Extreme Karts needs a competitive driver

5:00 AM Saturday August 22, 2015 Colin Taylor

Elevated view of Extreme Indoor Karts track at 82 Kerwyn Drive, East Tamaki. three karts racing.

The Extreme Indoor Karts in East Tamaki, the only two level kart track in the country, is being offered for sale as a going concern business with significant growth potential.

“The asking price for all the assets is negotiable,” says Rudy Kokx of Link Business Broking Ltd, Ellerslie, who is marketing the business within leased premises at 82 Kerwyn Drive – only a 10 to 15 minute drive from the Auckland CBD via the Highbrook State Highway 1 on-ramp.

The business has been running from the same location since 1997 with the present owners having operated the business since 2008.

“Extreme Indoor Karts is in the entertainment industry and is owned by a small group of five investors,” Kokx says. “Most of them previously worked in this business before acquiring it. “The venture has been a good little earner for them generating current sellers’ discretionary annual income of $235,000 but, after almost seven years, they feel it is time to free up the invested capital.

“Although a niche business, there is minimum input from the owners and it would benefit from having a working owner, possibly with a technical background and with the drive to grow the business - building on its current success.”

Kokx says Extreme Indoor Karts is easy to run and an exciting industry to be in. “There is plenty of scope for growth including through more intensive marketing, targeting functions and events combined with kart racing; and creating programmes to encourage racers to come back on a more frequent basis.”

The current owners took over just before the global financial crisis (GFC) but the business still performed solidly during the economic downturn, despite competition. Initially four indoor go kart racing tracks were operating in Auckland but two of the competitors have closed and the one remaining track is an electric powered karting facility.

“Extreme Outdoor Karts is the only remaining indoor kart track with the excitement of real racing karts powered by proper petrol engines,” Kokx says “No other competitive racing facility exists in the Auckland and Northland area. A drift racing track is operating but it attracts a different market of customer.

“Extreme Indoor karts will always have an advantage with the real petrol heads,” he says. “The perception seems to be that: if a person likes go-karts but doesn’t like the buzz of speed, they will choose electric karts; however, the more adventurous customer who loves speed, a challenge, noise from an engine and who is competitive will probably choose Extreme Indoor Karts.

“The internal ramp which is a feature of this business, extends the floor space from 1840 square metre to 2600 square metres which has a significant impact on the customer experience. A flat track can be built anywhere but the ramp has impact on how drivers approach the track.”

Extreme Karts, 82 Kerwyn Drive, East Tamaki - floor level view of track and karts racing.jpg

Two karts race up the ramp at Extreme Indoor Karts track at 82 Kerwyn Drive, East Tamaki. 

He says the profitability of the business has risen in recent times due to the failure of competitors and the improved economy.

“Extreme Indoor Karts’ competitive advantage is its indoor two level race track facility and a lean business model developed over an extensive trading history. The two level facility provides a vast increase in usable floor area with no extra lease expenses. As such the business provides a healthy return on investment for the owners.”

The business complies with safety standards regarding the track, customer safety and the karts itself are subject to regular Occupational Health and Safety (OSH) on-site inspections.

The hired facility contains a BBQ area along with some gaming machines. The machines, like pinball and computer racing games, are leased and a rebate is received as a portion of the takings. Also on site is an ice cream machine and drinks vending machine.

Kokx says while special events like birthday and stag parties are a growing side of the business, it would benefit from having a new owner-operator looking to expand profitability through more aggressive marketing, smart joint ventures, better use of the social media, a long overdue price review and strategic booking placement during peak demand periods.

“Extreme Indoor Karts has not done any extensive marketing campaigns in the past which has been a significant weakness and missed opportunity,” he says.

The business, with one working owner, employs one full staff member and 14 part time staff.  

The track is open seven days a week including public holidays, but excluding Christmas day and the day after New Year. Opening hours are 12 pm to 10 pm weekdays, 10 am to 10 pm weekends and public holidays.