Melford Environmental Services IM

165323 MELFORD ENVIRONMENTAL SERVICES LIMITED INFORMATION MEMORANDUM

Melford Environmental Services Limited | Information Memorandum

FINANCIAL HIGHLIGHTS

TURNOVER

GROSS PROFIT

350

100 150 200 250 300 350 400

300

250

200

150

100

Turnover £'000

Gross Profit £'000

50

- 50

-

YE20 Stat

YE21 Stat

YE22 Stat

YE23 Draft

YE20 Stat

YE21 Stat

YE22 Stat

YE23 Draft

ADJUSTED EBITDA

SHAREHOLDER FUNDS

250

- 10 20 30 40 50 60 70 80 90 100

200

150

100

Adjusted EBITDA £'000

50

Shareholder Funds £'000

-

YE20 Stat

YE21 Stat

YE22 Stat

YE23 Draft

31.01.20

31.01.21

31.01.22

31.01.23

Detailed financial information can be viewed on p 12.

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Melford Environmental Services Limited | Information Memorandum lf i l i i i | I f ti

CONTENTS

FINANCIAL HIGHLIGHTS 2

EXECUTIVE SUMMARY 4

HISTORYAND OWNERSHIP 5

PRODUCTS AND SERVICES 7

CLIENTS AND MARKETING 8

MANAGEMENTAND EMPLOYEES 10

GROWTH OPPORTUNITIES 11

FINANCIAL INFORMATION 12

GLOSSARY OFTERMS 14

DISCLAIMER 15

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Melford Environmental Services Limited | Information Memorandum

EXECUTIVE SUMMARY

OVERVIEW

1.1. Melford Environmental Services Limited (‘MES’ or ‘the Company’) is a pest control and prevention business operating across Cambridgeshire, Bedfordshire, Hertfordshire, Essex and Greater and Central London.

HISTORYAND OWNERSHIP

1.2. The Company was established in 1993 and has since established an excellent reputation and loyal client base. 1.3. MES is a member of a number of associations and holds numerous accreditations. 1.4. The Company’s shares are divided between Managing Director Stephen Marsh, Company Secretary Tina Marsh and Director Richard Dalleywater, who hold 40%, 35% and 25% respectively. 1.5. They are selling the Company in order to facilitate retirement plans.

CLIENTS AND MARKETING

1.8. MES has a reputation for high-quality service and excellent client care. As a result, the Company benefits from a large and loyal client base. 1.9. The Company has taken a passive approach to marketing, relying on word-of-mouth referrals to generate new custom.

SERVICES

1.6. MES offers a comprehensive and effective pest control and prevention service. 1.7. Pests treated include rats, mice, garden ants, cockroaches, flying insects, wasps, moths, pigeons, pharaoh ants and stored product insects.

MANAGEMENTAND EMPLOYEES

1.10. All Pest Control Technicians are fully trained and qualified.

1.11. Including Directors, there are currently five full-time and two part-time employees.

LOCATIONAND FACILITIES

1.12. The office and store are based from Stephen and Tina Marsh’s home, presenting a fully relocatable opportunity.

GROWTH OPPORTUNITIES

1.13. Our clients have advised that, if a Salesperson were recruited and a marketing campaign established, there would be great potential for MES to expand.

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Melford Environmental Services Limited | Information Memorandum

HISTORYAND OWNERSHIP

HISTORY

2.1. The Company was established in 1993 and has grown steadily since its inception.

2.2. The timeline on the following page outlines the key milestones in MES’s history.

2.3. The Company is a member of the British Pest Control Association (BPCA) and National Pest Technicians Association (NPTA).

2.4. MES is Confederation of European Pest Management Association (CEPA) certified to BS EN 16636:2015 and is SafeContractor accredited.

OWNERSHIP

2.5. The Company is operated by three Directors with support from a team of four employees.

2.6. The table below indicates the percentage of shares held by the Directors:

NAME

EXECUTIVE POSITION

SHAREHOLDING

Stephen Marsh

Managing Director

40%

Tina Marsh

Company Secretary

35%

Richard Dalleywater

Director

25%

2.7. The Directors have offered a negotiable handover period in order to ensure the continued smooth operation of MES during the transition to new ownership.

2.8. They are selling the Company in order to facilitate their retirement plans.

2.9. Stephen Marsh and Richard Dalleywater are Servicing Technicians; however, the other employed Technicians have an excellent knowledge of their area and clients. An experienced Technician, employed by the buyer, would be able to continue the high level of service.

