Metal Fabrication Work Substantial Inventory Of Capital Equipment For Sale

Business description

Metal fabrication work with substantial inventory of capital equipment
Ref: 1254de

Headline summary


Midlands

Metal fabrication work in steel and aluminium with food industry expertise and substantial inventory of capital equipment

• established 45 years
• turnover £484,808 (2011)
• ebitda averaging £107,250 per annum over the last 4 years
• freehold £1,300,000
• reference: 1254de

Business summary

This consistently successful company
has developed an excellent reputation for the fabrication of a wide range of metal items. Typically these will include products completed to customer specification in various grades of steel and aluminum, and work often involves the production of dies and press tools. The business also offers a design and consultancy service when required. Customers operate within a variety of industries including railways, automotive industries, stainless steel trays for cooking on an industrial scale, shop fittings, roll containers, point of sale display racks, electrical cabinets, stainless steel wash tanks etc.

Trading from spacious freehold factory and office premises located on an industrial estate in Ilkeston, Derbyshire, customers are generally drawn from the Midlands, although a number are distributed more widely within the UK, particularly in London. In addition, some production is exported each year. The premises afford both secure storage for valuable equipment and stock, and a pleasant working environment for staff. There is a substantial quantity of large capital equipment items included within the consideration price.

Our client has enjoyed a successful trading history spanning the last 45 years. During this period, the business has generated very significant and consistent profits. The customer base is extremely well spread and cash flow generally positive. In financial terms the company is solid, with a consistently high EBITDA figure averaging £107,250 per annum over the last 4 years, ensuring the prospect of excellent ongoing earnings for a new buyer. Overall gross profit margin is currently 26% and the adjusted EBITDA margin 18%. Costs are extremely well contained, with low overheads.

Over the last 10 years in particular the company has both consolidated its position within the market place and developed a number of new customers. Overall, the market for metal fabrication remains strong and likely to expand with potential customers being drawn from a wide range of industries.

The company would be an ideal purchase for a similarly sized or larger corporate with a good knowledge of the metal fabrication industry and with an acquisitive growth strategy. Such a move would give access to a company with solid financials and a reliable staff complement. Alternatively, this excellent freehold business could be of interest to a larger corporate seeking an in house manufacturing capability within the Midlands.

SCOPE AND POTENTIAL

The business occupies an ideal central location within the UK. As such, it is superbly positioned to exploit opportunities arising. Ilkeston, and its hinterland, has been associated historically with engineering, particularly the railway industry in Derby. There are a significant number of companies within the wider Midlands area where potential business opportunities exist. As well as exploring options with these potential clients, a buyer could also focus carefully on existing relationships and proactively market to the 60 or so customers on the books for whom no work has been undertaken in the last year. There are also possibilities for sub contract work, particularly with larger companies contracting directly with Railtrack. Business development activity at present is extremely limited with the company run at a pace to suit the lifestyle of the vendor. A buyer could focus on the significant underutilized capacity within the factory. Part of the factory is currently sub let and could be utilized for further production if required.

Currently there is no operational website although the vendors have retained the appropriate domain name. It is felt that work in this area particularly could generate additional enquiries.

A buyer could also consider the benefits of vertical integration and a UK or internationally based business could easily bolt this operation onto an existing set up. This would give the potential advantage of an in house production facility with security of supply.



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Property information

Property:

Freehold

Other information

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