Illustrative sample
Northfield Fire & Security Ltd
Both documents below are fictional. Northfield Fire & Security Ltd, its clients and its figures are invented so the layout can be read. The buyer pack is the part that would be forwarded. The seller report would stay with the owner.
Use the browser print command if you want a PDF of this illustration. A real delivery is two files, not this page.
Document 1
Buyer pack
This is the document the seller would forward after the confidentiality agreement is signed.
Business snapshot
Fictional fire-alarm and security maintenance firm. One depot in the fictional town of Northfield. Years ended 31 March. Services: contracted maintenance of fire detection and intruder alarms, plus a smaller stream of installation and call-out projects.
| Trading | 14 years in the illustration |
|---|---|
| Headcount | 14: owner, office manager, estimator, 11 technicians |
| Accreditation in the story | A company-held fire-maintenance approval. Two technicians hold personal gas and manufacturer tickets. Not a real accreditation record. |
| Sites | One depot. Clients are site-based contracts across the fictional county. |
Revenue quality
Recurring revenue is contracted maintenance. One-off revenue is installation and project work. Recurring share is recurring revenue divided by total revenue.
| Year ended 31 March | 2024 | 2025 | 2026 |
|---|---|---|---|
| Contracted recurring | 980,000 | 1,110,000 | 1,210,000 |
| One-off and project | 440,000 | 450,000 | 470,000 |
| Total revenue | 1,420,000 | 1,560,000 | 1,680,000 |
| Recurring share | 69.0% | 71.2% | 72.0% |
Retention is contracted revenue retained, divided by opening contracted revenue. Into 2025, £901,600 of £980,000 was retained (92.0%), and £208,400 was new. Into 2026, £1,032,300 of £1,110,000 was retained (93.0%), and £177,700 was new.
Client concentration
Shares use total revenue of £1,680,000 for the year ended 31 March 2026. The named contracts below are the recurring book. Other contracted clients and one-off work make up the balance, so the column sums to total revenue.
| Client (fictional) | Annual value (£) | Share of revenue |
|---|---|---|
| Northfield Borough Council | 142,800 | 8.5% |
| Meridian Logistics Ltd | 96,000 | 5.7% |
| Hart & Co Warehousing Ltd | 84,000 | 5.0% |
| St Brigid’s Academy Trust | 72,000 | 4.3% |
| Vale Retail Parks Ltd | 48,000 | 2.9% |
| Top five | 442,800 | 26.4% |
| County maintenance framework | 60,000 | 3.6% |
| Harbour Hotels Ltd | 42,000 | 2.5% |
| Pennine Clinic Rooms Ltd | 36,000 | 2.1% |
| Redkite Offices Ltd | 30,000 | 1.8% |
| Lowfell Community Centre | 24,000 | 1.4% |
| Top ten | 634,800 | 37.8% |
| Other contracted clients | 575,200 | 34.2% |
| One-off and project work | 470,000 | 28.0% |
| Total revenue | 1,680,000 | 100% |
Earnings
Adjusted EBITDA here is reported operating profit, plus depreciation, plus documented add-backs, minus a market-rate manager cost. Interest is not added, because operating profit in this illustration is stated before interest. An add-back without supporting papers is excluded. There is no such item in this sample.
| Line | £ | Evidence in the story |
|---|---|---|
| Reported operating profit | 210,000 | Illustrative profit and loss |
| Add depreciation | 28,000 | Illustrative fixed-asset schedule |
| Add amortisation | 0 | None in the illustration |
| Add personal motor costs | 6,400 | Marked as owner invoices, not fleet vans |
| Add one-off lease-dispute costs | 8,200 | Marked as a single invoice, not expected to repeat |
| Add owner remuneration in the profit and loss | 95,000 | Illustrative payroll |
| Less market-rate manager cost | (65,000) | Assumption for a working manager. Not a quoted salary. |
| Adjusted EBITDA | 282,600 |
The same bridge, with the illustration’s earlier add-backs, gives adjusted EBITDA of £202,200 for 2024 and £236,800 for 2025.
Owner dependence
In the story the owner works about 12 operational hours a week. The office manager runs scheduling. The owner still holds the commercial relationship on the two largest contracts and is the named individual on those two agreements. Company approvals sit with the company. Personal tickets sit with employed technicians, not with the owner.
