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The UK printing industry now comprises fewer than 10,000 operating businesses – some would even put that figure as low as 5,000. This is a big fall from just ten years ago when UK government figures pointed to 18,000 businesses.
The recession has seen businesses finding it very difficult to raise the finance to fund investments meaning that print orders are reducing and those that remain have shorter run lengths.
Some have closed because prepress has become part of what the printer or the customer does. Elsewhere, finishing tasks are being brought in-house, reducing the requirement for bindery businesses. Further factors include the different options offered by digital communications such as the internet and email. There are also growing concerns over impacts to the environment. Consequently, the number of people employed in the sector has also reduced from almost 200,000 to 80,000 in the last decade.
These numbers are expected to shrink further as a result of the economic conditions. Few printers make large profits because the market is saturated and there are too many businesses offering the same services that has driven down prices and pushed some companies to the brink. One such company was the printing firm Synergie Group Plc.
The company, formerly with facilities in Basingstoke, Redditch, Newbury, Solihull and Saltash, specialised in marketing and promotional material and at its peak had an estimated annual turnover of £6.5 million. But as demand declined, the company entered and then failed to adhere to its Company Voluntary Arrangement (CVA) as it could not reach an agreement with one of its major creditors that supplied finance in respect of certain equipment.
Nationwide Insolvency Practitioners SFP was appointed on 25th February 2013, and joint administrators Simon and Daniel Plant traded elements of Synergie’s Basingstoke operation up until 5th March to allow for a potential purchaser of the business and assets to be sought. The trading period allowed most existing work to be completed and invoiced, and even some new projects to be taken on and finished, but unfortunately no purchaser for the whole business as a going concern was found and certain of the assets of the company were subsequently sold on an ex-situ basis. In relation to the firm’s Saltash site however, a buyer for the business and assets was successfully sourced on a going concern basis.
From the Joint Administrators initial review, it was established that prior to SFP’s appointment, certain parts of the Synergie Group’s business and assets had been sold to third parties. Asset valuers, therefore, were instructed to attended several sites in order to carry out an inspection of the tangible and intangible assets of each of the various businesses that had previously traded under the company’s umbrella. Meetings were held with each of the pre-appointment purchasers and certain deficiencies in the formal agreements in relation to the original transfers were identified. This meant that further legal documents were drafted by direction of the Joint Administrators, to regularise the positions. This proved a beneficial task and aside from clarifying certain terms, the joint administrators also achieved accelerated payment terms to those originally agreed upon. All of the pre-appointment transfers were updated and re-drafted, and payments in respect of these are being paid to the administration estate account.
“The print industry has been in continual decline in recent years,” says Simon Plant, Group Director at SFP. “This is partly due to the current economic climate but also due to substantial competition from Eastern Europe and the Far East as well as an increase in online usage. Unfortunately, Synergie Group Plc also suffered bad debts from a number of its customers that further impacted its own cash position.
“We have successfully negotiated a sale of certain parts of the business and all tangible assets.”