Business description

This well-established, quality manufacturer of chairs and other furniture products for the hospitality market is seeking an investor who is prepared to purchase a majority stake in the business and supply additional investment capital.
The founder, who has an engineering background, started the business in 1989 and his wife joined the business, from a sales background in 1992. The business moved to its current premises near Kings Lynn in 1999.

The Company manufactures about 80% of the products it sells, buying in the remainder of the turnover. About 70% of sales are accounted for by chairs of which, the majority are manufactured in aluminium. The balance of sales is accounted for by tables mainly for banqueting use.

The largest customer accounts for less than 15% of total sales. In 2009 the Company took approximately 840 orders from approximately 280 different customers. It is estimated that 60 to 65% of sales go to the end user with the remainder being sold to the trade for onward sale to end users such as Hotels, Conference Venues, Function Suites, Churches etc.

At its peak the business employed 19 in the factory but this has now been cut back to 13 this year in view of the difficult trading conditions. The factory premises extend to 13,000 sq ft on a 2 acre site.
Over the 3 years ended March 2009 annual sales have been between £1.7M and £2.0M generating an average Adjusted Operating Profit of c £110k. The impact of the recession has been to reduce sales in the current year to around £1.4M which, as a result of cost savings, is expected to produce a small profit.
Without any additional investment, the directors expect the business to recover back to pre-recession levels in the year ending March 2011 with sales of £1.7M and an Operating Profit in excess of £100k. With additional skills and investment in sales & marketing and production the directors believe substantial growth is possible. The combined Balance Sheet NAV is likely to be around £50k excluding surplus cash at Completion.
The directors are seeking an individual or trade investor who is prepared to purchase a majority shareholding and provide additional investment capital and security for working capital facilities, if required and also provide business skills probably on a part time basis.

The Guide Price for a 60% interest is £180,000 and up to £100k Investment Capital is required. Either or both the current directors would expect to stay on on an arms-length cost of employment basis. The additional skills sought are higher level general business and/or financial and marketing expertise.

Property information

Property:

Leasehold