Ferns nursery has lots of room to grow

5:00 AM Saturday June 27, 2015 Colin Taylor

An aisle of ferns within Fronds NZ nursery.

Fronds NZ, a large specialist fern nursery based near Cambridge in the Waikato, is being offered for sale as a going concern business on leased premises following a decision by the owner to retire.

The business at 3807 Cambridge Rd, Leamington, is being marketed for sale by Scott Laurence of Affiliated Business Consultants for an asking price of $475,000 inclusive of plant stock with an estimated value of $280,000.

Laurence says the horticultural business occupies 2.6585 ha freehold land less than five minutes’ drive from the centre of Cambridge.

“In my view this is an ideal turn-key business for someone looking to escape the city rat race,” Laurence says. “It is a well organised and presented operation that is trading well and able to offer a sound six figure net income to a working owner.”

He says Fronds NZ is a supplier of both indigenous and exotic ferns and large grade trees along with a variety of shrubs and Ponga pots.

“This is a profitable five day a week business, with no requirement to work the weekends. It predominantly wholesales to retailers including the right to bar code and supply some of the larger format stores.”

Most of the area servicing the business consists of fern nursery under shade housing with typically 30-35,000 ferns in stock at any one time. The majority of the ferns are sourced and collected from pine forest areas, under a permit system. They are transported to the nursery where they are replanted and grown to be sold to customers around the country.

“Under very capable current ownership since 2002, the business has diversified over the last few years and grows some large grade specimen trees along with a range of New Zealand natives,” Laurence says.

Currently about 80 to 85 per cent of the sales are generated by growing ferns with the balance in other lines. The customer base is mostly within the North Island and comprises a range of garden centres, retailers, and landscapers.

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Elevated view over numerous potted ferns growing at Fronds NZ nursery

Laurence says the company’s website www.fronds.co.nz has proved an excellent marketing tool and professionally showcases the business.

Fronds has the equivalent of 2.5 full time and knowledgeable employees with the nursery manager having a degree in horticulture.

“Good, competent and experienced staff are in place and a very sound reputation has been successfully built up over many years with a wide range of customers. It is a low risk opportunity ideal for someone who is looking for a good return with the potential to grow the business and the income base further.

“Additionally, it is a business that can be learned and the vendor has indicated he is happy to work alongside the new owners for an agreed period to ensure a smooth transition.”

Chattels include a small truck, a tractor, forklift and some sundry equipment with a depreciated book value of about $20,000.

Laurence says the Fronds NZ is arguably the largest operation of its kind in New Zealand and offers the largest range of fern varieties.

“There are good gross profit margins in the product with no apparent pressure on this margin,” he says.

The business benefits from a preferred supplier status with some large format retailers and has an excellent spread of customers. Approximately 26 per cent of sales are to large format stores, about 32 per cent to garden centres, 31 per cent to landscapers and councils and 11 per cent in cash sales from the website or gate sales. “The customers are generally prompt payers.”       

Ferns as plants have a strong appeal in New Zealand and are unlikely to go out of fashion. The location of the business is also ideal having a good growing climate and being close to the main population centres and markets.

Laurence says a long lease for the land and buildings will be negotiated with the purchaser and there is the possibility of including a residence on the property as a home, business and lifestyle package.

“Another option is for a buyer to acquire the land and buildings as a freehold property and going concern business,” he says, adding that the land and building have recently been valued at $780,000 while the current rateable value is $840,000.

In relation to developing the business further, Fronds has the skill base to grow a number of its own ferns from spore and avoid the cost of buying them and this could open up new markets to other wholesalers. Some land is not being used and more specimen trees could be grown there.

Other development options include working with a South Island business to increase sales in this market; improving the ability for consumers to buy ‘online’ by adding a shopping cart to the website; and exploring potential synergies with other nurseries which don’t have a base in the Waikato.