staff (including owner) ; 1 X Sales; 1 x Bookkeeper; 1 x Buyer/Dispatch; 1 x Machinary Maintenance; 1 x Factory Supervisor; 1 x Quality Control, 1 x Receptionist
Do any receive special perks or incentives?
Bonuses at year-end are only paid at management's discretion. Staff have medical aid and pension fund.
Are they on contract?
Yes, staff have letters of appointment.
Do any have management potential?
Yes, the bookkeeper and the dispatch person have definite management potential.
How involved is the Owner in running the business?
The owner is involved in the business everyday however frequent breaks are taken.
When does the current lease end?
The current lease end in February 2022.
Is there an option of renewal & what period?
Yes, there is an option for renewal which is normally for 3 years.
What is the annual escalation %?
At the moment there is no escalation.
What are the trading hours?
Monday to Thursday: 7.30 am to 4.30 pm. Friday: 7.30 am to 1.30 pm.
What is the square meters of the business?
The factory, warehouse and offices combined are 1 800 square meters.
Is a copy of the lease available?
Yes, copy of the lease is available.
Do you require a licence?
No special licence is required to run this business.
What lease deposit and/or other surety is required?
Currently the lease deposit is 2 x monthly rental but would have to be negotiated with the landlord.
What are the main assets of the business?
Glass vessel manufacturing machines; labelling machines; filling machines; glass cutting machines; test tube machines; "dropper" machines; bagging machine; assembly machines for teats and caps; plastic wrapper machine; 1 x 8 Tonner Truck; 1 x bakkie; office furniture and equipment; computer equipment.
What is their overall condition?
Good to excellent. There is a full time maintenance man on site.
Do any require repairing?
No. Full time maintenance man on site.
How have they been valued ?
Net realisable value.
Which assets are on lease/HP and with whom?
All assets are fully paid for.
Are they presently insured?
Yes, all are comprehensively insured.
Nicely profitable. Corporate clients. No local manufacturing competition. Product knowledge of all the staff. Excellent Service skills of the staff.
Normal economic conditions. However their products are always needed.
Government work could be huge growth for this company. More reps on the road will also make a difference to top and bottom line.
Imports can sometimes affect pricing in the market but the company has moved into doing certiam imports itself to negate this threat.
What is the reason for the sale?
The owner wishes to retire.
Why is this a good business?
Good profitability. Corporate blue chip clients. Nice lifestyle for owner. No real competition in SA on the local manufacturing side.
What is the price plus stock and the profit?
The asking price of the business is R10 million plus stock of approximately R2 million = Total R12 million. The adjusted net profit of the business is R4 067 000.
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