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Profitable Wholesale Bakery Business In Cyprus For Sale

Undisclosed, Larnaca District, Cyprus
Asking Price:
€450,000 Furniture / Fixtures included
Sales Revenue:
€620,000
Cash Flow:
€170,000

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 €100000 annually, while owner’s total discretionary earnings (including salaries and other benefits) are about €170000 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 and need tp retire.

Business Model

The business has been operating for 29 years and has developed a loyal clientele in its territory 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 (estimated cost of relocation around €25.000 excluding cost of new buildings) but there is no pressure to relocate unless the new owner wishes to.

This is a lean business which requires only about 150 to 200 square meters (1650 to 2200 square feet). The business currently serves the South & South East territory of Cyprus, but it can also deliver to the whole of Nicosia District and the East side of Limassol District, so there is significant room to expand the territory served.

The business is fully equipped to produce, package and distribute its products. Total investment in industrial bakery machinery and delivery vans was over €---.--- so far. Production is mainly done at night and deliveries start early in the morning, around 5:00am. Recently, the business started a second (daytime) shift from 8am till 4pm to satisfy increased demand for its products.

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 the immediate areas around it, but with increased sales efforts it can expand to the whole of Nicosia District and the Easte part of 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 800000 (currently just below 7000000).

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 2.6X 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, additives & packing materials)

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

Property Information

Real Estate:

Lease

Lease Terms:

Freehold Property belongs to the Bakery, it can be rented to the new business owner for 1000 per month only

Leasehold Rent:

€12,000 per annum

Living Accommodation:

Owner's luxury house with 5 bedrooms and pool also available for sale. Price TBD

Location:

In a village 10 minutes from Larnaca

Premises Details:

Fully equipped bakery for bread products, rusks, rolls.

Size in square feet:
1,600
Planning Consent:

Licensed Bakery by the Health Department

Business Operation

Expansion Potential:

Can easily expand to service new areas, also new products can be added

Competition / Market:

Very little competition in the wholesale bakery business, especially in the region of Larnaca towards the East of Cyprus

Reasons for selling:

Owner has to retire

Trading hours:

Production starts at 8:00pm and finishes at 5:00am. Deliveries start at 6:00 am

Employees:
10 F/T and 3 P/T
Years established:
31

Other Information

Support & training:

For as long as needed

Owner financing:
Owner financing is available. Please contact the seller for more information.
Financing available:

Negotiable for part of the selling price (about 100000) and for stocks (about 20000)

Furniture / Fixtures value:
€200,000 - included in the asking price
Relocatable:
This business can be relocated.