Specialist engineering company milling precision components

This light-engineering machining company mills precision components for aeronautical satellite communications in the aerospace, aviation, astronomy and industrial sectors. Our client specialises in aluminium machining but also works on a wider range of materials, including stainless steel, mild steel, plastics and non-ferrous metals. The company shows excellent profit margins and high EBITDA margins demonstrating their ability to effectively convert earnings to cash, which presents a self-financing asset with significant growth potential.

Key Aspects

• Excellent quality manufacturing and technical capabilities
• An enviable reputation for honouring agreed delivery dates, with constant communication with clients, leading to significant repeat business
• Full compliance to ISO 9001:2015 manufacturing standards, and yearly audits by clients requiring stringent production and quality standards
• Complete traceability for each manufactured part of material used, equipment used, material supplier, and quality assurance
• Quantities of scale production enables greater profitability than manual production
• Skilled staff and establishing a workshop with the expensive assets present a significant barrier to entry
• A generator and UPS system enable continued production
• Multiple suppliers of materials, derisking production output

Opportunities

• The existing machinery and staff have capacity to handle growth.
• Improved BEE score: this will provide access to new contracts, specifically for South Africa’s Dept of Defense and the government-owned Meerkat SKA Project, one of the world’s largest satellite fields.
• Developing a sales team to penetrate new markets: Historically, all work has come from referrals and repeat business.
• Expanding the customer base: a recently acquired customer has requested mild steel machining work, so the revenue contribution from manual machining production will increase in FY21.
• Exporting specialised parts is a potential area of growth; the company has some previous export experience.

Headquartered

• The company is headquartered near Cape Town, Western Cape, and supplies companies within the Western Cape region.

Current Markets

• The current market is predominantly users of satellite communication systems in the aerospace and aviation sector. Potential markets could include any company that requires precision milling of specific components.

Real Estate

• Manufacturing takes place in a light industrial area approximately 50km from Cape Town. The premises are within easy access of motorways for facilitated logistics.
• The business is owned by the company, and can be included in the sale, or removed from the company and leased to new owners.