Sectors / Category

Annual turnover

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  • Mandate: 34797
  • Added: 26 Jul 2021
  • AFS
  • 432

Well established profitable brake bonding, relining and skimming business

Gauteng, Other
432
Mandate 34797
Added 26 Jul 2021
R 2,600,000* ZAR
Stock: R 200,000
Assets: R 807,750
R 79,848 ZAR
Wynand Wolmarans
(PRINCIPAL)
Aldes Exceed
Gauteng, Sandton
Gauteng, Sandton
Summary

This well established business on the East Rand, specialises in brake bonding, relining, skimming and related services.

SELLING PRICE AFS
R 2,600,000* ZAR
Stock: R200,000
Assets: R807,750
R 79,848 ZAR
Summary

This well established business on the East Rand, specialises in brake bonding, relining, skimming and related services.

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Fully describe the business's activities?
Long-established business supplying the following services to fleet owners running their own workshops: - Relining of brake shoes; - Bonding of brake shoes; - Skimming of brake-drums or discs; and - Skimming of flywheels.

How long has the business been established?
The business has been established 37 years with long and respected history of servicing both the medium and heavy commercial vehicle markets.

How long has the owner had the business?
The current owner bought the business from her employer in 2006 following his retirement.

How does the business operate on a daily basis?
The business sources quality products from leading original equipment manufacturer via local suppliers. Drivers collect components from customers. The workshop will then repair or replace these components. Drivers deliver the repaired and/or replaced components back to customers who generally does their own fitment to their own vehicles. The business predominantly supplies customers with their own workshops in the mining, transport and related industries

How are the clients attracted to the business?
The existing strong customer base has been built up over the last 37 years as a direct result of the business's enviable reputation in the market for: - good service; - quality products; - competitive pricing; and - business integrity. New customer are predominantly attracted through word-of-mouth.

What Advertising/Marketing is carried out?
The business is well established and does not currently engage in any marketing and advertising other the the website and word-of-mouth.

Does the business have any contract work?
Their are no formal contracts in place, however there are "lifelong" relationships in place with all customers.

What competition exists?
As with any supplier in the automotive industry, competition is fierce. However, the business differentiates itself with SABS imported products, hands-on approach and unique workshop processes that saves customers time and money.

What are the seasonal trends?
Generally, December and January are lower sales months. The wheels of transport turn 24 hours a day 7 days a week due to the lack of rail infrastructure in South Africa. However in the last 18 months the Covid-19 and its impact on the general economy, the international manufacturing and inbound logistic supply chains impacted negatively on the monthly trading activities.

How did the Covid-19 pandemic impact the business turnover / daily operations?
The business was closed during April 2020. Brakes is a safety critical item on every commercial vehicle/truck. The business is an essential service provider to the mining, transport and related industries, fortunately business continued throughout the remainder of the Covid-19 period albeit it at a lower trading levels. The biggest impact that Covid-19 had on the business was the importing of products by suppliers.

What steps / actions have been taken to combat the effect of Covid-19 pandemic?
The business obtained its essential service status, implemented all Covid-19 safety protocols, increased stock holding and stepped-up up their customer service levels.

Is the business VAT Registered?
Yes.

What VAT documentation is on file?
All VAT documentation is on file in the Seller's office.

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

What Balance Sheet and Income Statements are available?
2019 & 2020 Balance sheet and income statements are on file and will be made available to serious Buyers. Sage one income statements are on file for 2021 and 2022 and will be made available to serious Buyers.

What percentage of the business is cash/credit?
Approximately 92% - 94% of the business is on credit.

What is the age analysis of the debtors book?
Average debtors days outstanding is less than 30 days.

How could the profitability of the business be improved?
The profitability of the business can be improved by appointing sales reps to acquire new customers and by diversifying the product range to include brake pads, clutches, clutch kits, brake caliper and air-brake components. Appointing a mechanic and increasing the service offering to include: - Installation and fitment of parts; - Re-manufacturing of brake calipers, clutches and air-valves; - Light commercial and passenger vehicles; and - 24 Hour brake down service, Investing in mobile brake skimming equipment and offering on-board skimming of disc brakes to passenger and LCV workshops. Investing in mobile truck wheel alignment equipment and offering on-site truck wheel alignment to existing customer base.

