HEADLINE SUMMARY
ESSEX
FABRICATED STEEL PRODUCTS FOR INDUSTRY WITH PARTICULAR EXPERTISE IN THE ELECTRICAL SUPPLY INDUSTRY
• Established over 45 years
• Turnover £441,038 (2011)
• EBITDA averaging £95,000 per annum over the last 5 years
• EBITDA 2011 £92,000
• Freehold £399,950 plus shareholders’ funds of approximately £23,000 or Leasehold £275,000 plus shareholders’ funds of approximately £23,000
• Reference: 1227CO
BUSINESS SUMMARY
This successful and profitable company has developed an excellent reputation in the field of steel fabrication work, along with associated fabrication services. The business mainly undertakes bespoke and short run work. It has particular expertise within the electrical supply industry, manufacturing steel components for use in electricity sub stations. The business offers a personal service which can include design, fabrication, assembly and installation on site. Approximately 60% to 70% of revenue is generated through work within the electrical supply industry, with the remainder through a variety of other customer orders emanating from the public and private sectors. Trading from its base in coastal Essex, customers are located throughout the UK and cover a broad spectrum of business sectors. Included within the sales is a quantity of machinery, tools and vehicles and a freehold factory. There is an option to lease the premises if required.
The company has enjoyed a successful trading history with heritage dating back to 1967. Over the years, the business has generated significant and consistent profits. The customer base is well spread and the repeat rate is exceptionally high. In financial terms the balance sheet is strong, with an EBITDA figure averaging £95,000 per annum over the last 5 years ensuring excellent earnings for a new buyer. Considerable focus has been applied to the margin, with excellent performance in 2011 (EBITDA at £92,000) expected to continue in to 2012 and beyond. The company has both consolidated its place within this sizeable industry and developed a number of new customers of late. Overall, the market for steel fabrication services is strong, growing and global.
The company would be an ideal purchase for a similarly sized or larger corporate, probably within the engineering/fabrication industry, and with an acquisitive growth strategy. Such a purchase would give access to mature, repeat customer base, a company with solid financials, and a freehold factory. Alternatively, this business could form an ideal adjunct to an existing engineering company seeking additional customers, possibly within the electrical supply sector.
SCOPE AND POTENTIAL
The overall market for steel fabrication services is substantial in financial terms, and global in geographical terms. The potential for growth is significant. To date, the business has revolved around the personal requirements of the directors, but it is clear that investment in business development activities, and possibly additional sales staff, could generate very considerable volumes of business. There is additional production capacity within the business. It would be sensible for a new buyer to explore additional markets in terms of industry sector. Further sales could probably be developed through updating the existing website. The vast majority of work currently commissioned is through recommendation and previous work undertaken. Buyers of the business could elect to re-locate in the short or medium term and look to redevelop the existing site as housing. The business is based in a mainly residential area and close to a public house and local amenities.
For the right buyer, the advantages could be considerable in terms of access to a mature customer base, where generation of additional work from these clients would be entirely feasible. In addition, it is probable that significant cost savings could also be generated through integration of the business with an existing company. Ongoing structural changes within the electricity supply industry will continue to create opportunities with much day to day work and capital projects being outsourced.
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An Energy Performance Certificate will be made available upon request of further details where one is required for the business premises.