business

CY0329L

WELL ESTABLISHED BAKERY - LARNACA

 
Business Type: Baked Goods Production
Location: District Village, Larnaca, CYPRUS  
Type of Tenure: Leasehold
Business Reference: CY0329L
Asking Price: € 700.000
Annual Turnover 620000
Gross Profit Margin 50%
Monthly Rent 1000
EBITDA Margin 23%
Stocks (at cost) Euro 30.000 approx
Reason for Sale Health problems
Accounts Available 2018
Years Established 27
Incorporated Business Yes (Limited Co)
Relocatable Business YES
Car Parking 4
Vendor Financing Negotiable
Full-time Employees 8
Part-time/Seasonal Employees 3
Internal Area 150 sq. meters
 

Description

This is a unique opportunity to acquire a highly profitable, well established and sustainable wholesale bakery business which maintains a highly recognizable brand in its territory.  

Reported Profit After Tax per Audited Accounts is well over €100.000 annually, while owner’s total discretionary earnings (including salaries and other benefits) are about €170.000 annually.  Furthermore, although profits have been growing over the last 3 years at an annual rate of 4% there is significant room for expansion into new territories or via new products.

The business is offered for sale solely because of owner’s serious health problems.

Business Model

The business has been operating for 27 years and has developed a loyal clientele in Larnaca & Famagusta Districts, based on excellent quality and service. This is a production & wholesale business (B2B), serving grocery stores, supermarkets, the hotel-restaurant-cafe sector, function halls, street food vendors and other retailers.  It has over 80 clients and unlike many other wholesalers does not rely excessively on a few large supermarket chains.

The product line consists of staple/everyday bakery products, such as several types of bread loaves, sliced bread, sandwich rolls, rusks and simple pastry products. Everything is produced fresh in-house and distributed in the market every day by the company’s own fleet of 6 delivery vans.  Prices are, on average, slightly higher than those of competitors and profit margins are kept high – the business competes on quality and good service, not on price. Clients who tried to switch to cheaper suppliers eventually returned to this business, exactly because of the quality and reliability it offers.

The products offered are everyday basic staples, therefore this is a low-risk business not subject to economic downturns and has no competition from imports or new trends.  Bread and related products will always be in demand.

Production/ Logistics

Production takes place in seller’s freehold premises which can be rented by the new owners at only €1.000/month.  Alternately, the new owners may easily relocate production to other premises within Larnaca District. 

This is a lean business which requires only about 150 to 200 square meters (1650 to 2200 square feet).  Larnaca is strategically located to serve Famagusta District but also the whole of Nicosia District and the East side of Limassol District, so there is significant room to expand the territory served. In addition, the owners had plans to introduce new products, however these plans were put on hold due to health problems in the family.     

The business is fully equipped to produce, package and distribute its products. Total investment in industrial bakery machinery and delivery vans was over €190.000 so far.  Production is currently done at night (12-hour cycle) and deliveries start early in the morning, around 5:00am. However, it is possible to start production at 6:00 am and start deliveries at 6:00pm in the afternoon.

Receivables & Payables are very well managed, with an average Receivables of ony 17 Days. Inventory of raw materials turnaround is only 12 Days.  Therefore, the business does not require working-capital, this is practically a cash business and has negligible Bank debt.

Upside

The business distributes wholesale mainly to Larnaca and Famagusta district, but with increased sales efforts it can expand to Nicosia District and also Limassol District. 

New basic, everyday baked food products can be added to the product line.

In addition, there is excess capacity of around 15% which means that without additional investments the turnover can easily exceed 715.000 (currently 620.000). 

Sales & Advertising

Although this is a B2B business which relies mostly on direct sales, in order to generate awareness and more pull among consumers, it advertises over the radio and sponsors TV series, festivals, schools, charities and local events.

Hand Over

Production processes are streamlined and full-time personnel of 6 is highly experienced, competent and loyal. All personnel will stay on after the sale, unless the new owners have their own people to employ. At the same time, the sellers are willing to provide intensive support & training for at least 6 months, therefore the new owners need not be experienced bakers.  However, the owners should engage in overall business management and maintain relationships with clients.

Offer to Sell

The business is conducted by a limited company, therefore it can easily be transferred via a share sale.  The company has no Bank debt while accounts receivable / accounts payable are settled “cash-on-delivery” or maximum on a weekly basis. Therefore, very little working-capital is needed.

The Asking Price is set just under 5X owner’s discretionary earnings and with the right guarantees, a portion of the payment may be deferred. Included in the price are the operating company clean of any debt or liabilities, all bakery equipment, 6 delivery vehicles, trade name & goodwill as well as hand-over support and training.  Stocks-at-Cost will be added to the price on the date of transfer (value ranges around EURO 30.000 in flour, additivies & packing material) 

Anyone who buys this business can start earning up to €15K per month from Day 1.

 

Photos

  • The present business is offered for sale by DealMasters.  Any information downloaded or printed is intended strictly for private use by you as a Registered User of our web-site; it may not be copied, published or distributed in any manner. 
  • You are advised that this is a confidential sale, therefore no direct approach to the business owners or business premises should be made and all viewings should be arranged through DealMasters. 
  • Prior to disclosure of the identity of the business and/or its owners, business financials and other operational details, interested parties will sign the standard Confidentiality Agreement, which can be downloaded here or sent to you by fax upon request.
  • We do not perform any due diligence on businesses for sale, business owners, or the information provided by them.  Such information is passed on by us without any guarantee or responsibility. Interested Buyers are strongly urged to perform thorough due diligence prior to acquiring a business
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