Workforce
Eleven technicians. In the story, median tenure is six years, and nine hold a fire-alarm maintenance ticket. One lead engineer holds three manufacturer approvals that the others do not. Certification in this sample is invented.
Debt capacity
Cash available for debt service is adjusted EBITDA, minus an allowance for tax, minus maintenance capital expenditure. Both allowances are assumptions in this illustration. The tax allowance is 25% of (adjusted EBITDA minus depreciation), which is £63,650. Maintenance capital expenditure is £18,000. Cash available is £200,950.
At a 1.5× coverage ratio, annual debt service can be £133,967. A single amortising loan at an illustrative 8.5% over 7 years, sized to that service, is about £685,710. That figure is capacity for the whole debt service. A seller loan uses part of the same service, so the senior loan would be smaller.
The sensitivity below is not that capacity figure. It takes an indicative price, a seller-loan share, and a senior loan, and asks whether the resulting annual service still covers at 1.5×. Assumptions, all illustrative: buyer equity 30% of price; seller loan, where present, at 6% amortising over 5 years; senior loan is the remainder, at the rate and term in the row.
| Multiple | Price (£) | Seller loan | Senior (£) | Annual service (£) | Coverage |
|---|---|---|---|---|---|
| 3.0× | 847,800 | 0% | 593,460 | 115,944 | 1.73× |
| 3.0× | 847,800 | 20% | 423,900 | 123,070 | 1.63× |
| 3.0× | 847,800 | 40% | 254,340 | 130,196 | 1.54× |
| 3.5× | 989,100 | 0% | 692,370 | 135,268 | 1.49× |
| 3.5× | 989,100 | 20% | 494,550 | 143,582 | 1.40× |
| 3.5× | 989,100 | 40% | 296,730 | 151,895 | 1.32× |
| 4.0× | 1,130,400 | 0% | 791,280 | 154,592 | 1.30× |
| 4.0× | 1,130,400 | 20% | 565,200 | 164,093 | 1.22× |
| 4.0× | 1,130,400 | 40% | 339,120 | 173,595 | 1.16× |
| Senior term | Senior rate | Annual service (£) | Coverage |
|---|---|---|---|
| 5 years | 8% | 170,825 | 1.18× |
| 5 years | 10% | 177,423 | 1.13× |
| 7 years | 8% | 141,951 | 1.42× |
| 7 years | 10% | 148,545 | 1.35× |
Indicative valuation range
Adjusted EBITDA of £282,600 multiplied by 3.0× to 4.0× gives an indicative range of £847,800 to £1,130,400.
Document 2
Seller report
This stays with the seller. It is the list of what to consider before forwarding the buyer pack, and it is not part of that pack.
On the screening lines used for this illustration, recurring revenue and retention are above 60% and 90%, the largest client is below 10%, and the top five are below 30%. The owner’s 12 hours a week is under the 20-hour line. The two largest contracts are still held personally, and one engineer holds manufacturer approvals the others do not.
Adjustment file
Personal motor costs of £6,400 are owner invoices, and a buyer is likely to accept them. The lease-dispute cost of £8,200 is a single invoice, and a buyer is likely to accept it if it does not repeat. The £65,000 manager cost is an assumption, not a quoted salary, and a buyer is likely to ask for a quote.
Largest contracts
| Client | Renewal | Notice | Relationship |
|---|---|---|---|
| Northfield Borough Council | Annual, in the story | Three months | Owner |
| Meridian Logistics Ltd | Annual, in the story | Three months | Owner |
Proceeds comparison
At 3.5× the price is £989,100. With a 20% seller loan the owner receives £791,280 at completion and £197,820 over five years. Coverage on the buyer’s debt is about 1.40×, below the 1.5× line. At 3.0× with no seller loan the owner receives £847,800 at completion, and the 3.0× rows in the buyer pack clear that line.
- The owner remains the relationship on the two largest contracts.
- One engineer holds manufacturer approvals the rest of the team does not.
- About 28% of revenue is still one-off project work.
- Prices toward the top of the indicative range do not meet a 1.5× coverage test under the stated loan assumptions.
- Vans and test equipment are assumed to need the £18,000 maintenance capital expenditure. A buyer would ask for the asset list. It is not in this illustration.
- The fictional company approval has a renewal date a buyer would diary. No real certificate is referred to.
Nothing on this page is offered as evidence about a real firm.