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Australian Financial Review : October 17th 2006
FBA 050 A Reputable Electroplating and Zinc Plating Service Company Expressions of interest are invited for the purchase of one of South Australia's prominent providers of Electroplating and Zinc Plating Services. Expression of Interest Business Details: • $1.5 Million Approximate sales; • Distinctive Quality and Performance Reputation; • EBIT $200K +; • Established 1973; • Electroplating for the automotive, farming, whitegoods, mining, defence, hardware and electrical industries; • Skilled and Stable Workforce and Suppliers; • Extensive and High Quality Customer Base; • Located in the Southern Suburbs of Adelaide; • Environmental Management focus; • $600K Net Assets; • Sale due to Retirement. Enquires should be forwarded to Tim Sargent at Hayes Knight SA on (08) 8232 7770 or email@example.com. Well established and privately owned civil contracting firm working with major corporate clients and maintaining an excellent reputation within the industry. • Quality Endorsed Company • Long established • Experienced staff in place • Own plant & equipment • Established office & workshop facilities • Great cash flow • Excellent net returns This company would ideally suit a civil engineer or partnership to service the existing and established client network. Proven performer. Please contact Peter Bailey on EXPRESSIONS OF INTEREST CIVIL ENGINEERING & CONSTRUCTION BUSINESS FOR SALE (03)9878 0999 or 0412 366 869 MELBOURNE FRANCHISE FOR SALE MAKING A $MILLION$ PA • Regular "Direct Debit Cash Flow" guaranteed. • Full financial history to support stated profit • This 69 strong franchise group is the No.1 company in this booming industry • Support, training, National Brand and top systems make this a brilliant investment for novice or professional. Asking $2,850,000 Brooke Glew - 02 9439 3399 firstname.lastname@example.org www.bc.com.au Corporate Synergies Management Services Income $27Million. Net $550k Sydney CBD based business provides Contractor Management Services to professionals working for Australian Companies. A well established business history with developed systems requires minimal staff compliment. The business is highly regarded with reputation for integrity, quality & service. No Debtors. Directors wanting retirement seek interested party to purchase the business, client base and essential assets. Central location. Vendor offers extended transition assistance. This is a quality business with identified opportunities for continued growth. Suit C.A. or similar group wishing to expand here or create a Sydney presence. Full Price $950,000 REF 610AM www.corporatesynergies.com Expressions of interest to: Murray McLeod Tel: 1300 668 200 P O Box 364 MIRANDA NSW 1490. COMMERCIAL BUSINESS BROKERS www.corporatesynergies.com MARINE DEALERSHIP! (Central Coast) Could this be the ultimate in business opportunities? A well established YAMAHA marine dealership specialising in new and used boat, motor, trailer packages, sales and service. Join a fun industry, take on a new life style and enjoy the challenge of growing an exciting business. $POA (= 4* EBIT) plus SAV (if wanted) MARINE Apply email@example.com or Ph Peter 0419 874 555 Expressions of interest For sale as a going concern Building & Construction Waste Recycling Operation Two Adelaide Locations -- Wingfield & Lonsdale Operation: • Established processing facilities conver ting building waste recovered from sites to road base (PM21 and PM32 equivalent product); • Product cer tified to Depar tment of Road Transpor t specifications for use as sub-base or base course material; • 200 tonnes per hour processing capacity; • Two independent leasehold sites. For sale: • Operation as stated above, one or both locations; • All necessar y licences; • All on-site Plant & Equipment; • Business name. For a copy of the information memorandum, please contact Mr. Darren Klenk at the address below. Offers for the business close 30 October 2006. Grant Thornton 1st Floor 67 Greenhill Road WAYVILLE SA 5034 T (08) 8372 6666 F (08) 8372 6677 HWR/2271/10/06 Beyond bricks and mortar security Working capital Jason Clout Pearling is a highly capital-intensive industry. Photo: PETER STOOP A ustralia's pearling industry produces a quality product but the costs are high, prompting one medium-sized company to raise capital through a managed investment scheme. Unlisted Arafura Pearls grows and harvests Australian South Sea Pearls at Elizabeth Bay near Nhulunbuy in Arnhem Land in the Northern Territory. Co-founder and chief executive Andrew Hewitt said a ''nice string of pearls could cost between $50,000 to $100,000''. Generally clean conditions in Australian coastal waters contribute to their quality. Arafura's production centre was in an area with little nautical traffic, well-shielded by nearby islands, he said. Australia pearls were highly regarded because of their size and colour. Pearls from other regions might be 5 millimetres to 6 mm in diameter but Australian pearls are often 11 mm to 12 mm and can grow to 20 mm. ''It's often the bigger the better. Their size is a function of the Pinctada maxima shell native to Australia,'' Hewitt said. But aquaculture production was expensive and Arafura's recent expansion had led it to alternative sources of funding. ''Pearling is a highly capital- intensive industry,'' he said. The company has about $15 million tied up in livestock, about $10 million in marine and land infrastructure and about $4 million for entering Australia's quote system for pearling production. Arafura recently quadrupled its production. It had been leasing 40,000 shells but through a series of conversions to ownership and additional leasing it now has 160,000 virgin shells in production. Like many small or medium- sized enterprises, the question of raising capital has become an issue for Arafura. The two traditional methods of capital raising, more equity or debt, were rejected. Additional shareholders diluted ownership of the business, Mr Hewitt said. ''With debt, I think the aim should be to have as little as possible. We've reduced our debt significantly and, besides, I don't think the banks really understand businesses which don't have bricks and mortar as security.'' Arafura opted for a managed investment scheme (MIS). These cover many types of investments, including agricul- ture investments such as forestry. The initial MIS sold by Arafura closed in April. It received a product ruling from the Australian Taxation Office for 100 per cent deductibility. Arafura says it was the first retail MIS in the pearling industry, raising $4.5 million. The company raised another $5.5 million from existing shareholders. It is about to launched a second MIS. This time it is aiming to sell about $7 million through the scheme. Based on the first scheme, the company says a minimum investment of $14,000 would give growers an entitlement to about 200 seeded shells. Arafura says the shells have a maturity cycle of about 6 1 2 years. The projected return from the investment is about 15 per cent a year over the life of the project. Mr Hewitt said most of the return came in year four of the project. But he stressed that Arafura's MIS does not have special concessions, as do some other MIS agriculture schemes. ''There is no prepayment rule for us. A deduction is only available to the extent of the work carried out that year,'' he said, noting that meant investors would get about 75 per cent and then the balance in two 12.5 per cent instalments. He knew there were critics of the effect of such schemes on agriculture. Some argue it has raised the price of land in rural areas, possibly deterring the next generation of farmers from entering the industry. But the risks inherent in aquaculture and agriculture production meant raising capital by other means could be difficult, he said. While pearl production is the main game for Arafura, it does make use of the by-products. The oysters and the shells themselves are sold, with the meat sought after. ''But they only play a small role in the business model,'' said Mr Hewitt. That business model is starting to return a dividend. In June, the company posted a maiden profit of about $2 million in its eighth year of operation. The Australian Financial Review Tuesday 17 October 2006 www.afr.com 50 ENTERPRISE