Electrical Contractor Specializing In Temporary Electrical Power & Lighting For Construction Sites | | Undisclosed Hampshire | | Electrical Contractor Specializing in Temporary Electrical Power & Lighting for Construction Sites Ref.GK181 Location Hampshire Asking Price £399,000 + ‘Pipeline’ | | BUSINESS FOR SALE ADVERT DETAILS ADVERT NUMBER : 40533
ADVERT IMPRESSIONS : 57,933 TIME(S) | | | | BUSINESS SECTOR: | Building / Construction | | TRADE TYPE: | Joinery & Building | | SALE: | Agent Sale | LEASEHOLD: | £399,000 | | | | | | | | | | Add this business advert to your: | | | | | | | | | | | | | | | BUSINESS DETAILS: | Business profile:
Established approximately fifteen years ago by the current Owner following an extensive career in the electrical contracting sector, this business was formed specifically to provide temporary electrical services to construction sites.
Operating primarily within the south east of England, this business supplies, installs and maintains electrical systems durng the complete construction process. With the bluest of blue chip Client bases which reads like a ‘Who’s Who’ of the construction industry, including virtually every main contractor operating in the south east, this business has grown to become one of the leading providers within its specialist market sector. Contracts frequently extend to two years and more.
This business delivers a first class service from the initial design stage through to the successful completion of large construction projects. With an extensive inventory of equipment consisting mainly of transformers and mains distributions units (MDU’s), this is a full service business offering a detailed specification and cost, or a budget quotation at pre-tender stage. Following approval, this business supplies all the materials to connect site electrics which is then managed and maintained throughout the contract, eventually being removed on contract completion.
This business’s commitment to quality and safety is paramount. All work is carried out to the highest standards and all plant and equipment, which is wholly owned by the business is quality approved and complies with the relevant standards. The business also issues all the periodic testing certificates, risk assessments and method statements to accommodate Health and Safety policies. All staff are fully trained, very experienced, highly skilled, qualified engineers, with many having been with the business for a number of years. Staff are helpful and friendly whilst maintaining a professional attitude and high standard of workmanship at all times.
With turnover for the financial year ending March 2009 slightly in excess of £440,000 generating gross profits of almost £200,000 and pre-tax net operating profits of almost £135,000 this represents an excellent acquisition opportunity and should be particularly attractive as a ‘bolt-on’ to an existing operator within the sector. Alternatively this business represents an excellent foundation to build upon for any new entrant to the electrical contracting industry.
Key strengths:
Having many years experience in the industry – and having been operating as a business for over fifteen years, this company has established an enviable reputation for competitive pricing and high levels of Client service. This business clearly understands the mechanics of a project and in particular how the Electricity Boards work and how best to connect their services to site. It has excellent industry knowledge and knows ‘what the market can bear’, pricing at a fixed rate for a contract and sticking to that price regardless of overruns. Clients are billed monthly ensuring steady income streams and excellent cash flows. With the back up of its extensive inventory of plant and equipment the business is always prepared to be flexible with contract pricing to ensure it secures the projects whilst still maintaining healthy margins. As a result the business enjoys strong levels of loyalty amongst its longstanding Client base.
The business has an excellent, loyal team of highly skilled staff with high levels of technical expertise. Operating in the construction sector, it is the nature of the business that once contract negotiations have been completed projects are very fast moving and this business is geared up to cope far better than most. It has adopted a pro-active, collaborative approach working with Clients rather than for Clients, offering high levels of service at a competitive price.
This is an extremely well run business. It chooses its Clients very carefully – working predominantly with major contractors all of which are good payers. As a result the business doesn’t suffer bad debt. Growth has been steady and well managed with the early years of this business categorised by building long term relationships with Clients. Having originally focused on building its Client base, this business now concentrates more on profitability, which is clearly demonstrated by its excellent ‘bottom line’ performance in recent years.
Key opportunities:
There is an outstanding opportunity to build on the existing services and customer base of this company. With a strong demand for its services combined with a capacity to increase turnover, a new owner contributing additional resources, fresh ideas, drive and enthusiasm will have every advantage of building on an excellent platform.
The main opportunity for increasing turnover and profitability for this business probably lies in better control of its contractual agreements. Currently the business doesn’t charge for contract overruns, for example. Whilst this undoubtedly endears the business to its major Clients – a more pragmatic approach would certainly impact very favourably on the bottom line. There is also scope to extend its range of products to include generators perhaps and to extend the business activities and leverage its considerable stock of plant and equipment by entering the equipment hire sector.
With established contacts across an extensive Client base, this business currently relies completely on existing Clients and ‘market intelligence’ to generate new business. It would also certainly benefit significantly from marketing and advertising – the business does not currently even have a web presence - perhaps to the extent of employing a Quantity Surveyor to undertake direct sales approaches to construction sites when at the very earliest stages of their development.
Currently operating manual systems to manage the operation the business would undoubtedly benefit from the introduction of computerized systems to maximize the utilization of, and returns from, its inventory of plant and equipment, for example.
Premises:
The business currently operates from a home office environment so will need to be relocated. Its plant and equipment is stored in a number of local ‘lock-ups’ when not out on site.
Marketing and advertising:
Having been established for fifteen years and with an owner with extensive contacts within the sector this business has never felt the necessity for heavy investment in marketing and advertising. It has an extensive network of Client contacts and such is its industry reputation and Client relationships it is frequently taken from Client to Client when Contracts Managers, Quantity Surveyors and key contacts in Buying Departments move from company to company – whilst still managing to retain the original company relationship. As a result the overwhelming majority of its business comes from repeat business and strong word of mouth recommendation, testimony to its excellent reputation within the industry for reliability, integrity, competitive pricing and high levels of customer service.
The business does not currently have a web presence, the development of which would enable the business to increase its profile within a wider geographical area.
Financial profile:
All financial discussions will take place directly between the vendors and all interested parties under the auspices of Turner Butler.
For the financial year ending March 2009, turnover, reflecting the prevailing conditions in the construction sector, was approximately £442,000 generating gross profits of £195,300 and a pre-tax net operating profit of £133,000. Projected performance for the financial year ending March 2010 is thought to be on a par with that of 2009. This is significantly down on previous years when turnover has been as high as £800K with gross margins of approximately 40% and pre-tax net operating profits of £240K.
The Asking Price is for a sale of the assets, goodwill and since once secured, projects can stretch many months ahead, the ‘pipeline’ of future revenues arising from secured projects at the time of sale. The assets in the business are conservatively estimated to be valued in the region of £150,000.
Employees:
The Owner and Managing Director is responsible for the overall performance of the business supported by two fully qualified electricians who undertake installations and maintenance. One electrician is a fully qualified Tester. The business also draws on tried and tested sub contract electricians as and when required.
Training and handover:
The current Owners will provide full business familiarisation, training and handover to ensure a smooth transfer of the business to new Owners.
Reason for sale:
This is a genuine retirement sale. | | | | | | FOR SALE | | | | | REFERENCE: | GK181 / RightBiz | | | | | | Request more information about this business.. | | ENQUIRIES: | | | | CONTACT SELLER TO GET THE SELLERS DIRECT CONTACT DETAILS AVAILABLE TO MEMBERS ONLY | | | | | | | | | | | |
