Aluminium Window Manufacturer In Centurion For Sale

Business description

1. History Background
The business manufactures windows, doors and shop fronts out of
predominantly aluminium and glass and also fits at customers. The focus is on
the added value side of the business where architectural designs and rare sizes
are required.
Fully describe the business's activities
How long has the business been 21 years .
established
How long has the owner had the 6 years.
business
2. Present Market
It is a Monday to Friday operation and business hours are restricted to
between 07:30 and 16:30 daily and Fridays only up to 14:00. This changes
when the business gets busy. Increased sales and activity is managed by
adding overtime and casual labourers. The business is involved at many levels
of the construction process which includes architects and project engineers.
Since most of the products manufactured are tailored to requirements, the
production occurs according to specification and often involves physical
measurements carried out on site. Applications include high-tech domestic,
town house and small to medium sized construction projects.
How does the business operate on a
daily basis
The business has three major customers, one of which is a very large and well
known construction company. In addition to these they work for a wide variety
independent customers who come through referrals.
How are the clients attracted to the
business
Very little at all. The business has a low key web site which does not
contribute significantly to business generated. The business is also affiliated
with the official architects and aluminium regulatory forum in South Africa.
There is however no direct sales or advertising of any nature carried out.
What Advertising/Marketing is carried
out
No, but they are a preferred supplier to one major and two large construction
companies.
Does the business have any contract
work
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2. Present Market
There are over 100 companies operating in Gauteng alone. Most are small,
unreliable and low tech players. Three large companies enjoy a large share of
the available pie. The seller, together with a handful other competitors, offers
high quality and reliable service alternatives to the large players. It has
therefore a very large market segment to operate in.
What competition exists
The whole construction industry experiences a slow start to every year. This
activity builds over the year and peaks during from September up to the
middle of December when the annual summer holiday starts.
What are the seasonal trends
3. Financial
Is the business VAT Registered Yes.
Are there up-to-date Management Pending.
Accounts available
Financial statements for the financial year up to February 2010, also reflecting
the 2009 financial figures.
What Balance Sheet and Income
Statements are available
The business receives 60% of the value of the quotation on acceptance of the
quotation, a further 20% pre-installation and the last 20% on completion of
the project. All work is therefore cash positive, paid upfront and at a very low
risk of bad debt. The premium customer however enjoys 30 days from date of
statement payment terms.
What percentage of of the business is
cash/credit
Revenue decreased from R3,8m in the 2009 financial year to R2,95m in the
2010 financial year as a result of the recession. The profit fell from R50,000
per month to the current R33,000 per month as a result. This situation is only
starting to correct itself now. The business operates at optimum profitability at
around R300,000 turnover per month. The business can however handle up to
R700,000 turnover per month, but it is hard work which results in a lot of
overtime and other additional costs. Direct sales to pre-selected customers will
increase sales to the desired level, but the economy is expected to return to
the desired level soon.
How could the profitability of the
business be improved
4. Staffing
What is the total staff complement There are 5 persons employed by the business in addition to the two owners.
Give a breakdown of One glass cutter, aluminium cutter, one store man and two general workers.
staff/functions/length of service
Do any receive special perks or
incentives
Are they on contract Yes.
Do any have management potential No.
How involved is the Owner in running Both sellers are available on a daily basis and overlook all technical issues.
the business
5. Premises
When does the current lease end The lease is on an annual renewal basis.
Is there an option of renewal & what Every year for one additional year.
period
What is the annual escalation % 10%.
What is the square meterage of the 750m2.
business
6. Assets
Is a full asset list on file Pending.
Are any items not included in the sale One vehicle fully branded is on lease.
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6. Assets
What is their overall condition Very good and functional.
How have they been valued. Assets are reflected in the balance sheet at book value.
What are their settlement amounts Approximately R45,000.
Will Seller settle or Buyer to take over Optional if the seller wants it he needs to take it over.
Are they presently insured Yes.
7. S.W.O.T. Analysis
Very well established, three very valuable, long term and loyal customers.
Reasonable profit even during the harshest economic downturn. Good skills,
abilities and equipment to offer added value products to customers.
Strengths
The economy. The business has successfully scaled its activities and is still
Weaknesses making good profits. Many competitors closed shop during this period.
Pro-active one-on-one sales direct to customers could attract new customers.
Opportunities The time is good for this as a result of some players fading from the market.
Threats None. The business is sustaining itself and is very robust to meet challenges.
8. Reason For Sale
The seller is also involved in an import / distribution venture and wants to
What is the reason for the sale focus on this.
9. Conclusion
It has become a good brand over the years associated with its ability to
produce unique products against design specifications and consistent good
quality.
Why is this a good business
What is the price plus stock and the net R1,1m plus small stock amount of approximately R30,000

Other information

Furniture / Fixtures value:

R200,000 (included in the asking price)

Inventory / Stock value:

R30,000 (included in the asking price)