| | Haulage Contractor in the Air Freight Distribution Sector For Sale | | Seller ref: GP148
Advert ID: 870679 | | | Kent, United Kingdom | |  | | Financials | |  | | Asking price: | £440,000 | | Sales revenue: | £780,000 |
| | | | Business description | | Haulage Contractor Specializing Predominantly in the Air Freight Distribution Sector
Having been established for more than twenty years – and operated from its current site for the past nine – this business, located approximately halfway between the port of Dover and Heathrow airport and ideal for international freight companies to drop cargo for onward distribution, this business is a long established provider of specialist logistics and distribution services. It also offers more general road haulage services acting as a storage and distribution point for a number of businesses across a number of sectors, often providing added value services – re-palletising, for example.
Operating from leased premises of approximately 8,000 square feet with ample space for storage of Client goods when required, this business operates predominantly in the air freight ditribution sector with approximately 95% of its business activity concentrated through London Heathrow airport. As a result this business has all the necessary aviation security requirements and is a customer approved air freight depot. Collecting from and delivering to its customers during the day, the business consolidates its freight, ‘trunking’ up to Heathrow in the evenings. With a system of alerts in place sent to customers whenever there’s a vehicle with spare capacity in their area, vehicle utilisation rates are higher than average.
This business can boast a wide ranging customer base spread from Heathrow throughout Sussex, Kent and south Essex encompassing all areas in between – an overall base of approximately 1700 customers, a large proportion of which can be active at any one time. Customers include other freight operations with which it works very closely on a co-operative basis, freight forwarding companies, major ‘blue chips’ across a wide range of industrial and commercial sectors right through to SME’s and even private indivuiduals. It has an Operators Licence for 8 ridged vehicles with National HGV licences in place.
The cornerstone to the success of this business is the very high levels of customer service it provides. It realises the importance of planning, does exactly what it says it will do and never takes on a job it cannot complete on time, and having invested in technology throughout its many years of operation which enables it to keep track of progress of its customers’ cargo, always keeps the customer informed.
With turnover of approximately £780,000 for the financial year ending June 2008, generating gross margins of approximately 70% - figures likely to be repeated in the 2009 financial year, with earnings before tax and depreciation of approximately £80,000, this opportunity represents an excellent ‘bolt on’ acquisition for an existing freight operator to acquire a presence in air freight distribution or a new entrant into the sector to secure a well established, highly reputable and well known player in the industry.
Key strengths: .
Operating at the high value end of the market, this is one of a very few companies which is strong in air freight exports yet located off airport. Equidistant from Heathrow and the Kent coastal ports of Dover and Folkestone, it is however ideally located to service international haulage operations wishing to drop cargo for onward distribution. It has all the necessary aviation security requirements in place.
This business prides itself on providing cost effective, reliable and safe solutions to all of its customers’ transport and haulage requirements. This business recognises there is much more to transportation than just moving cargo. Focussing on the importance of planning and accurate information and by harnessing the latest available technology – trackers on vehicles and automated e-mails advising customers vehicles with spare capacity are operating in their area for example, this business consistently demonstrates to its customers it understands their businesses and the importance of responding to customer needs. Through its longstanding staff – someone is on call twenty four, seven it has the necessary expertise, skill and knowledge to deal with the nature and dynamics of air freight distribution. This combined with a highly personalized, friendly service enables this business to boast an extensive, loyal and regular customer base.
Key opportunities:
There is an outstanding opportunity to build on the existing services and customer base of this business. With a strong demand for its services combined with a capacity to increase turnover, a new owner contributing fresh ideas and investment in resources, particularly in the areas of sales and marketing will have every advantage of building on an excellent platform.
There is certainly scope to leverage the excellent reputation this business has within its sector for reliability to increase its trading base beyond its current customer list. Having not felt the need for advertising and marketing to date, targeted investment in this area would help increase its turnover and profitability. Further use of technology – with trackers on its vehicles generating automatic e-mails to its customer base to advise of vehicle capacity in their area will also significantly impact on turnover and profitability.
Similarly this business could increase awareness of the storage capacity it has – a vital asset for a business operating in this sector and located as it is close to one of Britain’s largest ports.
Customer service:
The business is a member of the Road Haulage Association and has reached accredited Investor in People status.
The fleet:
All either wholly owned or very close to finance having been paid off, the fleet comprises 2 x 18 Tonne Curtainsiders, one of which has a tail lift, 4 x 7.5 Tonne trucks – three of which are curtainsiders the other a box truck with tail lift, a 3.5 Tonne curtainsider, and four vans including a Mercedes Sprinter, two Iveco Dailys and a Transit Connect.
Financial information:
The business is offered for sale as a going concern. All financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.
Turnover for the financial year ending June 2008 was approximately £780,000 generating gross margins of approximately £560,000 and an adjusted pre-tax net operating profit slightly in excess of £40,000 with depreciation costs of £42,400.
The Asking Price of £440,000 is based on a sale of the assets and goodwill in the business with fixed assets conservatively valued at approximately £180,000. |
| | | General information | | | Employees: | The Owner is responsible for the day-to-day running of the business – supported by two others working in the Transport Office, a part time accounts/admin assistant and a part-time credit control assistant. There are a total of 11 drivers in all including a Driver/Supervisor and two ‘lead’ drivers – all directly employed and working across various shift patterns to maximize coverage and availability. |
| | | Property | | | Leasehold | | Lease terms: The premises are leased with approximately four years remaining on the current agreement. Rent is approximately £20,000 per annum with Rates of approximately £8,000 per annum. |
| | | Location | | This business operates from very well suited premises – two adjacent units totaling approximately 8,000 square feet including office accommodation and a mezzanine.
The premises are extremely secure – within a gated compound with more than sufficient space for its fleet of vehicles, with CCTV and Redcare alarm security in place.
The premises are located on a large business park close to the M2 and M20 motorways, and approximately halfway between Heathrow airport and Dover and Folkestone.
The premises are leased with approximately four years remaining on the current agreement. Rent is approximately £20,000 per annum with Rates of approximately £8,000 per annum. |
| | | Competition / Market | | | With the Owner having worked in the industry for many years and having built up extensive contacts within the industry this business has invested little in marketing and advertising recently, benefiting from high levels of residual awareness. All of its transport is liveried – acting as very effective advertising hoardings for the business.
It also utilises the CRM system, Act!, to very effectively manage its 1700 strong customer database and communicate vehicle availability. By far its most effective marketing, however, is the strong word of mouth recommendation and the high levels of repeat business the company achieves, testimony to the high levels of customer satisfaction the business generates.
The business has a very well designed and informative website that performs very well in all major search engines for all appropriate search terms. |
| | | Support & training | | | The current Owner will provide full business familiarisation, training and handover to ensure a smooth transfer of the business. |
| | | Reasons for selling | | | Having operated throughout as a sole trader and with no desire to become incorporated, the current Owner believes that new Owners operating as a limited company will be able to take the business on to the next stage and build on the excellent foundations already laid. |
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