Sectors / Category

Annual turnover

  • Mandate: 30925
  • Added: 25 Apr 2017
  • 2383

Engineering of Specialised Product Business

KwaZulu-Natal, Durban
Mandate 30925
Added 25 Apr 2017
R 1,864,000* ZAR
Stock: R 64,000
Assets: R 614,000
R 48,612 ZAR
Mike Boustred
Aldes Supreme

An easily manageable business serving the printing and packaging sectors, manufactures and maintains a specialised product. Offers scope for growth.

Engineering of Specialised Product Business
R 1,864,000* ZAR
Stock: R64,000
Assets: R614,000
R 48,612 ZAR

An easily manageable business serving the printing and packaging sectors, manufactures and maintains a specialised product. Offers scope for growth.

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Fully describe the business's activities?
The business manufactures and services a particular engineering component for the printing and packaging industries.

How long has the business been established?
The business was started in 2010 and registered in 2011.

How long has the owner had the business?
The business was started by the owner.

How does the business operate on a daily basis?
Customers request the company to pick up and quote for repairs of the unit. Once these are evaluated, a quotation for repair of the old unit or a quotation for the supply of a new unit is submitted. Once approval of the quote is received, the workshop services the unit or builds a new unit.

How are the clients attracted to the business?
The vast majority of work carried out comes from customers who have experienced the good service this company has offered in the past. The owner does very little visiting of existing customers and does not actively seek new customers.This creates an opportunity for a new owner to develop.

What Advertising/Marketing is carried out?
Very little marketing is done by the owner and customers contact the company largely on the back of good service that they have received on past orders.

Does the business have any contract work?
There is no direct contract work but the majority of work comes from repeat business.

What competition exists?
There are 3 other companies that supply the same unit in the Durban area however no other supplier provides the service demanded by the industries which this company services.

What are the seasonal trends?
There are no real seasonal trends.

Is the business VAT Registered?
The business is vat registered.

What VAT documentation is on file?
All Vat documentation is on file.

Are there up-to-date Management Accounts available?
Up to date Management accounts are available.

What Balance Sheet and Income Statements are available?
February 2017 is available.

What percentage of the business is cash/credit?
Approximately 95% of the business is done on a 30 day basis.

What is the age analysis of the debtors book?
Customers pay reliably and the debtors book sits at 30 days.

How could the profitability of the business be improved?
The lack of marketing effort provides the biggest opportunity for expansion. This could be done by the new owner or a sales rep could be hired.

Is Seller finance available and for what amount?
No seller finance is available.

What is the total staff complement?
The business employs 3 people.

Give a breakdown of staff/ functions/ length of service?
There is a technician, a driver and a cleaner. Both the driver and the technician are capable of working on the CNC machines when the demand arises.

Do any receive special perks or incentives?
There are no special perks.

Are they on contract?
All staff are on standard employment contracts.

Do any have management potential?
The technician is very capable of running the production and repairs of units.

How involved is the Owner in running the business?
The owner is involved in the business on a full time basis. He performs the functions of invoicing, quoting and the production of drawings.

When does the current lease end?
The current lease ends in October 2017 but the landlord would be willing to sign a new lease.

Is there an option of renewal & what period?
Yes, for 3 years or more depending on negotiations with the landlord.

What is the annual escalation %?
Annual Escalation is 10%.

What are the trading hours?
Mon to Thur 7 to 4 Fri 7 to 2

What is the square meters of the business?
The business occupies a building of 405 square meters of which 200 square meters are sub leased out.

Is a copy of the lease available?
A copy of the lease is available.

Do you require a licence?
No special license is required.

What lease deposit and/or other surety is required?
One month's rent.

What are the main assets of the business?
The main assets are a CNC controlled milling machine, lathe and general engineering machinery. The company also owns a bakkie which it uses for delivery and pickup.

Are any items not included in the sale?
The owners vehicle and personal effects are not included in the sale.

What is their overall condition?
All assets are well maintained.

Do any require repairing?

How have they been valued ?
Assets have been valued at current market value.

Which assets are on lease/HP and with whom?
One milling machine and one bakkie are on hp agreements.

What are their settlement amounts?
The milling machine has approximately R 60,000 outstanding while the bakkie has approximately R 140,000 outstanding.

Will Seller settle or Buyer to take over?
The buyer will take over the existing hp agreements.

Are copies of agreements available?

Are they presently insured?
All assets are currently insured.

This business operates in a market with little effective competition and margins are healthy. The product they produce is of a superior quality to the opposition and their service levels make this company a supplier of choice. The company has shown consistent growth over the last few years.

The lack of marketing has not allowed the business to reach its full potential.

The size of the market is difficult to predict but the potential to increase sales through marketing either by the new owner or by hiring a rep would yield increased profits on a fixed overhead.

While BEE does not appear to be a major stumbling block to sales at this stage due to the limited competition, the threat that a lack of BEE status could influence sales, is present.

What is the reason for the sale?
The owner has chosen to emigrate.

Why is this a good business?
The combination of a good quality product with high service levels has increased sales steadily over the past few years and this growth is expected to continue and increase with a greater marketing effort.

What is the price plus stock and the profit?
Price is R 1,800,000 plus stock.

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Aldes Supreme

2 members
20 active mandates
19 Reims Village, Le Domaine Estate

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