COVID-19: The Function Hall opened again in mid-May after lockdown finished in Cyprus. It is currently fully booked from September 2020 up to year-end and almost fully booked for 2021, while bookings have started for 2022. Even with social distancing measures, this function hall is very large (2.476 sq. m.) and can compete with smaller function halls which cannot cater to large functions. Capacity now, with distancing measures, is 650 persons/seated - normal capacity is 1.000 persons/seated.
This very well established business primarily offers fully catered functions & events in its own custom-designed and built function halls, but is also active in outsourced catering under contract.
The main functions/events it accommodates and caters to are weddings, christenings, corporate events and sports team events. The business offers a complete package for functions & events, including the use of its fully equipped function halls, catering from its own kitchens and optional supplementary services, such as live entertainment, special lighting, music and decoration.
The business is licensed as a Functions Hall by the Cyprus Tourism Organization (Restaurant/Function Hall license) and by the Local Authority. All buildings have been constructed according to Town Planning & Building regulations and appropriate permits are held. In addition, the business maintains up to date Health Department, Live Music and Alcohol licenses (renewed annually).
With a long trading history, this business is very well established and well known in Cyprus, therefore most clients come from referrals and word of mouth. The business maintains a professionally designed website and social media presence via Facebook and Instagram. Advertising is not a necessity, as the function hall is always fully booked for months, nevertheless some advertisements are placed in local magazines and radio stations.
The business is on a growth trajectory, with Sales increasing from €667.000 in 2017 to €719.000 in 2019, while Profit before Taxes and Depreciation increased in the same period from €145.000 to €253.000.
This is a year-round business with little seasonality. A great advantage is that bookings, especially for weddings, are made at least 9 months in advance, sometimes even 2 years in advance. Therefore, each year most of the income is secure from prior bookings and by February or the latest by March the revenue for the year is already known, except of course for late bookings or smaller events. Similarly, contracts for outsourced catering are usually for one year and are negotiated and signed several months in advance.
Bookings for 2020 were aleady €650.000 as of January 2020, so this years Sales would have exceeded 2019 Sales if there was no lockdown. As of September 2020 the business is fully booked for the whole of 2020 AND 2021!
The business can cater indoors to a minimum of 4.000 persons per weekend, or 1.000 persons on a daily basis, based on kitchen staff working one shift and current seating capacity. Given the rising trend for functions to be held in custom-made halls with full catering services, as well as the trend for companies, schools, army units and other organizations to outsource catering to professionals, there is considerable room for growth in existing services.
Another avenue for growth is to build a pool or large water feature with appropriate landscaping in the extensive freehold land plot. This will attract more clients, especially those preferring to have an outdoor reception.
A promising growth sector is the provision of hot meals for supermarkets, bakeries, cafeterias and take-away shops. This line of business has excellent prospects due to a change in lifestyles and high employment, which means that most working men and women prefer to purchase lunch near their place of work instead of taking cooked food from home or eating junk food. The business already offers this service to certain organizations, so expansion is just a matter of more sales effort.
The function hall is located within easy reach of residents of Famagusta/ Ayia Napa area and Larnaca area. It is also easily accessible from Nicosia and Limassol. It is highly visible and easily accessible by car, on foot or public transportation.
This facility is freehold and consists of a 12783 square meters (about 142000 square feet) land plot, while the buildings cover 2476 square meters in total (about 27500 square feet) out of which 1722 square meters functions areas and 754 square meters kitchens, offices and ancillary rooms.
It is noted that the land plot is in a residential Town Planning zone with allowable building density of 60%, so there is great upside in the property value, while the built area can be extended to almost 7700 square meters provided additional parking space is provided.
Car parking is crucial for this business and is well provided, with hundreds of parking spots within the premises, while more spots are available free on the street.
The whole building was custom-designed and built from the beginning as a function hall, with the appropriate archtecture, ambiance and interior design, such as high ceilings, chandeliers, sound system, security system, advanced lighting effects, heating and air-conditioning. Of course there is also a fully-equipped, professional kitchen.
Total investment in equipment, furniture, fixtures and interior design was in excess of €900000.
HAND-OVER & SUPPORT
The current owners will provide hand-over support to the buyer on a full-time basis for three months. Thereafter, help and advice will be given up to 2 days per week for the following nine months, in total one year of support. Longer period of support is negotiable.
OFFER TO SELL
The business is offered for sale due to owner’s pressing obligations with several other businesses.
Asking Price is €4.650.000 to purchase 100% of the company shares in a “clean sale”, with no debt or liabilities on the company books. The sale includes the freehold property and the whole of the business undertaking on a fully operational basis (personnel, equipment, suppliers, clients, bookings for 2020 and 2021, etc.)
Independent, professional property valuation of the freehold in 2018, was €4,1 Million excluding the business value. Considering that the business generates a cash flow of around €250.000 (and growing) we have assigned a value of €900.000 to the business.
The business has a long-term loan for €2.000.000 secured by a 1st Mortgage on the property. The loan is regularly serviced/problem free and there is ample headroom in the property value. Therefore, this loan can be assumed by the buyer who will then pay current shareholders only the balance of €2.650.000. Or, if the full price is paid, the business will be transferred with no debt or liabilities.