Fully describe the business's activities?
Profitable business situated in Windhoek with a second branch in Namibia. This business is a gas distributor of industrial bottled gas throughout Namibia, currently supplying oxygen, acetylene, nitrogen, argon, carbon dioxide and specialized welding mixes for engineering, production and mining facilities. It also carries consumables for all welding processes and sells welding machines, abrasives and safety equipment for welders and gas cutting activities.
How long has the business been established?
The business was established in January 2010 in Windhoek.
How are the clients attracted to the business?
This business uses a system of internal / external sales staff who follow up on web advertising and word of mouth leads.
What Advertising/Marketing is carried out?
Advertising is carried out through the website and Facebook page.
Does the business have any contract work?
None at present. However in 2014/2015, this business was successfully awarded a two gas supply contracts (high pressure welding gases) for mines in Namibia.
What competition exists?
There is only one other competitor in this segment in Namibia. Currently this business supplies 3% Industrial Gas to the Namibian market and its competitor 97%, therefore there is huge potential for growth in this market share.
What are the seasonal trends?
This business generally follows the engineering sector holidays i.e. mid December to early January and Easter which are the slowest parts of the trading year.
Is the business VAT Registered?
Yes, all documentation is on file and available to serious buyers.
What percentage of the business is cash/credit?
Approximately 10% cash with 90% on a 30 day from statement credit arrangement.
How could the profitability of the business be improved?
Currently only a small geographical area is being serviced by this business in Namibia. A larger sales team chasing contracted project work, mining contracts, engineering tenders, medical gas and the introduction of further LPG Gases, pub and packaging gases will greatly increase the current profitability. There is an opportunity in the marine sector to supply industrial gas, welding and cutting equipment for the maintenance of shipping vessels. This business was the supplier of such a project and found this market to be of potential. The Namibian Medical Council has recently approved this business to distribute medical gas in Namibia and therefore the current owners will begin the processes to start distributions as of early 2021.
Are there audited financials available ?
There are audited financials available for the last three years.
What is the total staff complement?
There are a total of 6 employees in both Namibian branches.
How involved is the Owner in running the business?
The owner is involved in all major business decisions and provides assistance to sales staff on a regular basis. The General Manager who is based out of Namibia, is responsible for the daily management of the business with assistance of an Operations Manager, Sales Manager and Admin Supervisor.
When does the current lease end?
Both the branches in Namibia lease's end 2020.
Is there an option of renewal & what period?
Both contracts have the option to renew.
What are the trading hours?
Windhoek - Monday to Thursday 07h30 to 16h30, Friday 07h30 to 15h00 Other Branch - Monday to Thursday 08h00 to 17h00, Friday 08h30 to 15h30
Do you require a licence?
Yes, a Fitness Certificate together with a Flammable Storage Certificate.
What are the main assets of the business?
The main assets of the business are plant machinery and equipment.
How have they been valued ?
All assets are calculated at business value: between the replacement value and the new value, depending on the condition and repairs required.
This business has over 10 years of trading in Namibia and has a rolling 10 year exclusive gas distribution contract with their supplier in South Africa for the importation of industrial and specialty gases. The existing contract expires in August 2023, and renewable to the new owner.
The Senior Management team is based in Cape Town and the travel and accommodation costs each month to Namibia are costly.
Only a small part of the total Namibian market has been acquired to date, leaving a significant opportunity for a larger Namibian company to purchase the business and drive it forward.
What is the reason for the sale?
After a 9 year start-up period, the owner has other business obligations in South Africa and is ready to sell the business to a Namibian company.
Why is this a good business?
Well established, profitable with excellent growth potential in an industry with significant barriers to entry. The Namibian Medical Council has recently approved this business to distribute medical gas in Namibia and therefore the current owners will begin the processes to start distributions as of late 2020.
What is the price plus stock and the profit?
The selling price is N$ 3,500,000 including an average monthly stock hold of N$ 450,000.00. The average monthly net profit before tax N$ 60,000.00.
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