Fully describe the business's activities?
Specialised trucking Co - country-wide. Unique fleet configuration (with over 30 truck/trailers) and comprehensive service profile allows for a wide variety of clients. Currently over 1 500 clients (none > 10% of the approx R35m turnover & top 30 contribute 44%). Over 50 staff (incl mechanics) operate from 3 rented properties in KZN & Gauteng. A new owner would need to take over from the Seller as CEO or employ such. Below him are an admin/fin manager & dispatch/HR manager
How long has the business been established?
10 Â½ years with the current owner and 3 years before that.
How does the business operate on a daily basis?
Clients that they have had a long standing relationship with, as well as, new clients referred through word of mouth or the website, obtain quotes & then finalise arrangements for transport services around the country. Vehicles/trailers not covered by maintenance contracts are serviced/repaired at the three properties by the mechanics.
What competition exists?
This is a relatively specialized service, with a few larger & smaller players all sharing the market. This Co has grown dramatically (7 times its size in 10 years), with sufficient critical mass that the R6m COVID drop was completely recouped this year to achieve pre-COVID turnovers of some R35m.
What are the seasonal trends?
The busiest periods are those around a month before the holiday periods, but no month exceeds another (in general) by more than 15%.
Is the business VAT Registered?
Yes with full records available
Are there up-to-date Management Accounts available?
Yes, produced monthly in arears and quite detailed, with no personal expenses therein, all produced by the owner who can easily explain such.
What Balance Sheet and Income Statements are available?
At a minimum, the last three years -detailed with no personal expenses therein. Due to vendor numbers & past relationships, the purchase of the shares will be the probable route, The Sale Price is for the business as a going concern, with the Current Assets & Liabilities due before the Effective Date being to the benefit/responsibility of the seller, while all assets/liabilities after the Effective Date are to the benefit/responsibility of the purchaser. This Report is based on 2020 AFS (R35m turnover), with the 2022 results looking to be very similar thereto, after a R29m turnover COVID 2021 outcome. The full-detailed array of expenses are covered within the AFS, MA's & this Report, inclusive of the vehicle repayments (which are financed over 5 years at approx. R10m in total at any one stage, or R2.5m pa; normally with deposits thereon being obtained through old unit sales), thus the declared NP is Discretionary Income of the Owner after all expenses (but before his decision on benefits vs Co stated profit, for tax efficiency). Off a turnover of R35m the Discretionally Income/NP is some R5.9m pa
What is the age analysis of the debtors book?
The majority of clients pay by eft within 30-40 days, with the book being some R2.5-3m, of which 73% is current, 18% 30 days, & 9% 60 days.
What is the total staff complement?
Over 50 staff (incl admin, drivers, mechanics, etc) operate from 3 rented properties. A new owner would need to take over from the Seller as CEO or employ such. Below him are an admin/fin manager & dispatch/HR manager. Should the purchaser not wish to owner operate, then the option is there to move the main aspects of the owner to the 2IC with a R120 000 pa increase, and employ a lower level manager to take over his lower tasks at some R300 000 pa.
Three well positioned premises around KNZ/Gauteng, consist of undercover offices/workshops of Â± 400 m2, with Â± 6000 m2 open yard, at a total of R 130 000 pm. Long term leases are available to the purchaser, with 6-7% escalation clauses
What are the main assets of the business?
Over 30 trucks/trailers (2010 - 2020) of various sizes to effectively handle the various market opportunities, supported by other equipment, including approx. 20 computers, 40 cells, 16 desks etc. There is a full list hereof, with all being in working order, having cost some R25m & valued at around R15m 2nd hand in this Report. The long term debt is around R10m, which is within an even spread within the 5 year cycle. Repayments are some R2.5m pa & are covered within the AFS, Ma's & this report as an expense (before the NP is calculated).
Existing customer base, with a large portion of clients > 10 years .Large fleet of vehicles specifically procured â fit-for-purpose. Fleet is well maintained. Well-established national footprint, with subcontractors in most major towns. Well trained staff, capable of operating autonomously without constant guidance. Most of the critical trucks are newish & covered by warrantees & maintenance plans. Excellent supplier network in place
Some fleet vehicles are relatively old & as per normal will need replacement No contracts, but successful long term relationships.
â¢ Expand to depots in CT & BFT â¢ Bigger footprint/visibility â exponential growth is available â¢ Sub-let storage facilities in JHB â¢ Significant savings if purchased by another transporter by obtaining client cross-pollination & economies of scale
Constant increases in operating costs - which all businesses have to deal with & clients need to eventually pay for Economy - yet this business has grown through the years
What is the reason for the sale?
Owner wishes to break free after 10 years from this venture that was thrust on him & return to his more inventive mind/engineering space.
What is the price plus stock and the profit?
The Sale Price is R13.8m off a turnover of R35m & a Discretionally Income/NP of some R5.9m pa
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Annual Turnover Amount between R 500 thousand and R 6 million