2.10. Accounts and service control are both computerised and so can be transferred to a new owner’s system.

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Melford Environmental Services Limited | Information Memorandum

1993 The Company was established as a partnership, carrying out fencing and pest control.

1999 Richard Dalleywater joined and MES was established as a limited company with the current Directors.

2000 Purchased a small pest control business and decided to concentrated on just the pest control side of the Company.

2003 Sold two national pest control contracts to enable MES to service a more compact area and be more efficient.

2018 Turnover exceeded £250,000.

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Melford Environmental Services Limited | Information Memorandum

PRODUCTS AND SERVICES

OVERVIEW

3.1. MES offers a comprehensive and effective pest control and prevention service, providing commercial contracts and jobwork against all pests.

3.2. The Company has a premium pest management service tailored to suppliers of large food or pharmaceutical companies.

3.3. MES provides a proofing service against birds, including netting, anti-roost spikes, guano cleaning and biocide treatment. The Company also installs chain screens and mesh fly screens, and rodent proofing including bristle strips and filling entry points with specialist sealant. 3.4. MES supplies and services most makes of electric grid and glue board fly killers and moth traps. Catch trend analysis can also be reported.

3.5. The table below highlights the annual income generated by each of the Company’s services:

SERVICE

INCOME (YE23)

Contracts

£269,340

Insect-related jobwork

£46,132

Rodent-related jobwork

£32,540

Bird-related jobwork

£16,920

3.6. Commercial contracts are continuous, providing on-going revenue. Nearly all of the additional jobwork derives from existing clients; although not a guarantee, jobwork is regular. 3.7. New clients are onboarded constantly, with MES’s contract portfolio increasing each year. Most contracts are on-going unless terminated by the clients, giving one quarters notice in writing. A number of clients renew their contracts annualy with a pruchase order. 3.8. The Company will eradicate any infestation speedily and efficiently, having carried out a risk assessment regarding the client’s premises, business activity and on-site materials. 3.9. Pests treated include rats, mice, garden ants, cockroaches, flying insects, wasps, moths, pigeons, pharaoh ants and stored product insects.

3.10. As of 01.08.23, MES has a forward order contract value of £287,440. 3.11. The Company also has approximately £16,000 of pigeon proofing orders due to be carried out. 3.12. The Company owns five vans with an approximate value of £65,000. Our Client is willing to include the vans in the sale, if required by the buyer.

3.13. Contracts are invoiced quarterly in advance with

approximately 40% of clients paying via direct debit. All new clients are automatically signed up to this payment method.

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Melford Environmental Services Limited | Information Memorandum

CLIENTS AND MARKETING

CLIENTS

4.1. MES has a reputation for high-quality service and excellent client care. As a result, the Company benefits from a large and loyal client base.

4.2. MES currently has approximately 210 active clients.

4.3. The table below outlines the Company’s top five clients:

LENGTH OF RELATIONSHIP

CLIENT

INDUSTRY SECTOR

SALES (LAST FY)

A

Brewing

£72,732

28 years

B

Education

£58,210

23 years

C

Property management

£16,290

24 years

D

Bakery

£14,594

20 years

E

Food manufacturing

£11,434

19 years

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Melford Environmental Services Limited | Information Memorandum

4.4. MES offers its services to a range of sectors, the majority of which are premises that have a commercial kitchen, for example restaurants, pubs, schools and universities. 4.5. It also caters for factories, industrial units, suppliers of large supermarkets and pharmaceutical companies, and management businesses that provide pest control to common areas.

MARKETING

4.6. Having established an excellent reputation, the Company has taken a passive approach to marketing, relying on word-of-mouth referrals to generate new custom. 4.7. MES operates an informative website where clients can view the full range of services, which pests can be treated, the Company’s fly killing units and make online enquiries about its services.

4.8. The website can be found at the following address:

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Melford Environmental Services Limited | Information Memorandum

MANAGEMENTAND EMPLOYEES

www.melfordpestcontrol.co.uk

OVERVIEW

5.1. All of MES’s Pest Control Technicians are fully trained and qualified to BPCA / Royal Society of Public Health (RSPH) standards and are PROMPT registered to record ongoing training.

DEPARTMENT

HEADCOUNT

Pest Control Technician

4 full-time, 1 part-time

Service Control / Accounts

1 full-time, 1 part-time

“I used Melford a few years back to remove a wasps nest. Quick response, competitive price and a great company to work with, very professional. Definitely recommend.” - Client testimonial

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Melford Environmental Services Limited | Information Memorandum

GROWTH OPPORTUNITIES

5.2. The table below outlines the department headcounts, including Directors: 5.3. Post-sale, a Manager may need to be recruited if a new owner does not have a management team within their existing structure.

OVERVIEW

6.1. Having established an excellent reputation within its area and built strong relationships with its clients, the Company is well positioned to pursue ongoing growth.

BUSINESS DEVELOPMENT

6.2. Our clients have advised that, if a Salesperson were

employed and a marketing campaign established, then there would be great potential for MES to expand.

