Fully describe the business's activities?
Factory that manufactures Ice cubes & blocks at some 30% to 100% of capacity from its quietest to busiest (Xmas)periods. Products are manufactured from tap water that has gone through an on-site purification process, through the large 3 cube makers & blast freezer (blocks) into the cold storerooms (4), before being dispatched via the Co's insulated boxed trucks (3), to the 80 odd clients / intermediaries' sale shops/points, some of which have the approx. 50 Co. freezers for storing the ice.
How long has the business been established?
more than 20 yrs with the last 12 being with the seller
How does the business operate on a daily basis?
The owner or staff will open/ close. Orders are received & generally distributed on an area roster route, at which time clients (indiv shops no bulk depot drops) on such routes are checked/ restocked. Clients pay be eft or cash, with delivery notes/ receipts produced, in order to on a daily/ monthly basis, track sales/ monies. Breakages/ returns are collected/ credited. The small amount of general maintenance required is continuous through staff, while major repairs might be outsourced if necessary (eg compressors/ condensers every 10-15 years)
How are the clients attracted to the business?
No client contributes more than 10% to turnover & the Corporate clients together are less than 20%. The main corporate with some 6 mega stores has a service agreement that have been in place for the stores between 5-10 yrs & would be expected to be renewed. A preferred supplier status exists with another corporate that involves a number of sales points. The middle/ smaller clients only sign an agreement if they want a Co. freezer on site, which is only to be used for the Co's ice & needs to always be full. Due to the proceeding & 3 assets on finance - the suggestion is that a purchaser would purchase the membership of the CC, but the Agreements seem to be easily transferable should the Purchaser wish to put the business into a new PTY. New clients have not been approached of late & a marketing/ business development drive, inclusive of website enhancement would surely grow the business.
What competition exists?
4 medium sized players & many small here today - gone tomorrow players
What are the seasonal trends?
Busiest: Dec, followed by other holiday periods & large events Quietest : none of the above in winter
How did the Covid-19 pandemic impact the business turnover / daily operations?
Covid affected events & thereby some R1m of sales ( ie R5.5m down to R4.5m in sales), which should return once events are allowed again
Is the business VAT Registered?
Yes - with all info available & up to date
Are there up-to-date Management Accounts available?
Management accounts will show the varying monthlyinformation etc vs this Report which is based on the AFS and thus has averaged figures. MA's are produced monthly in arrears, from Invoices/ eft's & cash receipts (completed/ rec'd by drivers)
What Balance Sheet and Income Statements are available?
Past AFS are available with latest being 2021 which were used for this Report. A turnover of some R4.5m as at Feb 2021, followed on from the previous R5.6m, R4.4m, and R3.7m; with the present year looking to repeat the 2021 R4.5m results; followed by growth back to the previous R5.6m, once events etc are again allowed. NP's have also grown annually (except for COVID), to reach an Owners Discretionary Income for Feb 2021 of some R940 000, which with a fully committed owner-operator, rather than the present mainly absent owner, would mean a salary saving taking the earnings to some R1.2m pa
What percentage of the business is cash/credit?
20% is cash vs the rest by eft to a max of 45 days but most by 30 days
What is the total staff complement?
10 staff consisting of 2 managers & 8 drivers/workers A full-time owner operator with an outsourced maintenance/ repair allowance would save R260 000 pa on the salary bill Staff work according to peak/low periods, but generally : M-F: whole day and S/S : half-day
The premises are well placed for alternate access to arterial roads for deliver around the Greater Durban, within a complex, in an Industrial area. The property is functional at some 200m2 & available to rent at at some R12 000 pm or to purchase at some R1.25m.
What are the main assets of the business?
The main assets which are all in working condition & under utilized except for absolute peak season, consist of : 3x ice cube makers (1 being paid off within the expenses of this report before declared NP ); 1 x blast freezer room for ice block making; 3 cold rooms; 50 sales point freezers; 3 x delivery vehicles with insulated back boxes (2 being paid off within the expenses of this report before declared NP); 1 x sales rep vehicle; water purification & jojo equipment; office equipment. 2nd hand replacement cost would be some R800 000 (excl fitting), but having cost some R2m. The owners private vehicle is not included.
20 yrs of success, trusted & known in the market place proven production, delivery, sales processes continual growth except for hard-lockdown COVID periods (specifically as no events)
The present owner is only involved some 3 hrs a day There are & will always be competitors
A new owner being fully involved, could save staff costs & probably also increase sales Conduct business development activities which are not happening Improve the basic website
Other competitors - existing 4 or the fly-by-nights
What is the reason for the sale?
What is the price plus stock and the profit?
The Sale Price is R2.65m, with a Net Profit of some R940 000 pa (off a turnover of some R4.5m). The NP could be increased by an owner operator being fully involved vs the present slightly involved owner, thereby reducing staff/costs, while improving the NP to some R1.2m; which will further improve post-COVID & with the return of events, thereby re-establishing the past 2020 R5.6m turnover figures.
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