Cash is king
More fabricators are partnering with asset disposal specialists to handle their unwanted machinery and equipment. Kevin Gardner, commercial manager at BPI Asset Disposal Solutions, discusses how this approach helps optimise cash flow and frees up space for business expansion.
In business, it is inevitable that some assets become underutilised. This happens for a variety of reasons, although there is a tendency for businesses to hold on to them because they don’t have time or appropriate experience to sell them.
It is often easier for the issue to be ignored, meaning the number of saleable assets accumulates over time, although there are significant costs associated with this, besides ongoing depreciation.
The hidden costs of holding onto underutilised or unwanted assets include ongoing maintenance, which remains essential even for seldom-used machinery as well as costs associated with in-house or external storage facilities. These expenses can significantly impact cash flow, creating unnecessary financial pressure.
Cost of unwanted assets
Understanding these hidden costs and putting together a plan to sell underutilised assets is vital for fabrication businesses to maximise operational efficiency and maintain a healthy cash flow.
The additional working capital from an asset sale enables investments in newer technologies, boosting operational efficiency. Fabricators can also allocate these funds towards staff training and development, fostering innovation and further enhancing overall business performance.
When you decide to sell unwanted assets, there are a number of crucial steps to take in order to maximise their worth. At this point, many fabricators choose to partner with an asset disposal specialist to ensure a smooth and hassle-free process.
The journey typically starts with a comprehensive asset audit, where underutilised fabrication machinery is identified through criteria such as operational hours, mechanical condition and maintenance expenses. We are often asked what can be sold.
Our response is: any qualifying physical assets from your business can be sold via our online auction platform. That includes everything from large fabrication machinery to tools, vehicles and even office furniture.
Once assets are identified, preparation for sale can then begin. This may involve minor repairs, cleaning and ensuring all maintenance records and documentation are up to date – steps that substantially enhance resale value.
Selecting appropriate sales channels is crucial. An asset disposal specialist can offer valuable guidance, often recommending industry-specific auctions for their efficiency in selling machinery, equipment and tools to an international market, enhancing the probability of achieving optimal sale prices.
Dempsey Dyer
Occasionally, challenging trading conditions lead to business closures. This was the situation recently with West Yorkshire-based Dempsey Dyer. Following the appointment of liquidators in December 2024, BPI Asset Advisory, our sister company, was instructed to value and dispose of the company’s assets.
Despite efforts by the company directors and BPI Asset Advisory to find a buyer, the business itself could not be saved. Consequently, a two-day online auction was held in January to sell the company’s assets piecemeal.
Dempsey Dyer, established in 1977, was a respected manufacturer of high-quality PVC-U, timber and aluminium windows and doors. The business operated from a 3.5-acre site with 65,000ft² of manufacturing space, using modern CNC and conventional equipment.
Day 1: focused on timber manufacturing equipment, finished goods, and stock, including a six-month-old Weinig Conturex CNC window manufacturing line, a Centauro Beta CNC Chisel Morticer, and Wadkin joinery equipment.
Day 2: showcased PVC-U and aluminium production machinery, handling equipment, and support tools. Highlights included a 2023 Carif 320 CNC horizontal bandsaw, a BJM 100P profile machining centre, and an Urban quad sash welding unit. Over 500 lots were offered in total.
Going for growth
Successful asset management necessitates recognising the appropriate moment to divest underutilised equipment. By understanding the expenses linked to underutilised assets and working with an asset disposal specialist, fabricators can enhance operations and strengthen cash flow, positioning themselves for sustainable development.
In today’s competitive marketplace, strategic asset management decisions are fundamental to success. Collaboration with asset disposal specialists helps unlock value, turning unwanted assets into cash.