6.3. The Company could increase its service offering and clientele in order to supply to a wider demographic. 6.4. MES could also establish itself through the country to become a leading business in the pest control industry.

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Melford Environmental Services Limited | Information Memorandum

FINANCIAL INFORMATION

MARKETING

6.5. As the Company generates a consistent, sustained income with no active marketing output, it could recruit a dedicated Sales Representative to promote the Company’s services and attract new clients. 6.6. The use of pay-per-click (PPC) and search engine optimisation (SEO) on its website could further strengthen the Company’s online presence and increase online enquiries.

6.7. The table below outlines the Company’s annual Profit and Loss accounts.

YE20 £

YE21 £

YE22 £

YE23 (Draft) £

PROFIT AND LOSS (£)

Turnover

312,812

279,552

293,808

364,932

Cost of Sales

(76,938)

(58,439)

(74,568)

(74,439)

Gross Profit

235,874

221,113

219,240

290,493

Gross Profit Margin

75%

79%

75%

80%

Administrative Expenses

(155,567)

(160,057)

(164,750)

(184,057)

Other Operating Income

22

14,877

6,807

500

EBIT

80,329

75,933

61,297

106,936

Depreciation

1,078

3,049

9,012

13,521

EBITDA

81,407

78,982

70,309

120,457

Addbacks

Directors' Remunerations

65,752

75,387

69,584

76,865

Directors' Pensions

3,218

2,575

2,575

2,575

Client Entertaining

1,718

183

1,576

1,378

Adjusted EBITDA

152,095

157,127

144,044

201,275

NB: Addbacks entail one-off costs that hold minimal relevance to the Company’s performance, as well as costs that an acquirer will not necessarily incur.

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Melford Environmental Services Limited | Information Memorandum

FINANCIAL INFORMATION

6.8. The table below outlines the Company’s yearly Balance Sheet.

YE20 £

YE21 £

YE22 £

YE23 (Draft) £

BALANCE SHEET (£)

Fixed Assets

Tangible Assets

5,757

12,557

27,036

40,562

Current Assets

Cash at Bank

101,291

103,083

87,989

115,487

Creditors: Amounts falling due within one year

(55,676)

(51,105)

(48,988)

(58,631)

Net Current Assets

45,615

51,978

39,001

56,856

Creditors: Amounts falling due after one year

(2,547)

(2,547)

(2,547)

(2,547)

Provision for Liabilities

(614)

(614)

(614)

(614)

Net Assets

48,211

61,374

62,876

94,257

Capital and Reserves

Profit and Loss Account

48,211

61,374

62,876

94,257

Shareholder Funds

48,211

61,374

62,876

94,257

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Melford Environmental Services Limited | Information Memorandum

GLOSSARY OFTERMS

ABBREVIATION

DEFINITION

MES / the Company

Melford Environmental Services Limited

EBITDA

Earnings before interest, tax, depreciation and amortisation

BPCA

British Pest Control Association

NPTA

National Pest Technicians Association

CEPA

Confederation of European Pest Management Association

RSPH

Royal Society of Public Health

PPC

Pay-per-click

SEO

Search engine optimisation

YE

Financial year ending 31 st January

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Melford Environmental Services Limited | Information Memorandum

DISCLAIMER

This Information Memorandum (“the Document”) is provided solely for use by the recipients in considering their interest in acquiring the Company, either wholly or in part.

• Persons having professional experience in matters relating to investments as described in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Financial Promotion Order”);

This Document is not a prospectus and does not constitute or form any part of any offer or invitation to subscribe for, underwrite or purchase securities, nor shall it or any part of it form the basis or be relied upon in any way in connection with any contract relating to any securities.

• High net worth companies, unincorporated associates, partnerships or trusts or their respective directors, officers or employees as described in Article 49(2) of the Financial Promotion Order;

• High net worth companies, as defined in Article 49(2); and Certified sophisticated investors as defined in Article 50(1).

The sole purpose of this Document is to assist the recipient in deciding whether it wishes to proceed with a further investigation of the Company. It is not intended to form the basis of any investment decision or decision to purchase the Company.

