Fully describe the business's activities?
The business is a security company offering a vast range of services. They offer the highest level of professionalism to their clients in order to help them to minimize and eliminate the chance of security breaches or theft. They use the latest technologies to help combat crime in all its forms. Their service includes but is not limited to, Vehicle Escorting, local and cross-border; General Investigations; Polygraph testing; One-day turnaround vetting services to check applicants Criminal Records, ITC, Drivers licenses and PDP's- as well as the validity of Tertiary Qualifications; V.I.P Services local and International; Security Audits; Financial Audits and can assist with the writing of Security Manuals and Policies & Procedures. The business complies with TAPA (Technology Asset Protection Ass.); FSR (Freight Security Requirements) & SASACertification. They also offer Technical Security in all aspects including CCTV, Access Control, Intercom etc. as well as a bugging & debugging services of homes, offices and cars. They also sell a wide range of security products, e.g. Bolt Seals, Plastic Seals, Padlocks, Pepper Spray, Handcuffs etc., although this latter part of the business is not a priority and it could be an attractive source of additional income if more focused is placed on it.
How long has the business been established?
The current owner started the business in 2007. The business originally traded as a CC but was converted to a (Pty) Ltd in 2017.
How long has the owner had the business?
Since inception in 2007.
How does the business operate on a daily basis?
All types of security services being offered with the exception of residential armed response. Clients either require pre-determined services e.g. guarding for existing customers or receive orders for load escorts and other investigative types of services on a given date. These requests might also come in on short notice and that is one of the trademarks of the business that they are willing and able to assist regular clients on short notice.
How are the clients attracted to the business?
Mainly by word-of-mouth.
What Advertising/Marketing is carried out?
Currently none other than their website. In the past, they did some Bill Board advertising, but none in the last 3-4 financial years.
Does the business have any contract work?
Up to very recently the seller only signed SLA's with customers but they have started to enter into formal contracts with some customers (3 customers) in the last couple of months. These contracts include one or two long-standing clients. The seller will continue to convert SLA's to contracts where possible, but it will take some time until all clients have signed contracts.
What competition exists?
There is a large range of security companies competing with the business but none of them is as well entrenched in especially the vehicle escort market and some of the smaller companies does not meet the legislative requirements.
What are the seasonal trends?
No real seasonal trends due to the type of services offered, but the seller mentioned that the armed vehicle escort services are in high demand, especially in the latter part of the year.
Is the business VAT Registered?
The business is a registered VAT Vendor.
What VAT documentation is on file?
We have no VAT documentation on file, as their VAT returns are being handled by their accountant, who will supply returns on request during the due diligence process.
Are there up-to-date Management Accounts available?
We have Management Accounts up to end February 2020.
What Balance Sheet and Income Statements are available?
We have the financial statements for 2017 to 2019 on file. The accountant is close to finalising the Feb. 2020 financials and we would incorporate same as soon as it is available.
What percentage of the business is cash/credit?
100% of business is on credit except in special circumstances where a once-off service is required.
What is the age analysis of the debtors book?
Debtors as at 29 February 2020 was R2 810 123 of which the majority is current and 30 days.
How could the profitability of the business be improved?
The business is very active in the vehicle escort industry. According to the seller Â±45% of income is derived from vehicle escorting. There is an office in Johannesburg, and depots in Cape Town & Durban . Profitability will increase by marketing their services in all the other areas to the same level as in Gauteng
Is Seller finance available and for what amount?
The seller might consider Vendor Finance for not more than 25% of the purchase price and for no longer than 12 months. The same period seller would be willing to do a handover and ensure a smooth transition.
What is the total staff complement?
The total staff as at the beginning of November 2019 is 154 of which 126 is guards.
Give a breakdown of staff/ functions/ length of service?
