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Northwolds Richardson Group, which went into administration in August, had an estimated deficiency of just over £560,000 according to filings at Companies House.
The company’s statement of affairs was published earlier this month while the statement of administrator’s proposal, which laid out the background to the company’s demise, has gone online this week.
It said the business, which was incorporated in October 1978, traded from premises in Pocklington, York.
Gurdev Singh acquired the business in 2014 and as North Wolds Printers it produced litho and digital print for a predominantly Yorkshire-based client base, with its turnover in 2019 having grown from £1.25m to £1.8m.
In 2019, it also upgraded its main printing press and financed the upgrade with a hire purchase agreement with Investec, later refinanced through Close Brothers.
But the company’s order book was “decimated” when Covid-19 hit, with at least a year’s worth of work said to be lost.
“The knock on effects of Covid-19 also led to customers [accelerating] their move towards digitisation of their printed matter and this lead to the company’s largest client ceasing to produce printed materials,” the report stated.
The business also experienced financial difficulties due to the increasing energy costs, which increased its production costs significantly.
It decided to acquire local competitor Wood Richardson in May 2023, with the hope that this acquisition would help secure a better ongoing order book going forward. The directors used an invoice finance facility provided by Bibby Financial Services to finance the acquisition.
Presented publicly as a merger, the business became Northwolds Richardson Group.
However, the company’s turnover had not sufficiently recovered enough in recent months and the directors felt it could no longer continue to trade without additional finance, so they took steps to seek advice in relation to putting the company into administration.
Phil Clark and Dave Clark of Clark Business Recovery were subsequently appointed joint administrators of the company by the directors on 21 August 2024.
The report said that, prior to 26 June 2024, neither the company nor any of its directors had any professional relationship with Clark Business Recovery, its partners or staff.
Following the insolvency practitioners’ initial meeting with the directors, Steve Jones of Walker Singleton (Asset Management) was instructed to prepare a ‘sales pack’ to distribute to potentially interested parties, with a view to establishing whether the business could be rescued.
“A number of third parties expressed an interest in acquiring the customer list, IP and order book, with several others expressing an interest in the company’s physical machinery,” the report stated.
“My agent provided a deadline for best and final offers, which resulted in the acceptance of a provisional offer in the sum of £80,000 for the customer list, IP and order book.”
This offer was accepted, and a draft sales agreement was agreed by all parties, but on the morning of the proposed sale – 21 August 2024 – the prospective purchaser decided to withdraw.
“As the notice of appointment of administrators had already been signed by the directors, and there was no prospect of being able to continue trading without additional finance, it was agreed that the appointment of the joint administrators should proceed,” the report continued.
The administrators said that due to the late withdrawal of the offer for the customer list, IP and order book, the value in these assets had diminished. Steps were taken to contact the previously interested parties, and an offer was received from an independent third party in the sum of £10,000 plus VAT for the customer list, IP and order book.
The administrators’ agent advised that this offer be accepted, as any further delays “would likely result in these assets having no value”. It was subsequently accepted.
Printweek reported last month that the intellectual property was sold to AB Print Group.
Meanwhile, an inventory of the company’s plant and machinery was taken and the agent advised that the assets had an estimated to realise value of £40,000 – not including any assets subject to finance.
An offer was received from an independent third party for machinery that was subject to HP with Close Brothers – it was said to be in line with the settlement figured provided by Close Brothers, and resulted in the liability to Close Brothers being repaid in full prior to administration.
The sum of £37,499.16 was received by the company, representing the VAT element of the sale and confirmation of the outstanding balance owed to Close Brothers being paid was received by the company, and these funds were paid into the company’s bank account shortly prior to administration.
The remaining plant and machinery was made available for sale at auction in September and the sales generated totalled £82,775 plus VAT.
The kit included printing and finishing machinery from manufacturers including Heidelberg, Epson, HP, Muller Martini, Polar, Agfa, and Stahl, plus a range of storage, handling, and dispatching equipment, as well as IT and office items.
An estimate of the outcome of the administration indicated a potential dividend of 100 pence in the pound to the ordinary preferential creditors, while the secondary preferential creditors will receive a dividend of approximately 35 pence in the pound.
It was not anticipated that any surplus funds would be remaining for unsecured creditors following a distribution of funds to the company’s preferential creditors.
According to the report, the company’s estimated total deficiency as regards members was £561,792. Trade and expense creditors were listed as being owed £222,388.
The report also showed that the business had two CBILS loans – a £55,000 loan from HSBC and a £24,272 Funding Circle loan for Wood Richardson.
It also owed £60,000 in deferred payments to Wood Richardson, while also on the creditors list was JRP York Ltd – the renamed Wood Richardson – which was owed £84,272. 15 employees were shown as being owed £242,243.
Walker Singleton told Printweek last month that Northwolds Richardson Group’s staff were not part of the deal with AB Print Group.
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