Scaffolders have put up a profitable business

Affordable Scaffolding, based in Penrose, showed its skill in the Newmarket railway station renovation project. Photo / Supplied

Onehunga-based Affordable Scaffolding, which hires to and erects scaffolding for contractors and builders, is being offered for sale as a business going concern through Paul Fletcher of Affiliated Business Consultants for an asking price of $1.2 million.

"This business was started in 2006 and has grown to be a much-respected medium-sized hire company," Fletcher said.

"It reports excellent profits, which have grown year on year, and has built a strong reputation for being responsive, reliable and efficient. The company uses an extensive range of top-quality, near-new equipment and has well-thought out systems that minimise staff levels."

The asking price for the business, which is only being sold by the owners for health and retirement reasons, is made up of tangible assets of $860,000 and intangible assets of $340,000.

"The financial accounts show a consistent growth in profitability with reported results for year ended 2008 of $397,603, for 2009 of $443,066 and for 2010 of $635,629," Fletcher says. "This represents a very significant upward trend in the declared cash surplus, particularly in the current economic environment.

"There are genuine reasons for this sale and generous transition support is being offered.

"One key to its success is the owners bringing a new 'customer service' attitude into the construction market, which has developed strong customer relationships.

"The business operates in both the residential and commercial markets, giving the business a good organisational spread. They have built strong links with large contracting companies and have proven themselves in the large-infrastructure project market like the renovation of the Newmarket railway station, which has been part of the $600 million upgrade of the Auckland rail network being carried out by Ontrack - the New Zealand Railways Corporation."

Fletcher said the owners started the business while they were working their way through council consent on a separate development project in West Auckland.

"The two owners work in the business, with one responsible for administration, quotes and meetings with customers, quantity surveyors, etc and the other owner responsible for on-site operations including contract crew and staff.

"They are both supported by a team of casual employees. Flexible working relationships are maintained with staff to avoid large overheads and to enable the business to be responsive to customer needs. "A core of four employees is regularly used with the ability to bring on as many other casual employees as a job requires. Of these four employees one is 'ticketed', who can lead the team on-site and has been with this business for about four years." Most job inquiries come from referrals due to the company's good reputation. The firm also advertises in Yellow Pages and via its own vehicles and equipment, which are well-branded.

"This is an enormous opportunity for a sales and marketing-focused person to drive this business forward," Fletcher says. "The vendors are confident that significant further growth could be achieved by the creation of a website and the pro-active canvassing for work with builders and construction companies."

Fletcher says the business has an impressive set-up for the maintenance of scaffolding components "with 10,000 to 12,000 face metres of equipment".

He says the scaffolding equipment is near new. "Pipe is systematically organised into standardised lengths for efficiency and equipment is certified to Australian and New Zealand safety standards. Affordable Scaffolding has an unblemished safety record. OSH has twice inspected the business and both times commented on the good standards in evidence."

The company operates from a 280sq m premises in Onehunga with a large yard that is centrally located close to the motorway on and off ramp, affording it excellent access throughout the Auckland region.

"The vendor owns the property that the business occupies and is willing to offer this for lease on normal commercial terms," Fletcher says.

The hours of operation of the business depend on the work being undertaken, with residential jobs typically running from around 7am to 3.30pm, five days a week.

"Commercial jobs can run from 7am to 5pm up to six days a week and some large commercial contracts may require the ability for changes to be made 24 hours a day on an as-needed basis," Fletcher says.