Plastic Pipework Systems Supplier To UK Construction Market For Sale

Business description

Plastic Pipework Systems Supplier to the UK Construction, Drainage & Civil Engineering Markets

This highly reputable business, set up the by the vendors some 13 years ago, specialises in the supply and delivery of plastic pipework systems. The owners have developed the business in such a way that it is now firmly established as a key player in the markets it serves, providing a dedicated approach to the supply of products for the construction, civil engineering, drainage and agricultural industries. The skills and experience of the management team and their extensive supply network enables the company to offer one of the most comprehensive and diverse ranges of plastic products in the industry from a strategically placed facility, situated close to the north west motorway network. The business offers nationwide coverage and can respond to the most demanding of schedules and specifications within hours as it has its own designated storage and transport facility.

The company is fully committed to ongoing development and growth through a substantial programme of capital investment and will continue to offer the most advanced and diverse range of products to the industry, manufactured to the highest standards and certified to BSI, BBA and WIS standards. The company has a very broad range of products be it ducting, access chambers, drainage pipe and systems, septic tanks, clayware and accessories all carried in stock.
The business boasts some 400 regular customers, many of whom are large blue chip organisations and public sector bodies as well as a similar number of companies who use the company’s services on a more ad-hoc basis.
This business sale represents a significant investment opportunity to a new owner in a vast and growing market sector.

Customer Service:

The business prides itself on the levels of customer service it provides. It is for these reasons that it enjoys very longstanding and fruitful relationships with both its customers and suppliers. This is backed up by the fact all the products the business supplies meet the relevant standards and are truly fit for purpose. Staff have very good levels of technical knowledge which ensures customers receive the correct products to meet each projects requirements. This together with very good stock levels held means that the business can react quickly which ensures ongoing business levels.

Key Opportunities:

There are many opportunities open to a new owner. The vendors believe a new depot in another geographical region would certainly increase future sales and revenues and are currently looking at this scenario. Initial findings support this theory. Ongoing development of the company’s database would also reap future rewards as would the opening of a trade counter, not to mention the implementation of a strategic sales and marketing campaign for increased brand/product awareness.
Key Strengths:

• Profitability
• Speed of response
• Range of quality products in stock
• Market knowledge
• Unpatented technical knowledge
• Quality of materials
• Customer base
• Price competitive
• Low overheads
• Supplier relationships
• Growth

Financial Information:

The business is being offered for sale on a going concern basis, all financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.

The business consistently achieves turnover circa £3 Million per annum with an impressive gross profit margin in the region of 30%. The business has enjoyed excellent profitability to date. Current profits available to the directors are currently in excess of circa £300,000 and have been considerably higher in previous years prior to the current economic downturn. The business has relatively low overheads and a highly impressive blue chip customer base that serves various key and significant market sectors.. The scope for future growth is huge as to date the business only operates from one site in the North West. In saying that the vendors are currently looking to open a new site in a new region which should further increase sales revenues.

Property information

Property:

Leasehold

Lease terms:

The current lease is a 10 year one with a 2 year break clause. Rent is circa £25,000 p.a.

There is also a small industrial unit, rental £12,000 per annum.

Location:

The business operates from a leasehold site on a well known industrial estate that is highly accessible and near to the major motorway network. The yard is circa 1 acre and has large undercover storage areas. It is fully fenced, gated and very secure. The site is alarmed and there is CCTV on the estate. The offices are situated within portacabin structures (circa 1,000 square feet in total) and comprises main office, meeting room, accounts office, transport office, canteen and toilets. The current lease is a 10 year one with a 2 year break clause. Rent is circa £25,000 p.a.

There is also a small industrial unit, rental £12,000 per annum.

Business Operation

Expansion potential:

This business operates within a field with ongoing demand anticipated for the growth in the short/medium and long term. It is currently servicing a very small part of this market both in terms of share, customer base and geographical spread. It currently does no proactive advertising or marketing, preferring to rely on word of mouth recommendations and referrals to generate new business. Future growth is inevitable. It is understood a new owner with new levels of energy, investment in resource and marketing could significantly increase the levels of business within a short period of time. Alternatively such are the relationships already in place that the business would expect to continue trading successfully at its current levels if a new owner so required such is the size and quality of its current customer base.

Competition / Market:

The business currently undertakes no conventional advertising or marketing campaigns such is its position in the market, preferring to rely on word of mouth recommendations, repeat business and referrals to generate sales. It does however have a highly informative website and company brochures.

Reasons for selling:

The vendors are planning their exit strategy.

Trading hours:

Monday –Friday 0800-1700

Employees:

The two directors work within the business on a full time basis. However they have built a good team of people who can run the day to day operation of the business efficiently and effectively. The business employs an office manager, a fleet manager/stock controller, an accounts person/bookkeeper, an internal salesman/IT manager as well as 4 warehouse/yard operatives and 4 drivers all on a full time basis. In addition to this there is 1 further part time accounts assistant, a part time external salesman (commission only) and a cleaner. Staff are a real asset of the business with many able to multi-task if required.

Other information

Support & training:

The current owners would be happy to provide full training and support at handover. One of the directors would also be prepared to stay on as a consultant for an agreed period thereafter subject to separate negotiation.