We have a detailed staff list on file which will be made available to serious buyers. The primary staff who will remain in the business after the sale is the CEO who joined the company 11 years go. National operations manager - 6 years; 4 x Site managers between 1-2 years; HR manager, newly reappointed; Financial Manager 1 year; Polygraphist 1 year; 1 x Investigator; 6 Escort Drivers 1-10 years; PA 4 years; 4 Site managers and 3 x Control Room Assistants.
Do any receive special perks or incentives?
The managerial staff has company cars with some petrol allowances and cell phones.
Are they on contract?
All staff are permanently employed.
Do any have management potential?
Yes, the Investigative Manager is well trained in all aspects of the business and is the manager and fulfilling this responsibility very successful in the absence of the Seller. He will be a good candidate to replace the seller if the buyer of the business does not want to be fulltime involved.
How involved is the Owner in running the business?
The owner is 100% involved in the business albeit not necessarily in the office. He spends a lot of time on the road, making contact with existing clients and often forms part of an escorting team.
When does the current lease end?
The Seller bought premises on the West Rand during this calendar year. He would prefer the new owners to relocate the business as he has other plans for the property. We have made a R25 000pm provision for property rental and utilities.
What are the trading hours?
24/7, 7 days per week.
Do you require a licence?
The operator will have to be able to acquire a Firearm Competency Certificate. The business also has valid Private Security Industry Regulatory Authority Certificate(PSIRA) & SASA.
What are the main assets of the business?
Vehicles; monitoring equipment, and firearms. Most vehicles are still financed and the contracts must be taken over by the purchaser.
Are any items not included in the sale?
All operational assets will form part of the sale with the exception of the private vehicles (Ferrari) which is currently owned and financed via the business.
What is their overall condition?
All assets are in good operational condition.
Do any require repairing?
None. Regular maintenance and repairs are being performed on all assets.
How have they been valued ?
Seller is constantly in touch with motor dealers and has supplied the market value of vehicles which he has obtained from them.
Which assets are on lease/HP and with whom?
A number of vehicles used in the operation are subject to finance agreements. The outstanding capital on the financed vehicles which will form part of the sale was Â± R7 093 354 at the 29 Feb. 2020.
What are their settlement amounts?
This is an ever-changing figure and will have to be established during the due diligence process.
Will Seller settle or Buyer to take over?
The buyer will have to take over the finance agreements as the vehicles are operational assets.
Are copies of agreements available?
Copies of agreements will be made available during the due diligence process. The accountant keeps an up to date record of all changes in the asset register and have all finance contracts on file.
Are they presently insured?
All assets and business risks are comprehensively insured.
Long established business with a very good reputation; Large base of corporate clients; Good margins in armed vehicle escorting services ( Â±60%); The business is a Level 2 BEE company.
High risk type of business; Industry (Bottom line costs); Recruitement of quality staff.
Marketing on a national basis The Level 2 BBEE accreditation was only approved on 7 June 2018, which has since then opened many doors for new business and they might even win back one or two of the governmental contracts they lost to non-compliance on a BEE level.
Changes in Government Regulations and legislative changes.
What is the reason for the sale?
The seller started the business from scratched and spend many hours in building it to its current status. He feels he requires a break from the responsibility to manage the business and would like to take an extended rest before he gets involved in some other opportunity in the future (not security).
Why is this a good business?
A well-established business with an excellent industry reputation and extensive client base. Profitable. Lots of potential for further growth, especially with the Level 2 BBEE accreditation. The seller is willing to do a handover period of up to 6 months if so required by a buyer.
What is the price plus stock and the profit?
The asking price is R14 000000 plus the take over of finance agreements (variable) with an average net profit before owner's drawings, depreciation and tax of R484 151 p.m.for the period March 2109 to February 2020. The full instalments (interest plus capital was deducted as an expense for profit calculation purposes, therefore, we do not show depreciation and finance charges). We have made no further provision for a manager's salary as there is a qualified manager in the business earning in the region of R55k pm with a company car, pension and cell phone benefits already being reflected in expenses.
Discover similar, inspiring businesses for sale
Annual Turnover Amount between R 500 thousand and R 6 million