Business description

New Soft Drink Manufacturer and Contract Packer including a Hot Fill Processing Plant and its Own Range of Juice Drinks

Founded almost three years ago, including nine months spent commissioning the plant, this is a relatively new soft drink manufacturing business. Having recently successfully launched its own range of juice drinks into the retail trade, this is also a ‘one stop shop’ for drinks manufacturers – offering a full range of services including contract packing, packaging design and drinks development.

Based in brand new premises located close to the M25 motorway – ideally situated for rapid delivery to any location in the UK via excellent motorway links, this business has a purpose built, state of the art facility – one of the very few Hot Fill processing plants in the UK, which eliminates the need for chemicals and preservatives in the filling process.

This business’s in-line facility mixes, pasteurizes, fills, caps, sleeves, shrink wraps and palletizes and is capable of processing juice drinks, health drinks, organic drinks and sports drinks, whether still or carbonated with 250ml, 330ml, 500ml, 750ml and 1 Litre PET and Glass bottles all compatible with the facilities available. The whole process is closely monitored to ensure the highest possible standards by the business’s highly qualified and experienced QA staff. With such a compelling combination of capabilities it is no surprise that in just a relatively short period of time this business has already established a strong and loyal Client base including some of the biggest brands found in UK supermarkets. So much so that this business is in the enviable position of being able to pick and choose which companies it wants to work with.
The recent launch of its own soft juice drink range has been no less successful – achieving listings in several major, national supermarket chains. Available in recycled 500ml PET bottles, the branded range including a number of different fruit flavours and with still and carbonated varieties, is made from natural ingredients and is free from artificial sweeteners. Fully sleeved with striking vibrant colours, the range achieves maximum standout on shelf.

The business also acts as contract packer and exclusive distributor for a leading brand of spring water – also totally free from additives.

In just a relatively short period of operation, this business has established itself across a wide range of drinks related interests. As a result it is achieving rapid growth which is set to increase substantially in a very short period of time. With projected turnover of £4.6 million for the financial year ending June 2010, generating gross margins of 43% and pre-tax net operating profits of £1,35 million after Director’s remunerations, depreciation and finance charges totaling £370,000, this is a rare opportunity to acquire a soft drink manufacturer with an almost unique production capability and significant growth and expansion prospects. As such it should appeal to another drink manufacturer or contract packer looking to extend their share of this very lucrative market or alternatively a new entrant to the sector looking to establish themselves in the industry by acquiring one of the very few Hot Fill facilities in the UK.

Key strengths:

This business operates in a category estimated to be worth £1.8 billion sales per annum.

It operates from brand new, state of the art premises specifically designed to meet significant unfulfilled demand in the UK. It is ideally located close to the M25 motorway offering easy access to all parts of the country. The business offers a range of facilities – including Hot Fill into both glass and PET and on-line sleeving which are not easily found elsewhere in the UK. As a result this business can command higher than average margins.

The business has a number of alternative revenue streams – contract filling through to its own branded range of soft fruit juice drinks. Its capabilities are such that there are an almost unlimited number of manufacturers for which this business could work in the contract packing sector. It has already achieved significant listings for its branded range of drinks across a number of major national supermarket chains and is the exclusive UK distributor for a leading brand of natural spring water, for which it is also a contract packer.

Aside from the Owner the business has an excellent, highly experienced and expert management team in place.

Key opportunities:

Early in its stage of development this business has significant opportunities for growth. A new Owner will enjoy significant returns on investment simply by maximizing the utilization of the plant and the facilities available and by ‘farming’ the existing customer base.

Additional substantial growth is also available, however, through further development of its own branded range of soft fruit juices. The range could certainly extend its market penetration with additional listings. There is also the development of brand extensions and new product developments – additional flavours, yoghurts, iced lollies etc.
The business is also in the early stages of the development of products for a number of major customers positioned within the discount supermarket and Cash and Carry sectors.

Financial information:

The business is offered for sale as a going concern. All financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.

Turnover for the financial year ending June 2010 is projected to achieve £4.6m, generating gross margins of 43% and pre-tax net operating profits of £1.35m after Directors remunerations of £75,000, Depreciation of almost £60,000 and Finance charges of £237,500.

The Asking Price of £3,500,000 is based on a sale of the assets and Goodwill in the business to include the branded range of soft fruit juice drinks and the plant and equipment – all fully paid up and free from liabilities.

Property information

Property:

Leasehold

Lease terms:

Leased, with the current arrangement due to expire in 2018, Rent is £68,000 per annum with an additional Service Charge of £15,000 per annum. Rates are approximately £19,000 per annum.

Location:

The business is ideally located in brand new, purpose designed premises situated on a small, newly built, business park within just a few minutes drive of the M25 motorway.
Comprising two adjacent units – one of which contains the production plant and with the second racked for storage and distribution, the premises are approximately 17,000 square feet in all. There is ample car parking and easy access for all forms of road transport with no restriction on operating hours.

Leased, with the current arrangement due to expire in 2018, Rent is £68,000 per annum with an additional Service Charge of £15,000 per annum. Rates are approximately £19,000 per annum. There is also currently the option to take a third unit alongside the two currently used.

Other information

Competition / Market:

The business has invested heavily and very effectively to date to establish awareness of its facility and its unique capabilities, with prominent display ads in the relevant trade press. The business also supported the launch of its branded range of soft fruit juices in the trade press and with in-store advertising and promotions to support its listings. The business has a website which is soon to be launched but by far its most effective form of marketing is the strong word of mouth recommendation the business enjoys testimony to the excellent reputation the business has built up within the relatively short period of time during which it has been in operation – but perhaps more importantly its Hot Fill capabilities.

Support & training:

The current Owner will provide full training and handover to ensure a smooth transfer of the business to new Owners, however, with a strong second tier of management in place, it not envisaged that this will need to be too extensive.

Reasons for selling:

The current Owner believes his skills lie in the setting up and initial development of businesses rather than their day-to-day running. Having established the foundations of a very successful business with excellent growth prospects, the current Owner believes the time is right to pass the business on to new owners to take it on to the next stage in its development.