Sectors / Category

Annual turnover

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  • Mandate: 34880
  • Added: 12 Sep 2021
  • AFS
  • 174

An exceptional, well established and profitable butchery in Centurion

Gauteng, Pretoria
174
Mandate 34880
Added 12 Sep 2021
R 18,900,000* ZAR
Stock: R 2,500,000
Assets: R 6,324,341
R 463,866 ZAR
Ian Tennant
(PRINCIPAL)
Aldes Egoli
North West
North West
Summary

This well established, very profitable, 22 year old butchery is located in a standalone building in Centurion. It has a large database of loyal clients and has recently launched an online sales portal and delivery service.

SELLING PRICE AFS
R 18,900,000* ZAR
Stock: R2,500,000
Assets: R6,324,341
R 463,866 ZAR
Summary

This well established, very profitable, 22 year old butchery is located in a standalone building in Centurion. It has a large database of loyal clients and has recently launched an online sales portal and delivery service.

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Fully describe the business's activities?
This business is a butchery selling large amounts of fresh beef, lamb, pork chicken and smaller quantities of fish, turkey and ostrich. The majority of sales are from the various meats which have been processed into the various meat cuts boerewors etc Further processing of meat is also done at the premises like hams, salami’s, russians, cheese grillers and various other cold meats. Beef biltong, droewors, chilli and BBQ snap sticks, cabanossi, chicken biltong etc are also prepared instore for selling to customers.

How long has the business been established?
This butchery has been in existence with the current owners since 1 March 1999 (although the butchery did exist before). Growth in the market and sales has been consistent throughout the last 22 years.

How long has the owner had the business?
Since 1999

How does the business operate on a daily basis?
The business's trading hours are as follows: Monday to Friday 7H30 – 18H00 Saturday 7H30 – 16H00 Sunday 8H00 – 13H00 Public Holidays – 8H00 – 13H00 (If on Saturday open normal hours) New Years Day – Closed Good Friday – Closed Family Day – Closed Christmas Day – Closed Day of Good Will – Closed

How are the clients attracted to the business?
This butchery has a large, regular, and loyal client base who visit it as a destination shop for meat.

What Advertising/Marketing is carried out?
Advertising and marketing consist of monthly flyers delivered to homes Monthly sms sent directly to customers Postings on the butchery's Facebook page (free) Social media postings on Facebook groups in Centurion (free) Paid social media advertising on Facebook.

Does the business have any contract work?
No contracts exist to supply meat but there are a couple of businesses who buy for resale.

What competition exists?
There are supermarkets like Shoprite, Spar and smaller butcheries in the vicinity, however, the quality and service offered at this butchery is a major competitive advantage.

What are the seasonal trends?
The following seasonal trends exist and have been consistent over the past 22 years: - Easter Period – March/ April - Rugby Season – Increased sales in Biltong, Droewors etc - Game Meat Processing (May, June, July, August) – during the hunting season large quantities of game meat are processed into mostly biltong & droewors for customers. - December Christmas holidays and New Year – large increase in sales.

How did the Covid-19 pandemic impact the business turnover / daily operations?
Covid19 had very limited impact on the business. Growth was experienced during this time.

What steps / actions have been taken to combat the effect of Covid-19 pandemic?
Published and legislated protocols have been implemented and enforced

Is the business VAT Registered?
Yes

What VAT documentation is on file?
Yes, all the VAT returns are available

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

What Balance Sheet and Income Statements are available?
February 2021

What percentage of the business is cash/credit?
The business is approximately 98% cash (debit & credit cards, EFT payments). A couple of trusted clients e.g. schools and one or two businesses have a 7, 14 or 30 day account.

How could the profitability of the business be improved?
There is always scope to improve the efficiency in doing business and sourcing of products like packaging, cleaning materials etc. at cheaper prices (the challenge is at the same quality and standard).

Is Seller finance available and for what amount?
No

What is the total staff complement?
37

Are they on contract?
Yes

Do any have management potential?
A management structure is in place

When does the current lease end?
The property is owned by another entity that is owned by the same owners. Current lease expires 31 December 2024

Is there an option of renewal & what period?
Renewal is available for 5+ years

What is the annual escalation %?
The annual escalation is 7%.

What are the trading hours?
The business's trading hours are as follows: Monday to Friday 7H30 – 18H00 Saturday 7H30 – 16H00 Sunday 8H00 – 13H00 Public Holidays – 8H00 – 13H00 (If on Saturday open normal hours) New Years Day – Closed Good Friday – Closed Family Day – Closed Christmas Day – Closed Day of Good Will – Closed

Is a copy of the lease available?
Yes

Do you require a licence?
City of Tshwane requires an inspection of the premises after which a usage approval certificate as a food premise is issued, if successful.

Property description
The butchery consists of 2 levels: Ground floor – Retail Area, Cold room, Office, Toilets First Floor – Production Area, Large Cold room, Small Walk in Freezer, Large Walk in Freezer, Large Store, Biltong Drying Room, Toilets, Tea room etc.

What are the main assets of the business?
Fridges, cold room, freezers, retail display cabinets, butchery equipment etc. A full list of assets is available.

Are any items not included in the sale?
No

What is their overall condition?
Good

Do any require repairing?
No or minor repairs only

How have they been valued ?
Book value but replacement values can be obtained

Which assets are on lease/HP and with whom?
None

Are they presently insured?
Yes

Strengths?
Well established business with a high visibility presence and well known in the area. Very capable staff complement with a good balance between experienced and new employees. Large and accessible database of clients

Weaknesses?
Possibly not responsive enough to changing customer needs and trends

Opportunities?
- The online market is a growing market across all sectors in retail. The business has recently established an online sales platform in June 2021 and the reaction has been encouraging, including sales to new customers. - Marketing is mostly done towards the end of the month. Marketing can be increased to include mid-month and mid-week promotions. - Wholesale supply to other businesses for resale. This in includes fresh meat and dried meats like biltong, droewors etc - Establish other smaller satellite butcheries with limited staff and use the main butchery as a distribution centre to supply them (to ensure the standards and quality is maintained).

Threats?
A downturn in the economy

What is the reason for the sale?
The owners would like to scale down their activities which might include relocation.

Why is this a good business?
- The butchery is well established and has consistently shown incredible growth over the last 22 years. - There will always be a market for the fresh food industry irrespective of the economy. - Despite the pandemic of 2020, the butchery increased sales and profits for the year

What is the price plus stock and the profit?
Price R16,400,000 plus stock of approximately R2,500,000 The price is negotiable

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AGENCY DETAILS

Aldes Egoli

1 members
11 mandates
North West
42 Bass Cove The Coves Estate Hartbeespoort 0216

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