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Annual turnover

  • Mandate: 34085
  • Added: 27 Jun 2020
  • AFS
  • 298

IT Reseller with Government Contracts in Pretoria

Gauteng, Pretoria
Mandate 34085
Added 27 Jun 2020
R 10,150,000* ZAR
Stock: R 0
Assets: R 1,628,014
R 207,248 ZAR
Ian Tennant
Aldes Egoli
Gauteng, Hartbeespoort
Gauteng, Hartbeespoort

This Pretoria based IT Reseller has contracts with major blue chip IT suppliers and focuses on the public sector, in particular. It is an owner run business with great potential to grow further with additional sales personnel

R 10,150,000* ZAR
Stock: R0
Assets: R1,628,014
R 207,248 ZAR

This Pretoria based IT Reseller has contracts with major blue chip IT suppliers and focuses on the public sector, in particular. It is an owner run business with great potential to grow further with additional sales personnel

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Fully describe the business's activities?
The business is based in Pretoria and is a leading independent service provider offering Information Technology turnkey related products and solutions to both the Public and Corporate sectors. The focus is to supply only top tier products, professional services and support which ensures solid and lasting client relationships

How long has the business been established?
Since 2016

How long has the owner had the business?
Since 2016

How does the business operate on a daily basis?
8.00 to 17.00

How are the clients attracted to the business?
Mainly as the result of the business being registered as a supplier on the South Africa Government’s approved supplier register / database. Corporate clients through repeat business, word of mouth and sales initiatives. Excellent service and personal attention results in repeat business Much of the business is obtained through competitive bidding on tenders. The company is a level 1 BEE contributor and an Exempt Micro Enterprise (EME) or Qualifying Small Enterprise (QSE) that the Government is currently focusing to uplift.

What Advertising/Marketing is carried out?
Working predominantly with Government Departments, the company has been operating in terms of the SITA RFB 2007 contract since 2016. It has also submitted an application for the SITA RFB 2005 and RFB 2009 tenders which are in the final stages of being awarded. The company is optimistic that they will awarded these tenders too. The advantage being on these contracts means that the company does not need to spend unnecessarily on advertising and marketing.

Does the business have any contract work?
Yes, the current contracts include: - South Africa Post Office - SITA RFB 2007 - Government Pension Fund

What competition exists?
There are numerous competitors but the company has an unique selling proposition that gives it a competitive advantage. It is the only active re-seller that sells SITA and National Treasury approved re-engineered products to all Government Departments. Currently the company literally wins all the quotations as the competitors cannot compete on price.

How did the Covid-19 pandemic impact the business turnover / daily operations?
The company has not been adversely affected by the lockdown as three major Government Departments issued orders directly after the 21 day lockdown was lifted (these would have been awarded during that period if the lockdown had not occured)..

Is the business VAT Registered?

What VAT documentation is on file?
All registration and Vat return documentation

Are there up-to-date Management Accounts available?

What Balance Sheet and Income Statements are available?
The annual financial statements from February 2017 to February 2019 have been completed. February 2020 management accounts are available.

What percentage of the business is cash/credit?
There are no cash sales. In terms of credit sales, all Government Departments work on 30 day payment terms (from date of delivery). The company only selects Government Departments that are in good standing and adhere to these payment terms. On the supply side, the company has 30 day payment terms with all major IT Distributors.

What is the age analysis of the debtors book?
With the exception of an acceptable number of queries, all accounts are current

How could the profitability of the business be improved?
Currently the company comprises the managing director who is responsible for the entire sales, operational and finance functions. Despite this, an annual average turnover of R10m is achieved. Additional staff to share the workload and expand the business will result in higher turnover and profitability.

Is Seller finance available and for what amount?

What is the total staff complement?
One, the Managing Director

Office Premises
The business is run from the Managing Director’s private residence. The business operations are very streamlined. Stock is delivered directly to the end user by the suppliers which means there is no need to invest in a leased premises or additional staff. There is also no need for Government Departments to visit for meetings etc. Currently a small space of about 10 sqm is used. The company adapts to the Government’s working hours and needs but works an average of up to 8 hours per day.

What are the main assets of the business?
The assets comprise normal office equipment (desk, laptop, printer etc.) and motor vehicle. The assets are not being sold.

The business is established and has built solid business relationships with suppliers and clients. It has a high success rate in the bidding for tenders and being on the SITA contract list ensures that the Government requests quotes from the company for all the products covered by the contract. The company’s strengths include quick turnaround times and its unique selling proposition mentioned above.

Currently it is a one-person operation with resultant constraints in terms of the amount of productive and focused hours that can be brought to bear on the business

Additional sales personnel and a wider geographical footprint will grow the turnover and profitability

Competition, in most businesses, will always constitute a threat, but in this instance the company has a unique competitive edge in that it is the only active re-seller that sells SITA and National Treasury approved re-engineered products to all Government departments. The only foreseeable threat is that the high standard of current service excellence might be compromised with only one staff member working under more pressure and a growing workload as a result of the award of the new tenders mentioned above.

What is the reason for the sale?
The owner is planning to emigrate

Why is this a good business?
The business has acquired an excellent reputation over the last 5 years and currently has a solid client-base plus SITA contracts that are renewed annually, if the basic requirements are met. The fact that one person has been able to maintain an annual turnover of around R10m per annum speaks volumes about the potential that the business has for a new investor

What is the price plus stock and the profit?
The selling price required is R10,165,000. The annual profit is R2,5m. The company does not hold stock and has minimal overheads.

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Aldes Egoli

1 members
9 active mandates
Gauteng , Hartbeespoort
51 Woodlands Avenue Peacanwood Estate Hartbeespoort 0216

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