Recently the focus of a £4m investment programme, the King’s Lynn plant of MPG Biddles has a kit line-up that includes a Kodak Prosper 1000 high-speed inkjet web, Timsons T-Press and T-Fold, Kolbus KM600 binding line and HP Indigo 10000 B2 digital press.
"To the best of our knowledge it was full steam ahead and they were pushing huge volumes through there, the digital kit was really working well," says one of the suppliers involved with this project.
Meanwhile, 50 miles away in Cambridge a brand new MPG printing facility – albeit not filled with brand new kit – also lies idle. And this plant is seen as the cause of the cashflow crisis that has resulted in the current hiatus at the group.
A further 300 miles away is the Bodmin plant that was the original basis of the group, formed in an MBO deal just over five years ago. That too is shuttered.
As PrintWeek went to press on 6 June, MPG Printgroup had been in limbo for more than a fortnight.
The fast-growing book and journal printer appears to be the latest in a line of companies that have failed due to over-ambitious expansion, and not keeping control of that most crucial of commodities – cash.
In MPG’s case, a major cost over-run at its new Cambridge facility seems to have pushed the group over the edge. The facility was set up on the back of a deal to take over the in-house printing operation at Cambridge University Press.
The details of the contract are not in the public domain, but it’s noteworthy that one print boss who also ran the rule over this potential opportunity didn’t progress it for a very simple reason: "We couldn’t see that we’d be able to make it a profitable standalone operation."
CUP’s decision to offload its print wing, which had a history stretching back more than 400 years, caused controversy in the locality at the time. Now, with the arrangement failing just a few months later, the university faces criticism from unhappy former employees who blame CUP for their current predicament.
This week the university told PrintWeek: "Throughout the contract to date, we have offered every support to MPG and we continue to do so. In the meantime we have secured alternative short-term printing for any time-sensitive publications."
In Bodmin, some of the workers are blaming the Cambridge workforce for having an "inplant mentality" and failing to meet expectations.
Things certainly didn’t go according to plan setting up the Cambridge factory, including issues with the floor and delays, or unrealistic expectations, in getting kit up and running. This resulted in costs overrunning by more than £1m according to one insider.
What’s not clear is exactly why things were allowed to get so badly out of control. MPG’s owners Tony Chard and Andy Simpson essentially ‘bet the farm’ on this move, and the disastrous outcome has left some rival print bosses mystified: "How on earth could they not be on top of what was happening, and how could it bring down the whole group?" says one.
However, Berforts Group managing director Gerald White takes a different view: "I predicted this would happen. They took on too much expenditure, too quickly. Their debt is equal to half their turnover. It simply wasn’t prudent to do what they did."
MPG’s two main banks, Lloyds TSB and HSBC, are now in the driving seat about what happens next. Other finance houses with an interest in the outcome include Close Brothers Asset Finance and City Business Finance.
Some sort of rescue of the King’s Lynn plant seems the most likely outcome, with CPI and Berforts tipped as possible third-party purchasers. Whether Chard himself could pull off a deal for King’s Lynn remains to be seen, especially given the likely scale of the bad debt MPG will leave behind.
Staff and suppliers are in limbo, customers have been left scrambling to find alternative printers, and the longer the current situation continues the less likely it becomes that there will be much left to salvage. As one print boss put it: "There’s £24m of work there. Who wants to pick it up? It may be better if the work goes around the industry at fair prices."
MPG timeline
July 2006 Management team at MPG Books – managing director Tony Chard and sales director Andy Simpson – announce they intend to buy the business from Martins Print Group
December 2007 The MBO deal is completed, after a delay caused by complications in unwinding the final salary pension scheme. The £9.4m- turnover company employs 160 staff
November 2008 Acquires Biddles assets in pre-pack deal. Chard says it makes the group the UK’s largest independently-owned book printer
April 2011 £3m spend on digital kit for Biddles including UK’s first Kodak Prosper 1000 inkjet press and Kolbus KM600 binding line
December 2011 Group sales are £19.4m
June 2012 Confirms takeover of Cambridge University Press print operation and agreement of long-term contract with the university for production of titles for European market. Chard says the deal will propel sales to £28m: "We’ll be number one by both volume and profitability by the time we have completed our programme of changes."
July 2012 Announces £4m investment in digital kit, including Timsons inkjet line and B2 HP Indigo for Biddles
December 2012 In consultation with 70 staff at Bodmin as it prepares to halve the size of that site in order to centralise mono and colour book production at Cambridge
March 2013 Cambridge plant supposed to be in full production, but isn’t
May 2013 MPG runs out of cash, staff sent home
June 2013 MPG in limbo
