Coastal restaurant on a tranquil river offering fine food and 19 slot machines for entertainment

View photos

Asking Price

R8,410,000

Monthly Profit

R219,659

Asset Value

R 600,000

Stock Value

R 10,000

Yearly Net Profit

R 2,635,909

Summary

Popular coastal destination restaurant with slot machines offers a relaxed holiday feel with attractive river views, indoor or outdoor dining. Idea venue for a morning breakfasts, teas or afternoon dining. The Slot machine owners together with the owner of the business ensure that the stringent management and controls required by the licensee are adhered to. The business requires strong and dedicated management with strict criteria as requirement by the Eastern Cape gambling board. The slot owners gave the business a glowing report at their last audit. It would benefit significantly from being owned and managed by an experienced restauranteur, ideally a younger couple who could share the responsibility and extended operating hours…… the slot machines offer late evening operations and 24 hours on a Saturday. The restaurant is trading below breakeven as the current Owner previously had an experienced restauranteur managing that side of the business which is not his personal forte. Conveniently situated near the main shopping hub, it serves as the perfect break for shoppers or a gathering place for friends and family. The restaurant itself offers much more development potential and an ideal venue for functions and promotional activities such as pensioner specials, wine tastings, wedding receptions etc The outdoor waterside seating offers tranquil views and an ideal place to while away the day. Please note that Proof of Funds are required before any confidential information can be shared.

Give me more information

Fully describe the business's activities?

Restaurant with 19 slot machine based in the Eastern Cape, on the waterside at a popular coastal resort.
Indoor and outdoor dining facilities within a tranquil environment.
The slot machines are the major attraction of this business however the restaurant is not contributing significantly towards the profitability at present..
An on-site liquor license is in place.

How does the business operate on a daily basis?

There are 8 staff members, inclusive of a BEE co-partner (as is required in terms of the slot machine management).
One staff member, a mature gentleman, who has a very solid track record and semi retired, assists at the slot machines and oversees the stringent security requirements.

How are the clients attracted to the business?

This is a long established restaurant and the introduction of the slot machines has boosted the profitability of the business significantly.
An attraction is the extended trading hours of the slots, and over the weekend they offer 24 hours accessibility.

What Advertising/Marketing is carried out?

The business makes use of Face Book, Local Adverts, What's-On type brochures (In that region) although the business has a strong following.

What competition exists?

There is competition in the town but nothing in close proximity to this restaurant.

What are the seasonal trends?

The business is not significantly affected by seasonality as much as on-beach location restaurants are, but they do enjoy incremental activities over Easter, Christmas and other holiday periods with a summer activities being higher than that of winter.

Is the business VAT Registered?

Yes

What VAT documentation is on file?

As and when required.

Are there up-to-date Management Accounts available?

Yes

What percentage of the business is cash/credit?

The credit card purchases equate to approximately 80% and cash around 20%.
They receive very favourable credit card rate of 1,4% and debit card rate of .8%.

What is the age analysis of the debtors book?

There is no debtors book.....but it should be noted that the proceeds from the slot machines are paid over to the business on a regular basis which assists considerably with cash flow.

How could the profitability of the business be improved?

The Seller feels that he is not as active within the restaurant as his previous partner was, and therefore the restaurant income and profitability is not contributing as much as the potential allows.
An experienced restauranteur (ideally a husband and wife or family team) will be able to greatly improve the contribution of the restaurant, and that can show significant increased profitability.

Give a breakdown of staff/ functions/ length of service?

Owner and Manager oversee the business and the slot machines as is a requirement.
4 staff manage the restaurant and 4 are allocated to the slots area and requirements.
A Co-director (BEE) is in place as is a requirement of the slot owners, and a mature semi-retired gentleman assists with the security in the slot machine space.

Do any receive special perks or incentives?

Tips are shared amongst the staff.
Other incentives at the discretion of the Owner.

Do any have management potential?

One of the team is a Co-director and joint manager in the business.

How involved is the Owner in running the business?

The Owner is very actively involved in the business on a daily basis.

When does the current lease end?

There are currently 3 years left of a 5 year lease.

What are the trading hours?

Slots:
Monday to Thursday 09-30 to 12-00 midnight
Fridays and Saturdays from morning opening to closing on Sunday night....Saturday is 24 hours trading.
Restaurant:
Mondays to Sundays 08-00 to 17-00.

Is a copy of the lease available?

This will be made available at time of Due Diligence

What are the main assets of the business?

An asset list will be provided to a Buyer at time of Due Diligence.
The premises have a 3.2 KVA Generator which is the property of the Seller and not the business.
The business have inverters which are used for loadshedding and power cuts, to ensure that at no time is trading disturbed.
Pizza oven and gas burners, tables chairs, kitchen equipment etc.

Are any items not included in the sale?

The generator is the Sellers personal property.

Strengths?

This is a very safe residential and holiday home environment in the village with a strong visitor influx over the holiday periods.
Excellent and consistent profitability from the slot machines paid over on a regular basis by the slot owners and full audit trails at all times.
An experienced restaurateur will be able to bring the restaurant back to being a significant profit contributor to the business

Weaknesses?

The restaurant requires an experienced restauranteur to realise its full potential.
The trading hours are lengthy but staff structures provides for this.
The Owner or the Co-director do need to be available outside normal trading hours and while the slots are active.

Opportunities?

The restaurant hours can be extended to include evening dining.
Sundays are currently half days in the restaurant and this can be extended.
The restaurant offers strong growth potential as this is not the Owners forte. An experienced restauranteur will certainly be able to improve the profit contribution considerably

Threats?

There are no known threats to the business.
(The premises are well covered by CCTV cameras with off site viewing, and recording.)

What is the reason for the sale?

The Seller has managed the business for over 10 years and with the extended trading hours and the required presence for the slot machine management, he feels that he would like to now wind down and pursue other interests.
He will not be leaving the area, and is prepared to assist if required by arrangement if required but would like to hand over the operational aspect to a new owner
He may be prepared to consider a operational trading partner but subject to certain conditions, although an outright sale is preferred.