Sectors / Category

Annual turnover

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  • Mandate: 29605
  • Added: 17 Feb 2017
  • 457

Meat processing, cold storage & retail butchery in North Durban

KwaZulu-Natal, Durban
457
Mandate 29605
Added 17 Feb 2017
R 6,300,000* ZAR
Stock: R 1,000,000
Assets: R 990,000
R 196,188 ZAR
Cliff Bell
(PRINCIPAL)
Aldes Exclusive
KwaZulu-Natal
KwaZulu-Natal
Summary

Steady Net Profits again ! (closed off 2019 Management Accounts). Butchery (manager run) that covers meat processing, cold storage & a retail store, in the North of Durban. Has operated for 26 yrs, with managers in charge of 3 divisions & owner merely controls the strings. Turnovers of R48m pa, lead to Net Profits of R2.6m pa, while the Sale Price is an excellent R5.3m excl stock of R1m (with Current assets & liabilities to the sellers account)

SELLING PRICE
R 6,300,000* ZAR
Stock: R1,000,000
Assets: R990,000
R 196,188 ZAR
Summary

Steady Net Profits again ! (closed off 2019 Management Accounts). Butchery (manager run) that covers meat processing, cold storage & a retail store, in the North of Durban. Has operated for 26 yrs, with managers in charge of 3 divisions & owner merely controls the strings. Turnovers of R48m pa, lead to Net Profits of R2.6m pa, while the Sale Price is an excellent R5.3m excl stock of R1m (with Current assets & liabilities to the sellers account)

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Fully describe the business's activities?
Steady Net Profits again ! (closed off 2020 Management Accounts) & literally NOT affected by COVID !. Processing & Cold Storage Plant separate from the Retail Butchery (2 separate CC's) that are integrated from a business perspective, within Durban's Northern Suburbs. Well known & long established, with managers & staff in place, requiring minimal owner involvement.

How long has the business been established?
26 years by the owner

How does the business operate on a daily basis?
Bulk meat/whole carcasses are purchased in, then processed & packaged for the butchery & offal sales. Main product lines are lamb, & chicken portions, as well as, self-processed sausages.

How are the clients attracted to the business?
Being well known & long established, clients naturally support the butchery, with indoor promotions being the only marketing activity.

What Advertising/Marketing is carried out?
None

Does the business have any contract work?
No

What competition exists?
Various competitors, but independents lack price & quality competitiveness (through bulk buying & storage capabilities), while chain stores lack the product variation & quality aspects.

What are the seasonal trends?
Holiday periods especially December have the highest turnovers - which will be borne out in the management accounts (available), although this Report is based on averaged annualised figures for the year.

Is the business VAT Registered?
Yes - but VAT documentation is for the Group not these two linked businesses & therefore would not be useful in an investigation process. Till systems, MA's and invoices would be utilised to substantiate figures, which the owner is willing to back.

Are there up-to-date Management Accounts available?
Management accounts are available some 2 months in arrears & will indicate monthly variances, although this Report is based on averaged annualised figures from the 2016/17 Management accounts. They show as per previous years a growth of turnover on 2016 AFS's. 2017/18 & 2018/19 figures are also showing similar results.

What Balance Sheet and Income Statements are available?
AFS are not available due to this business belonging to a Group of which it only forms a part thereof. However, it is has till systems with books of accounts, that would suffice to prove turnover etc, as would invoicing. Net Profits include the NPBIT of the two businesses and the add-back of the owners remuneration.

What percentage of the business is cash/credit?
The majority of sales are cash or credit card, with literally no credit provided to clients

What is the age analysis of the debtors book?
n/a

How could the profitability of the business be improved?
Push to supply restaurants, hotels, etc. Advertise the butchery in local papers and create a website (perhaps with recipes etc)

Is Seller finance available and for what amount?
N/a

What is the total staff complement?
13 at the cold storage & 16 at the butchery (with each having a manger included therein)

Give a breakdown of staff/ functions/ length of service?
Across functions with 8 having more than 10 yrs service

Do any receive special perks or incentives?
No

Are they on contract?
Yes

Do any have management potential?
The managers of each of the businesses operate their sides independently & without requiring supervision or management !

How involved is the Owner in running the business?
Established & operated for 26 years by the owner who wishes to retire, and who has ensured that all managers & staff operate the business without the owners intervention.

When does the current lease end?
Processing & Cold Storage : Owned by seller; Butchery : July 2018

Is there an option of renewal & what period?
Processing & Cold Storage :May rent or purchase; Butchery : 3 yrs

What is the annual escalation %?
Processing & Cold Storage : 8%; Butchery : 8%

What are the trading hours?
Processing & Cold Storage : 6 days: 8-17h00; Butchery : 7 days: 8 -18h00

What is the square meters of the business?
Processing & Cold Storage : 1040m2 @ R73 000 pm @ excl vat; Butchery : 175m2 @ R79 000 pm excl vat.

Do you require a licence?
City Council annual Licence is required as is Health Department checks

What lease deposit and/or other surety is required?
2 month deposit for the lease is required

What are the main assets of the business?
Processing & Cold Storage : Plant & machinery, consisting of cold storage rooms, metal tables, saws, meat extruders, knives, 2 delivery trucks - Cost R3.7m depreciated to zero, but worth some R690 000. To clarify: 4 freezers & 1 blast room = 350 pallets (but 1 small freezer & the blast room, equal some 140 pallets thereof are actually not used and are off at the moment) 1 cold room for some 350-400 carcasses and approx. 60-80% used Butcheries : Display fridges, racks, tills & counters, security systems - Cost R1.8m, depreciated to zero, but worth some R300 000.

Are any items not included in the sale?
Everything is included

What is their overall condition?
Good working condition

Do any require repairing?
No, but maintenance is ongoing

Which assets are on lease/HP and with whom?
All paid up

Strengths?
Well known & long established, with managers & staff in place, requiring minimal owner involvement.

Weaknesses?
Perhaps low owner supervision allows for pilferage which if picked-up could improve profits

Opportunities?
Push to supply restaurants, hotels, etc. Advertise the butchery in local papers and create a website (perhaps with recipes etc)

Threats?
Other competitors could come into the area, but if not vertically integrated as this business is, then any new business is unlikely to actually be real competition.

What is the reason for the sale?
Established & operated for 26 years by the owner who wishes to retire.

Why is this a good business?
Well known & long established, with managers & staff in place, requiring minimal owner involvement, with excellent Profits and Sale Price.

What is the price plus stock and the profit?
The Sale Price is R5.3m excluding R1m stock, with Net Profits of R2.6m pa, with minimal owner intervention, as managers in place. The Sale Price as with small businesses excludes Current Assets & Liabilities, which are to the account of the Seller OR SP adjusted thereby.

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AGENCY DETAILS

Aldes Exclusive

2 members
15 mandates
KwaZulu-Natal
11A Coghill Avenue, Kloof
4000

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