Sectors / Category

Annual turnover

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  • Mandate: 34346
  • Added: 19 Nov 2020
  • AFS
  • 274

Very Profitable Racking and Shelving Business - Gauteng and KZN

Gauteng, Midrand Area
274
Mandate 34346
Added 19 Nov 2020
R 6,500,000* ZAR
Stock: R 1,000,000
Assets: R 1,245,100
R 262,222 ZAR
Erich Haupt
(PRINCIPAL)
Aldes Optima
Gauteng
Summary

This very profitable racking, shelving and mezzanine floor business has offices in both Gauteng and KZN and operates nationally.

Very Profitable Racking and Shelving Business - Gauteng and KZN
SELLING PRICE AFS
R 6,500,000* ZAR
Stock: R1,000,000
Assets: R1,245,100
R 262,222 ZAR
Summary

This very profitable racking, shelving and mezzanine floor business has offices in both Gauteng and KZN and operates nationally.

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Fully describe the business's activities?
Supplier and Installer of racking, shelving and mezzanine floors to clients from major supermarket groups through to smaller clients.

How long has the business been established?
13 years. The business was established by the owner in 2007.

How does the business operate on a daily basis?
MD sits in Johannesburg and oversees the company nationwide from there. There are 3 x staff members who are also based in Johannesburg. There is also an office in Durban which is overseen by a GM.

How are the clients attracted to the business?
The business has 3 x sales people in Johannesburg and 3 x sales people in Durban who work on Key Accounts as well as new business. The website is an active e-commerce site with good traffic. A number of smaller clients order and pay online and then delivery takes place thereafter.

What Advertising/Marketing is carried out?
Sales Representatives are very active in both Gauteng and KZN. However, clients are from all over the country.

Does the business have any contract work?
The business gets a signed project contract for the duration of the project for all installations until completion of the project. eg Shoprite or Spar.

What competition exists?
There are others out there but this business is the only one with a Johannesburg and KZN footprint and office.

What are the seasonal trends?
The business is closed over Christmas and New Year but is pretty constant from February onwards.

Is the business VAT Registered?
Yes, the business is VAT regsitered.

What VAT documentation is on file?
Normal monthly VAT returns and recons are on file.

Are there up-to-date Management Accounts available?
Yes, there are up-to-date Management Accounts available.

What percentage of the business is cash/credit?
All clients pay by EFT. On the installation projects for the large clients 50% deposit is paid upfront, 40% on goods arriving on site and 10% on completion of job.

What is the age analysis of the debtors book?
30 to 45 days.

How could the profitability of the business be improved?
If the Johannesburg/Gauteng footprint was increased even more this would add to the top line immediately resulting in more profits.

What is the total staff complement?
There are 14 staff members plus the owner who is MD. Johannesburg: 1 x MD and 3 X Sales and Key Account Executives. Durban: 1 x GM, 3 X Admin, 2 x Sales and Key Accounts, 4 x Installers, 1 x Driver.

Do any receive special perks or incentives?
Non-sales staff may get a bonus but at only at Management's discretion. Admin lady normally gets a bonus.

Are they on contract?
Yes, staff have letters of appointment.

Do any have management potential?
Yes, in both Durban and Johannesburg there are individuals who have been identified.

How involved is the Owner in running the business?
The owner is involved in the business everyday as MD and oversees the business as a whole from Johannesburg.

When does the current lease end?
The lease is a month-to-month lease.

Is there an option of renewal & what period?
Yes, there is an option for renewal.

What is the annual escalation %?
The escalation is currently at about 5%.

What are the trading hours?
Monday to Friday: 8.00 am to 4.30 pm.

What is the square meters of the business?
Approximately 200 sqaure meters.

Do you require a licence?
No special licence is needed to run this business.

What lease deposit and/or other surety is required?
Approximately 2 months deposit.

What are the main assets of the business?
1 x Hyundai 100, tooling for installing, approximately 10 laptops, 3 x desktops plus desks and chairs etc

What is their overall condition?
Good to excellent.

Do any require repairing?
No, all are in good order.

How have they been valued ?
Net realisable value.

Which assets are on lease/HP and with whom?
The Hyundai is still on lease and there is a agreement for the printers.

What are their settlement amounts?
Hyundai: R200 000 is owing at R5 615 per month

Will Seller settle or Buyer to take over?
Buyer to take over.

Are copies of agreements available?
Yes.

Are they presently insured?
Yes, the entire business is comprehensively insured

Strengths?
Profitability, staff knowledge, excellent reputation, easy to manage remotely like the current owner does. Scalability: can grow quite easily with bigger footprint, especially in Gauteng.

Weaknesses?
Normal competition but the footprint can easily be grown nationally.

Opportunities?
Growth ofJohannesburg/Gauteng/inland regions. Cape Town can also grow with some decent input.

Threats?
Normal economic conditions.

What is the reason for the sale?
The owner is relocating.

Why is this a good business?
Profitability is very good. Can grow this business easily and quickly starting with Johannesburg/Gauteng. Referrals. Excellent staff. The business provides the owner with avery good lifestyle.

What is the price plus stock and the profit?
The asking price of the business is R5.5 million plus stock-at-cost of approximately R1 million = R6.5 million. Adjusted Net Profit accruing to the owner is about R3.1 million.

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FRANCHISE DETAILS

Aldes Optima

1 members
10 active mandates
Gauteng
P.O. Box 588
2153

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