FRP Advisory has granted YM directors an extension to 31 May to “allow for the directors to bring the company’s accounting records up to date”.
The accounts for holding company YM Group and Lettershop, neither of which are in administration, are also supposed to be filed tomorrow.
Pricoa has debentures over the company’s assets, but the administrators said they were seeking legal advice as to whether the security gives Pricoa fixed or floating charge security.
“Regardless of the state of the security, it is anticipated that Pricoa will suffer a significant shortfall in respect of their lending to the group,” FRP stated, and has put the likely return for the investor at 1%-2%.
The first administration reports relate to Pindar (Scarborough), YM Chantry and York Mailing.
The sites struggled with cashflow and ultimately ran out of road, despite YM Group receiving additional funding of £1m in January, and then a further £3.5m in February.
YM had also attempted to raise “substantial capital” by refinancing its plant and machinery using the Recovery Loan Scheme, “however this was not successful”.
Explaining the background, FRP referenced the impact of the Covid-19 pandemic on demand at the businesses.
“In addition to the continued uncertainty surrounding the pandemic, the company also suffered operational inefficiencies related to labour, supply chain issues and costs of undertaking new contracts.”
A fast track sale process stalled when a potential deal with Walstead fell through.
The reports also detail that outstanding pay, holiday pay, and pension arrears will be the subject of claims to the taxpayer-funded Redundancy Payments Service. HMRC is also expected to make a claim totalling £600,000.
Unsecured creditors are only likely to receive any payment via the so-called 'prescribed part', “if funds allow”.
Industry watchers have been left aghast at the scale of the collapse.
One print boss commented: “So it seems that Pricoa are owed £51m and will receive £2.4m, after having injected £4.5m only a few months before!
“This show how negligent they have been in understanding the financial situation and/or how management possibly duped them.”
Pindar Scarborough
According to the management accounts, Pindar had sales of £41.46m in the year to 31 May 2021 (2020: £47.67m), and made an operating loss of £121,000 (2020 operating profit: £613,000).
The total amount owed to unsecured creditors is £22.53m according to the FRP report.
Pindar Scarborough has unpaid pension contributions of £20,087, and employee arrears for pay and holiday of £316,279 that will have to be settled by the Redundancy Payments Service (RPS).
Walstead paid £2.1m for the Pindar plant and machinery it acquired.
Paper stocks were sold for £36,579.
Pindar Scarborough largest creditors
| York Mailing | £15.4m |
| Scarborough Borough Council | £555,585 |
| E.on UK | £531,324 |
| YM Chantry | £352,870 |
| Sappi Papier | £341,485 |
| Henkel | £219,011 |
| HMRC (estimate) | £200,000 |
| Schuite & Schuite Druckfarben | £169,204 |
| Valleycrown | £157,536 |
| Celloglas | £156,990 |
| David Samuel Management | £151,410 |
| Draefern t/a GI Group* | £148,763 |
| Perlen Papier | £123,557 |
| Lecta Paper UK | £109,604 |
Source: FRP Advisory
*GI Group provides staffing solutions and is not connected to Go Inspire Group
YM Chantry
Wakefield-based YM Chantry had turnover of £20.2m (2020: £26.78m) in the year to 31 May 2021 based on the management accounts, and made an operating loss of £2.6m (2020:operating loss £1.9m).
Unsecured creditors total £28.77m, according to the report.
Preferential claims of £197,000 are envisaged for pay and holiday arrears, and there are unpaid pension contributions of £33,000.
These claims, up to statutory limits, will be dealt with by the RPS.
Walstead paid £250,000 for the Chantry equipment it acquired at the beginning of the month, plus £105,000 for stock and raw materials.
YM Chantry largest creditors
| YM Group | £14.1m |
| Melwake | £5.39m |
| York Mailing | £1.99m |
| Pindar Scarborough | £1.59m |
| The Lettershop Group | £830,507 |
| E.on Energy | £668,019 |
| Regency Real Estate | £256,518 |
| HMRC (estimate) | £200,000 |
| Hammond Packaging & Logistics | £96,895 |
| UPM | £72,569 |
Source: FRP Advisory
York Mailing
Again, based on management accounts York Mailing had sales of £19.9m (2020: £26.1m) in the year 31 May 2021, and made an operating profit of £1.27m (2020: £2m).
Unsecured creditors are owed £9.74m.
Preferential claims of £177,914 are expected regarding employees’ pay and holiday pay arrears.
Walstead paid £1.55m for the York Mailing plant and machinery, plus £150,000 for stock including raw materials, unfinished work in progress, and packaging material.
The creditors’ list also confirms that Showcase Pallets, which blockaded the Elvington site in March in a desperate attempt to receive payment, is owed £56,064.
York Mailing largest creditors
| York Mailing (Holdings) | £5.8m |
| Sappi Papier Holding | £459,444 |
| E.on Energy | £414,668 |
| Coface Finanz | £235,534 |
| HMRC (estimate) | £200,000 |
| The Lettershop Group | £164,646 |
| UPM | £164,050 |
| Sun Chemical | £138,645 |
| Deerhurst Securities | £121,500 |
| Stora Enso UK | £96,375 |
| Palm Paper | £91,857 |
| Antalis | £85,193 |
| Henkel | £79,351 |
Source: FRP Advisory