Is Seller finance available and for what amount?
No.

What is the total staff complement?
2 Directors (owners). 1 Office assistant. 4 Workshop staff. 2 Drivers.

Do any have management potential?
No.

How involved is the Owner in running the business?
Currently, the owner is very hands-on and 100% involved in the day to day running of the business. The owner's main responsibilities include: - Customer relationship management; - Ensuring customer satisfaction; - Ensuring prompt and proper query resolution; - Customer negotiations caused by competitor interference. The business can easily be manager run and was previously manager run.

When does the current lease end?
The current lease expired 31 August 2020 and is currently running on a month-to-month basis.

Is there an option of renewal & what period?
The current lease had a 1 year renewal option.

What is the annual escalation %?
The landlord has not applied any escalation increases on 1 September 2020 and 2021.

What are the trading hours?
Trading hours are Monday to Friday 7H30 - 17H00,

What is the square meters of the business?
The premises measure approximately 400 square meters and consist of: - Workshop; - Reception/admin area; - Director's office; - 2 x toilets; - Kitchenette. - Staff ablution facilities; - staff "canteen area"

Is a copy of the lease available?
Yes, a copy of the signed lease is available at te Seller's office and will be made available to serious buyers.

Do you require a licence?
There are no specific license requirements.

What lease deposit and/or other surety is required?
A lease deposit of one month is required.

What are the main assets of the business?
Main assets include: air riviter, heavy duty radius grinders, vertical drum lathes, surface grinder, brake-shoe oven, dust controller, sandblaster, 2 post workshop lift, hydraulic jack and general workshop equipment. Other fixed assets the following categories: - Office equipment; - Furniture & fittings; - Shelving in the parts store; - 2 delivery vehicles; and - Workshop tools and equipment. A complete asset list is available on file and will be made available to serious Buyers.

Are any items not included in the sale?
No, all assets are included in the sale of the business.

What is their overall condition?
All assets are in good working condition with fair wear & tear relative to the age and application of the individual assets.

Do any require repairing?
No, all assets are in good working order. The two post lift must be re-commissioned in order to expand the service offering to include fitment of parts to passenger and light commercial vehicles.

How have they been valued ?
Yes, by the owner.

Which assets are on lease/HP and with whom?
All assets are fully paid for and the Seller is the legal owner of all assets listed in the fixed asset register. The 2 delivery vehicles are registered in the shareholder's personal name.

Are they presently insured?
Yes, all assets are presently insured.

Strengths?
- Long standing business with an enviable reputation in the market for good service, quality products, competitive pricing and business integrity. - Strong customer base with "lifelong" relationships. - Experienced and knowledgeable staff. - Only supplier of its kind in Wadeville. - All suppliers are within a 20km radius of the business premises. - Small staff compliment. - Unique processes in their workshop which saves customers time and money. - Competitive rental. - Low overheads.

Weaknesses?
- No exclusive supply agreements in place with any customers. - There are many competitors in the market. - Cheap aftermarket products available for import by competitors that is not SABS approved. - No real marketing and advertising.

Opportunities?
- Appointment of sales reps to acquire new customers. - Diversification of products offered to include everything on clutch, air- and brake systems. - Expand the service offering to include fitment on all vehicles supported by a 24H brake-down assistance. - Mobile on-board brake skimming service to the light commercial- and passenger vehicle market. - Mobile on-site wheel alignment service to the existing customer base.

Threats?
- Reasonably low barrier to entry for new entrants into the market. - Continued lowdown of the economy as a result of the Covid-19 pandemic. - Impact of Covid-19 on the international inbound supply chain of stock. - Political instability in South Africa.

What is the reason for the sale?
The owner want;s to scale down and retire to the garden route.

Why is this a good business?
This is a well established unique easy to run business with: - good returns; - a small staff compliment; - lifelong customer base, which can easily be grown into it's next "s" curve.

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AGENCY DETAILS

Aldes Exceed

1 members
5 mandates
Gauteng , Sandton
53 Park Drive, Mulbarton Ext.3, Johannesburg, 2059
Sandton

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