Rental Hire - Health And Safety Legal Requirements
Excellent Financial And Operational Performance
$3,995,000 - Auckland
This is an excellent opportunity to own a well-established and highly profitable business. Recent and on-going changes to Health & Safety regulations and Worksafe practices via the Health & Safety at Work Act 2015 mean the business has a government mandate to grow.
The business rents, erects, and then dismantles scaffold mainly to construction companies - for both the commercial and residential markets. Previously, contractors could paint a two storey house with ladders that now require scaffolding to be used. Breaches of the law are treated seriously and may result in financial penalties to the contractors and property owners.
The business also hires or charges for other services including:
- Site fencing
- Mobile towers
- Roof edge protection
- Plastic wrap.
Strengths of the Business
- Recognised and long-established brand in the scaffold industry
- Consistent and reliable revenue from scaffold hireage and rental
- Good database of repeat clients developed over several years
- Very good location close to motorways and central city
- Multiple revenue streams including fencing and plastic wrap
- Continuing investment in scaffold ensuring future rental income; and
- Strong Financial Performance
The business has doubled its revenue and trebled its earnings before interest, tax and depreciation since 2013 despite the fact that it has never had a specific growth strategy. A new owner can grow the business further by:
- Broadening revenues due to ongoing Health and Safely regulation changes
- Continuing to invest in scaffold equipment to grow rental revenues
- Improve sales and marketing efforts especially around website
- Consider new business areas like fall arrest systems and scissor lifts
- Improve management and supervision of staff to deliver productivity gains
- Implementing an improved business development and marketing strategy
In FY17 the business achieved an EBITDA (Earnings before Interest, Tax and Depreciation) of $1,217,452. For FY18, based on the actual results for the 11 months to February 2018, the provisional EBITDA will be $1,171,000. The ability of the business to continue to deliver superior financial results proves the business value is sustainable. Rental revenues are continuing to make up approximately 50% of all turnover ensuring a continuing source of income into the future.
Net Surplus $1,171,000 (Provisional FY 2018) EBITDA