Clockwork strikes south to buy up rival for £200,000

Published on Thursday 16 July 2009 21:20

AN EDINBURGH removals entrepreneur has continued to expand into England, buying an established Sheffield-based business in a "pre-pack" administration.

Clockwork, the removals and storage business, paid just 200,000 to buy SBS, a domestic and commercial removals business which is expected to add around 2.5 million in turnover.

The deal is the 19th business Edinburgh-based Clockwork has acquired since its formation in 1996.

Managing director Courtenay Morison said that, while the removals market had been hit by a slowdown in the housing sector, assets are now coming up at depressed prices, making it an ideal time to expand.

"In two or three years time the money should come back, there should be less competition and hopefully our margins will increase," Morison said.

"I think now is a good time to consolidate and expand the business."

Morison described SBS as a high-quality company, but one that was caught by a downturn in trading and the overheads of maintaining a 100,000sq ft warehouse, some of which was sublet to haulage companies, which pulled out as their own businesses retrenched.

Because SBS was bought out of administration, Clockwork has not taken on the liabilities of the former company, and Morison said the operations would be transferred to Clockwork's existing business in another part of Sheffield over the next eight weeks. The deal was completed in a matter of days, with Morison praising the Bank of Scotland, which provided 100 per cent of the funding at short notice.

SBS is not the only deal Clockwork has completed in recent months, having bought Cookson & Son, a small company based in Poulton-le-Fyde, near Preston, which is expected to add some 150,000 in turnover.

Morison said the company would continue to look for other acquisitions, with business currently being targeted where the price is the net value of the assets being purchased.

Clockwork is expected to turn over about 15m in 2009.

Morison said like-for-like turnover had fallen 15 per cent compared to last year, and that margins had been "shot to pieces", falling from double digits when the housing market was strong to low single digits in recent months.

"It's a brutal market, only the fittest are surviving this," he said.

In recent weeks housebuilders have been more upbeat about the market, and Morison said there was also signs of a recovery in removals."Things have definitely picked up, just in the last two or three weeks, he added."