Asking price: £70,000

Sales revenue: £180,000

Net profit: Undisclosed

Fixtures value: Undisclosed

Stock value: Undisclosed

Business description
Collection and Recycling of WEEE –unwanted and surplus IT, Telecoms and Electrical equipment

This business was established in 2008 – although its roots date as far back as 2005 when the current Owner of the business, then involved in an IT services and support company identified an on-going demand from customers looking for help to dispose of their unwanted IT and telecoms equipment. Initially offering a brokerage only service – the resale of unwanted, redundant or surplus equipment, this service was formalised in the setting up of this company which has rapidly grown to become one of the leading forerunners in the environmentally friendly disposal of IT, telecommunications and electrical equipment. Operating primarily within the B2B sector, for any company looking to dispose of printers, PC’s, mobile telephones, keyboards – even monitors, televisions, videos players/recorders – this is the business to contact.

This business works not only to the letter, but also within the spirit of the Waste Electrical and Electronic Equipment (WEEE) directive, legislation introduced throughout the European Union with the single aim of reducing the amount of electronic waste that ends up in landfill sites. Collecting WEEE from its customers’ sites for processing, the business has developed four major revenue streams – a fee for the original collection; the resale of IT and telecoms equipment to customers looking to purchase previously owned equipment; the sale of refurbished or Original Purpose Reuse (OPR) of IT and telecoms equipment and the data wiping of hard disk drives to permanently remove information that may have not been effectively wiped by the original owner.

Providing a UK-wide service but operating primarily within the southern Home Counties in which its Head Office, an Authorised Treatment Facility (ATF) is based, the cornerstone to the success of this business is its absolute commitment to compliance, social responsibility and secure IT recycling. It has developed one of the best technology collection and recycling services in the business with stringent procedures in place to ensure Client compliance to all appropriate legislation such as the WEEE directive, the Hazardous Waste regulations and of course, the Data Protection Act. It has adopted the best available recycling techniques including a Zero Export Policy and has in place carefully developed recycling strategies enabling it to maintain re-use levels of around 98%. And by processing every hard disk drive collected using leading data wiping software capable of erasure levels approved to MoD, HM Government and CESG/SEAP standards, it ensures none of its customers’ sensitive data can fall into the wrong hands.

This is a fledgling business fast establishing an excellent reputation within the rapidly growing electrical recycling industry. With turnover for the current year of approximately £180,000 – set to grow exponentially with the right kind of inputs from a new owner, this business represents an ideal opportunity for a purchaser – possibly already operating within the IT or waste sectors, to acquire an ideal vehicle with all the systems and processes in place to take maximum advantage of future growth.

Key strengths:

This business is operating within a huge marketplace – it is estimated that in the UK alone, there is approximately 1.2 million tonnes of e-waste produced each year. It is also a marketplace which is subject to a stringent legislative framework and an area that is under constant attention from both UK and EU Government departments. The service offered by this business is one that all UK businesses will need to use in order to comply with legislation. Furthermore, legislation in the area of electrical recycling will continue to tighten – as a result of an increasing determination not only to reduce the volume of electrical waste being sent to landfill but also in relation to the contents of this waste – the plastics and the toxic metals frequently used in the manufacture of IT and telecoms equipment. This, together with the huge propensity of consumers to continually upgrade and swap out electrical equipment as new models are introduced and technology develops, will ensure a constant stream of work for this business for many years to come. With a very strong, loyal customer base and an excellent team, this business is ideally placed to take full advantage of these market developments as they occur.

In just the relatively short period of time during which it has been operating, this business has established a good customer base, an excellent team and an excellent reputation throughout the electrical equipment recycling industry for its legal compliance, social responsibility and secure recycling strategies..

The business benefits from very low overheads – and a variety of revenue streams, ensuring the business is not dependant upon any particular one, enjoying revenues from collections, re-sales – e-bay is a particularly effective resale channel and brokerage sales – either from the yield from WEEE when processed, the yield from scrap cable and metal, sales of inkjet and laser cartridges removed from printers and sales of items directly to brokers. Using all available options including component separation and base metals recycling the business consistently achieves recycling levels of around 98%.

Key opportunities:

With its systems and processes in place this will be a very successful and profitable business over the next few years simply by taking advantage of the awareness it has built up in its catchment area regarding the service the business offers, by exploiting its existing customer base and converting opportunities that will undoubtedly appear therein. With its limited sales and marketing resources but with very strong technical abilities it is a perfect fit for a similar business looking to acquire a southern base or additional capacity in the geographical area in which it operates, a waste company wishing to establish a foothold in the WEEE stream or even an IT company looking to expand its portfolio of services.

Like many fledgling companies however, this business has had limited access to working capital. With a strong demand for this business’s services there is an outstanding opportunity to build on the existing business levels and customer base of this company, particularly with a new owner contributing fresh ideas, motivation and enthusiasm but above all additional resources. Certainly an investment in sales and marketing would enable this business to engage with larger corporates – blue chip Clients and especially those that have a faster technology churn – Investment Banks for example.

There is also the possibility of upgrading this business’s status – currently it is an Authorised Treatment Facility (ATF) – by securing a full Waste Management Licence so that items it currently collects could be dismantled and separated for their base materials – namely plastics and metals on site. This is work which has currently to be outsourced and represents significant .lost revenue. By investing in the technology required to enable the mechanical separation and granulation of base materials this business would also be able to take on materials from manufacturers which would also have a significant impact on turnover and profitability.

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.

Projected turnover for the financial year ending September 2009 is approximately £180,000 generating gross margins of approximately 67% and a pre-tax net operating profit of approximately £35,000.

The Asking Price of £70,000 is for a sale of the shares in the business based on a flat Balance Sheet.

Years established: 2008

Employees: The owner is responsible for the day-to-day running of the business supported by an Operations Manager and a Warehouse Manager/Brokerage Assistant.

Property: Leasehold

Lease terms
Approximately 2,000 square feet in all – including office accommodation and a workshop but with the vast majority of space dedicated to storage, the Rent is £12,000 and Rates are £6,000.

Location
The business operates from very well suited leased premises ideally located on a very attractive, small industrial estate comprising converted farm buildings and modern units offering easy access to this business’s customer base via excellent road links.

Approximately 2,000 square feet in all – including office accommodation and a workshop but with the vast majority of space dedicated to storage, the Rent is £12,000 and Rates are £6,000.

There is ample space for parking, loading and unloading.

Competition / Market
To build the business to its current level the business has invested very effectively in marketing and advertising. The business is listed as an approved recycler under Hampshire Sustainable Business Partnership, West Sussex Sustainable Business partnership and Hampshire County Council. The business also undertakes local leaflet drops and has been testing some promotional initiatives – free WEEE collection, for example and has built up a number of strategic partners to develop WEEE flows into the business. The business has a very well designed, informative and easy to navigate website which would benefit from a small investment in search engine optimisation techniques and is also listed on an IT Professionals website. The business benefits most however from the most cost effective form of marketing of all – strong word of mouth recommendation, testimony to the excellent reputation the business has built up within the WEEE recycling industry.

Support & training
The current Owner of the business will provide full handover and training as required to ensure a smooth transfer of the business and to assist new Owners to fulfil the full potential that this opportunity truly offers.

Reasons for selling
Having put all of the appropriate systems and processes in place, the current Owner, suffering from a long term injury, feels the time is right to pass the business on to new Owners with access to the right resources, to build on the excellent foundations already laid and to take this business on to the next level.