Kitchen Cupboards manufacturers long established and a unique business opportunity

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Asking Price

R24,250,000

Monthly Profit

R401,940

Asset Value

R 12,956,705

Stock Value

R 2,250,000

Yearly Net Profit

R 4,823,275

Summary

This business supplies kitchen cupboards and doors, manufactured as per the clients’ cutting list and specifications. Final assembly and fittings are handled by professional installers, ensuring that every project meets the highest standards. Cupboards and door suppliers are predominately for the kitchen industry but also for hotels, hospitals, offices, laboratories etc. The business does no assembly and placement of hinges or other accessories at all. The furnishings are completed on site by the fitter. All orders are accompanied by a cutting list and a comprehensive paper trail is maintained. They ensure high-quality cupboard and doors etc with a variety of patterns and colors, presses and wrapping machines. With over 23 years in the industry.

Give me more information

Fully describe the business's activities?

The business supplies kitchen cupboards and doors, manufactured as per the clients’ cutting list and specifications.
Final assembly and fittings are handled by professional installers, ensuring that every project meets the highest standards.
Cupboards and door suppliers are predominately for the kitchen industry but also for hotels, hospitals, offices, laboratories etc.
The business does no assembly and placement of hinges or other accessories at all. The furnishings are completed on site by the fitter.
All orders are accompanied by a cutting list and a comprehensive paper trail is maintained.
They ensure high-quality cupboards and door panels, with a variety of patterns and colors. They have all the required equipment, presses and wrapping machines. With over 23 years in the industry.

How long has the business been established?

Since 2000.

How long has the owner had the business?

Since Inception

What steps are in place to solve 'load shedding' problems?

The business has a 175 KVA diesel generator as part of the premises,
Sufficient to power the required equipment during power outages.
(Consumes approximately 20 Litres of diesel per hour).

How does the business operate on a daily basis?

The Owner is on site daily and plays the major operational role for the business
He has a staff of 14, inclusive of the admin assistant who has over 10 years service and manages the front office.
Due to changes in the staff structure the factory staff all report directly to the Owner currently
A factory supervisor may be appointed in the not too distant future.

How are the clients attracted to the business?

The business has been trading for over 23 years and as such they do work for most all of the kitchen fitters.
The Owner plays a very active role in keeping contact with his customer base and also interfaces with walk in and other clients on a daily basis.
A number of their major clients have been with them for over 20 years.
They also assist kitchen installers by helping to set up their respective showrooms.

Does the business have any contract work?

No signed or structured contracts, but they have repeat work from most of their customers.

What competition exists?

There is limited competition in the region as this business has the equipment and stock to ensure that all work is completed to spec and timeously.

What are the seasonal trends?

The business shows increased sale towards year end, and they close for the builders holidays.

Is the business VAT Registered?

Yes

What VAT documentation is on file?

All as and when required

Are there up-to-date Management Accounts available?

Yes

What percentage of the business is cash/credit?

The business receives deposits for all their orders.
They do run current accounts for most of their clients.
A large number of their clients are on a 30 day account basis, payable at month end.

How could the profitability of the business be improved?

There are opportunities within this industry should the new Owner wish to pursue them.

What is the total staff complement?

14 Excluding the two Owners

Give a breakdown of staff/ functions/ length of service?

1 x accounts and administrator
3 x supervisors
10 x general factory and machine opearators

Do any receive special perks or incentives?

As per the bargaining council requirements.

How involved is the Owner in running the business?

One Owner manages all the operational issues currently, although they may appoint a factory supervisor in the near future.
The second Owner handles the HR of the business as well as overseeing the administrative functions.

When does the current lease end?

The Seller is the building Owner and will grant a lease to the Buyer. To be negotiated

Is there an option of renewal & what period?

The lease will be 5 years with an option to renew for a further 5 years.

What is the annual escalation %?

Subject to negotiation

What are the trading hours?

Monday to Thursday: 07-00am to 5-30pm.
Fridays from 07-00am to 1.00pm for factory staff.

What is the square meters of the business?

The current space is around 1900square meters and the office space will be increased by around 300 square meters, making the total size around 2200 square meters.
The Owner has plans passed for further development of the premises with additional office space and floor space. Alterations are currently in progress.

Is a copy of the lease available?

A commercial lease will be issued to the Buyer.

What lease deposit and/or other surety is required?

This will be negotiated with the Buyer at time of purchase.

What are the main assets of the business?

The factory equipment is the largest asset component with top quality equipment, well maintained, and a new edge banding machine installed in 2025.
Secondly the value of the vehicles and a forklift and then the office equipment.
The software system is specialised and of top quality for their specific industry.

Are any items not included in the sale?

There are a few items on site that belong to the Owners, but these will be shown to a prospective Buyer when they view the business.

What is their overall condition?

All assets are kept in good working condition, from the machinery, vehicles, software and hardware.

Do any require repairing?

How have they been valued ?

Assets were valued by the owner and is based on a realistic second hand market value after allowing a fair discount.

Which assets are on lease/HP and with whom?

All assets are fully paid for.

Are they presently insured?

Yes, insurance is in place.

Strengths?

Long standing supplier to the industry for over 20 years.
Top quality and well maintained equipment
Niche market supplier of kitchen equipment and the main supplier within the region.
Two major local suppliers for approximately 80% of their work, and one international German supplier whom they have dealt with for many years and ensures a high quality of product.

Weaknesses?

As with many businesses of this nature, staff issues are a reality and need to be addressed as and when they occur.
There are no other significant weaknesses in this business.

Opportunities?

The opportunity for this business is to increase their footprint as they have additional capacity.
However, after over 23 years of successful trading, and since being the building owner, the Seller feels that he should look at other business interests that they have.

Threats?

There are no known threats to this business.
Staff issues do require attention at times.

What is the reason for the sale?

The Owners have managed the business successfully for around 25 years and they own the building.
They also have other business interests that are time absorbing.
As such they feel that it is the correct time to place the business on the market although they are not in a hurry to exit.
An extended hand over period will be offered if and when required.

Why is this a good business?

This is an excellent opportunity for an entrepreneurial buyer or for an existing company already in a similar industry, to acquire this business and gain substantial market share in the current region.
It is also very scalable and can increase production if incremental work is received.
Well run, excellent equipment, long standing customer base and very profitable.
Ideal add on business for an operation that is currently in the manufacturing or furniture business.