The content of this document has not been approved by an authorised person and that approval is, unless this exemption or any other exemption applies, required by Section 21 FSMA. Recipients should note that reliance on this document for the purpose of engaging in any investment activity may expose them to a significant risk of losing all sums invested or of incurring additional liability. If recipients are in any doubt as to the action they should take, they should consult an advisor authorised under FSMA specialising in advising on investments of the kind set out in this document. The distribution of this document in certain jurisdictions may be restricted by law and therefore persons in possession of this document should inform themselves about and observe any such restrictions. Any such distribution could result in a violation of the law of such jurisdictions. No shares or other securities of the Company have been or will be registered or otherwise qualified for sale or resale under Federal or State laws in the United States of America or Canada. Neither the US Securities and Exchange Commission nor the Securities Commission of any State of the United States has approved or disapproved the shares of the Company or passed on the accuracy or adequacy of this Document. Each recipient doing business in or organised under the laws of the United States of America or in areas subject to its jurisdiction represents that it is an institutional investor, expressing an interest for its own account and agreed not to purchase, distribute or sell any of the Company¹s securities or any interest therein except in compliance with the above laws. The Shareholders expressly reserves the right to alter or terminate the process and to accept or reject any preliminary or final offers at any time, in either case, without giving reasons therefore. In furnishing the Document, the shareholders undertake no obligation to provide any additional information or to update this Document or to correct any inaccuracies in this Document which may become apparent.

The information contained in this Document is selective and is subject to updating, expansion, revision and amendment. It does not purport to contain all the information that recipients may require. No obligation is accepted to provide recipients with access to any additional information or to correct any inaccuracies which may become apparent. Recipients should conduct their own investigation and analysis of the Company and of the information contained in this Document, and are advised to seek their own professional advice on the legal, financial, taxation and other consequences of providing funding to the Company. This Document includes certain statements, estimates and projections with respect to the anticipated future performance of the Company and as to the market for the Company’s products. Such statements, estimates and projections reflect various assumptions made by the Management of the Company concerning anticipated results, which assumptions may or may not prove to be correct. No representation is made as to the accuracy, reasonableness or completeness of such statements, estimates and projections. Knightsbridge Business Sales Limited (“KBS”) has not independently verified any of the information contained or opinions expressed herein. Neither the Company, nor KBS, nor affiliated partnerships or bodies corporate, nor the directors, shareholders, managers, partners, employees or agents of any of them, makes any representation or warranty, express or implied, as to the accuracy, reasonableness or completeness of the information contained in the Document. All such parties and entities expressly disclaim any and all liability for, or based on or relating to any such information contained in, or errors in or omissions from, this Document or based on or relating to the recipients’ use of the Document. This Document is confidential being for use only by the persons to whom it is issued and who have signed the required form of confidentiality agreement. Accordingly, the contents of this Document, including the Personal Data (as defined in UK data protection legislation, being the Data Protection Act 2018, General Data Protection Regulation 2016/679, the Privacy and Electronic Communication (EC Direction Regulations 2003) and any replacement legislation coming into force from time to time, together with any codes of practice or other guidance issued by any competent regulatory authority) herein, and any other information, Personal Data or opinions subsequently supplied or given in connection with the proposed sale will constitute information pertaining to the Company (“Confidential Information”) and may not be published, reproduced, copied or disclosed to any person other than the professional advisers to the recipient of this Document having a need to know and who are aware that it is confidential, nor used for any purpose other than in connection with the proposed acquisition. Notwithstanding any other provision or obligation in this Document, the signed confidentiality agreement shall apply in all respects to the Confidential Information and in the event of a conflict between the signed confidentiality agreement and this Legal Note the confidentiality agreement shall prevail. In the event that the recipient does not continue with his interest in the Company, this Document must be returned to KBS. The recipient will keep the Confidential Information supplied or given to it or its agents or advisers in connection with the proposed sale safe and secure so as to prevent any unauthorised person having access to it, and the recipient agrees that the information is proprietary to the Company and it has no rights to it except as set out in this notice. Neither the receipt of this Document by any person nor any information contained in it or supplied with it or subsequently communicated to any person in connection with the proposed funding of the Company constitutes, or is to be taken as constituting, the giving of investment advice by KBS to any such person. Recipients of this Document shall not be deemed to be clients of KBS and KBS shall accordingly not be responsible to such recipients for providing the protections afforded to clients of KBS or for providing advice in relation to any transaction or arrangement referred to herein. Each such person should make its own independent assessment of the merits or otherwise of acquiring the Company and should take its own professional advice.

In no circumstances may recipients or their officers, employees, agents and professional advisers make contact with the Management, employees, clients, agents or suppliers of the Company until permission to do so is given in writing by KBS.

CONTACT DETAILS

For further information regarding this opportunity, or to arrange a meeting, please contact a member of our team below:

KNIGHTSBRIDGE TEAM

Phone: 01204 555 084

Email: sara.thomasson@knightsbridgeplc.com

(Strictly by appointment through the Offices of Knightsbridge Commercial)

This document has been issued on the basis that it falls in the exemptions to Section 21 of the Financial Services Markets Act2000 (“FSMA”) set out below. It is directed only at:

15

KBS House 5 Springfield Court Summerfield Road Bolton Greater Manchester BL3 2NT

T: 01204 555 084 E: buy@knightsbridgeplc.com www.knightsbridgeplc.com