Fully describe the business's activities?
Retailer and wholesaler of world-leading imported exterior and interior range of oil-based wood protection coatings. Over 40 different colours in the international range for the interior and over 20 colours for the exterior range. Unique product based on molecular binding. Only one coat needed in application. Favoured product in the construction and renovating industry.
How long has the business been established?
The business was extablished in 2007 and has therefore been trading in SA for 14 years. The current owners brought the product to South Africa.
How does the business operate on a daily basis?
The business has both a GM and a Branch Manager in Johannesburg. The GM overseas all sales for sub-Saharan Africa including Cape Town. The business also has a distributor in KZN and the Eastern and Southern Cape.There are about 15 distributors nationwide and into Africa.
How are the clients attracted to the business?
The business has 3 x Sales reps in JHB + the GM who also is involved in sales. There are 2 x In-house Sales people in JHB as well. Cape Town has 1 x Sales rep.
What Advertising/Marketing is carried out?
Besides the sales force in JHB and Cape Town excellent use is made of Instagram and other social media with a full-time marketing person on board who also ensures news letters etc go out. The annual Woodex show is exhibited at annually and this has proven to be very lucrative in procuring new sales as well as new clients.
Does the business have any contract work?
The business operates primarily as a retailer and wholesaler and supplies flooring companies, architects, builders, shopfitters etc. Mainly C.O.D. They also offer a maintenance programme.
What competition exists?
The competition can't really compete as the brand is so well-known for its quality.
What are the seasonal trends?
September to early December is exceptionally busy. Late December and early January closed for builders holidays.
Is the business VAT Registered?
Yes, the business is VAT registered.
What VAT documentation is on file?
Normal VAT returns and reconciliations are on file.
Are there up-to-date Management Accounts available?
Yes, there are up-to-date management accounts.
What percentage of the business is cash/credit?
60% to 70% a C.O.D business. Distributors have to pay within 14 days.
How could the profitability of the business be improved?
If more stock was moved via seafreight one could save 15% to 20% - but one would have to fill a container.
What is the total staff complement?
There is a total staff compliment of 16 between Johannesburg and Cape Town.
Give a breakdown of staff/ functions/ length of service?
An organogram is available to qualified interested parties. However a GM and Branch Manager are in place in the business.
Do any receive special perks or incentives?
All sales staff are on lower salaries with good commission incentives. The GM is also on a reasonable salary but incentivised with a good commission structure.
Are they on contract?
Yes, all staff have letters of appointment.
Do any have management potential?
Managers are already in place.
How involved is the Owner in running the business?
The owners are not in the business on a daily basis.
When does the current lease end?
JHB lease expires in October with a 3 year renewal available. Cape Town lease -1 year lease which is renewable.
What is the annual escalation %?
The annual esclation is currently 8%.
What are the trading hours?
The trading hours are Monday to Friday 7.30 am to 4.30 pm.
What is the square meters of the business?
270 Square meters.
Is a copy of the lease available?
Yes, a copy of the lease is available.
What are the main assets of the business?
Motor Vehicles, Fixtures and Fittings, Computer Equipment, Office Equipment, Office Furniture.
Which assets are on lease/HP and with whom?
There are certain vehicles which are on lease.
Will Seller settle or Buyer to take over?
Needs to be taken over as these vehicles are needed in the business.
Are they presently insured?
Yes, the business is fully insured.
Uniqueness of product. Sole supplier for SA and sub-Saharan Africa including Mauritius and Seychelles.Knowledge of staff. Manager run.
Exchange rate needs to be managed regarding stock-holding.
Marketing into sub-Saharan Africa - Mauritius, Seychelles, Ghana, Uganda are all potentially luctrative markets. Growth of SA sales force.
Normal economic conditions.
What is the reason for the sale?
Why is this a good business?
Profitable, uniqueness of brand, quality of brand, brilliant staff, manager run.
What is the price plus stock and the profit?
The asking price is R3.5 million plus stock of approximately R2.5 million = R6 million in total. The adjusted net profit is R3.144 million at December 2020.
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