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BUSINESS REFERENCE : EY020 / RightBiz EY020-MIDLANDS-£735,000-LEADING MANUFACTURER & SUPPLIER OF PLASTIC BUILDING PRODUCTS | | | | | | Leading Manufacturer & Supplier of Plastic Building Products Confidentially offered for sale Ref. No: EY020 Location: Midlands Asking price: £735,000 | | | BUSINESS LOCATION: | Undisclosed West Midlands UNITED KINGDOM | | BUSINESS SECTOR: | Manufacturing | | TRADE TYPE: | Plastics & Chemical | | SELLER: | Agent Sale | LEASEHOLD: | £735000 | | | | | | | | | | | BUSINESS DETAILS: | Business Profile:
Established as a small distributor less than seven years ago, this business has rapidly grown organically and by acquisition to its current size of five depots spread across the Midlands and can now boast turnover of £3.5m per annum.
This business offers its customers a full range of plastic building products and related ancillary components backed up with a continued commitment to excellent customer service. This together with the ability to adapt to the ever-changing demands of its customers has enabled it to establish a very strong presence in its marketplace.
Servicing both the trade and DIY markets; with clever local branding of outlets this group combines the flexible image of the local supplier with the economies of scale and buying power available to a major regional ‘player’.
In just five years the business has built up an enviable customer base of 400 regular account customers who add to the hundreds of cash transactions that occur each week. New clients, often referred by satisfied existing customers are added to the customer base each day - from right across the building sector, including major contractors, window companies, roofers, builders and builders’ merchants.
This business offers quality products at competitive prices combined with a next day delivery service. Specialist advice is always on hand at each of its depots from its pleasant and helpful staff.
It has a long-standing association with HW Plastics and is a main stockist for Kestrel and BCE products. It is also a stockist for Permacell and Deceuninck products as well as being a main agent for Marshall Tufflex Rainwater Components.
With the foundations built from its regional dominance it is looking to extend its distribution further with deliveries now being made throughout the UK. The possibilities of adding depots in Leeds and Watford to service the North and South of England are under active consideration.
Having achieved considerable growth in such a short period, the group is well on course to achieve its ultimate aim - to leverage its excellent reputation for customer service, its excellent supplier relationships and its considerable customer base to become a ‘one stop shop’ incorporating building plastics, roofing components and window frames. With profits available to the current Owner of the business of almost £300,000 per annum, this business represents an excellent acquisition opportunity for anyone looking to enter this sector or for an existing operator to acquire a very profitable major regional player.
Locations:The business currently operates from 5 fairly localised depots across the Midlands, all conveniently located for easy access to the excellent road network:
Location 1: Head Office and sales depot. Approximately 9,000 square feet. As well as housing the senior management functions of Operations, Sales, Finance, Accounts and Warehousing this is a depot in its own right. This property is leasehold. Annual rent is: £31,547 per annum.
Location 2: Approximately 2,500 square feet. This property is leasehold. Annual rent is: £6,800 per annum.
Location 3: Approximately 3,000 square feet. This property is leasehold.Annual rent is: £10,360 per annum.
Location 4: Approximately 2,800 square feet. This property is leasehold. Annual rent is: £10,000 per annum.
Location 5: Approximately 2,000 square feet. This property is leasehold. Annual rent is: £5,500 per annum.
Key strengths:
By trading under a number of local brands this business presents itself as a local supplier combining all the connotations that brings - flexibility, friendliness, good customer service, quality products, local market knowledge etc - with the economies of scale and buying power of a major player.
It has invested significantly in developing a high quality, professional and pro-active sales force used to meeting and exceeding aggressive sales targets within what can best be described as an ever changing market environment.
The business has in place a very sound group structure that extends beyond the current owners of the business – a team that is highly experienced and competent with the ability to adapt to the pressures of a rapidly growing organisation.
Key opportunities:
With such a successful business model – locally branded outlets with the economies of scale and buying power of a major ‘player’ - there is considerable scope for future growth of this business.
With demand for its products already evident outside its current ‘footprint’ there is the possibility of extending its coverage by opening or acquiring additional depots and expanding with the Midlands at its centre. The launch of its cutting centre which currently supplies all of the existing depots has proved very successful and could certainly be replicated in areas outside the Midlands.
The ultimate aim of the business is however to be a one-stop shop for its customers. Being a progressive and forward thinking organisation the business is already looking at the possibilities of diversifying into the window industry – the next logical step – with the potential acquisition of a window manufacturing company and regionally based re-sellers. Windows could then of course be introduced throughout the existing depot network further reinforcing its ‘one stop shop’ credentials, significantly boosting turnover and of course, profitability.
Advertising and Marketing:
The business has advertised its services through the normal channels including Yellow pages, trade magazines, Thompson Directory, trade and local press and PR and is fully supported by its suppliers with a full range of product literature. The group does not currently have a functioning web-site.
It has recently introduced a customer newsletter, keeping customers up to date with the latest corporate developments and new product information.
An excellent reputation has been achieved as a result of word of mouth recommendations, bearing strong testimony to the excellent standing the business enjoys throughout its customer base.
Employees:
A senior management team of 6 head up the Operations, Sales, Finance and Commercial functions, with three others operating in support at Head Office.
A Depot Manager is responsible for the day to day running of each of the depots with the exception of the Derby depot where there is also a Deputy Manager. A further twelve personnel manage the warehouse and delivery requirements across the group.
Financial information:
The business is being offered as a going concern. All financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.
The business is financially stable with low borrowings, low overheads, positive cash flow, enjoys a strong order book, high gross and high net profit and has shown consistent strong growth in profits.
Sales turnover for the financial year ending October 2007 was approximately £3.49m generating profits available to the Owner of the business of approximately £295,000.
Support and Training:
The vendors will be available for a full business familiarisation to ensure business continuity and make certain of a smooth handover.
Reason for sale:
Having built the business up to its current size the current owners wish to realise their considerable investment to date. | | | | | BUSINESS STATUS: | FOR SALE | | | | | CONTACT: | TURNER BUTLER | | TELEPHONE: | 01895 25 6000 | | REFERENCE: | EY020 / RightBiz | | ENQUIRIES: | | | | | | | | | | | | | | | | | | | | |
