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LocationSouth Africa, KwaZulu-Natal

Sector - Manufacturing

Asking Price
R6,600,000
Monthly Profit
R 186,002
Asset Value
R 3,000,000
Stock Value
R 20,000
Yearly Net Profit
R 2,232,018

Summary

Good clients & long established textile industry supplier focusing on material printing, embroidery, heat pressing sublimation & sticker services.

Give me more information

Fully describe the business's activities?

Literally NOT affected by COVID !
Textile printing (screen, rotary & pad), heat pressing, sublimation, embroidery & sticker, service supplier to the clothing & promotional industry. Long established client base, being added to continually. Clothing overalls, caps, bags, banners, etc etc

How does the business operate on a daily basis?

Established clients total some 150 odd, with some 50 being more regular & the top 6 being some 50% of turnover. They place orders & forward their fabric/material for embroidery, silkscreen, sublimation, heat/vinyl sticker services, which are priced & prioritised, specifically w.r.t. day/night shifts. The graphic designer develops & sends through the design work, if not already on hand from past jobs. The two production line managers, then ensure their teams carry out the jobs at hand, right through to packaging.

What competition exists?

There is a lot of general competition, but few that meet the range of services, quality & delivery timings, that this Company does.

How could the profitability of the business be improved?

The profitability is improving every year as client orders, turnover, & machinery investments continue to match each other.

How involved is the Owner in running the business?

The owner has reduced his involvement over the years to rather just controlling the strategic & financial side of the business, with the two managers & some key staff managing the business for most of the day or if the owner is away

What are the main assets of the business?

6 Embroidery machines (4 were bought in 2018 ), 4 screen printing machines (2 were bought in 2019), heat press, sublimation machine (bought mid-2020 for R1m), various smaller sticker/vinyl machines, tools, shelving, office equipment including graphics programmes, & a delivery vehicle.
All are in excellent condition & depreciated to some R3.5m, which would cost some R7m to replace with new machines, but with a 2nd hand value of some R3m.
The staff manage the machines, but external service providers in the area do repairs & maintenance when required.

Strengths?

Long established, good client base, capable managers & staff, good mix of services & necessary machinery (some being only 1 yr old), with continually increasing orders, turnovers and NP's

Weaknesses?

Downturn in textile industry which is unlikely with growing market & focus on local production, as well as, the introduction of new technology

Opportunities?

Already being introduced via the R1m large format sublimation machine that is only running at 1 shift vs the factory at 2 shifts.

Threats?

That new players come into the market & pushes prices down, but this is unlikely to occur due to high barriers to entry, in respect of machinery costs, skilled design & production staff, past service history, & client business development

What is the reason for the sale?

Owner retiring

Location

Contact | Enquire

Cliff

Cliff Bell

LocationSouth Africa

Preferred method of contact

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