The Bourne End firm, which trades as Colourpoint, went into administration in August with Simon Gwinnutt and Sajid Sattar of Greenfield Recovery appointed.
The administrators’ report said that the litho and digital printing business, which specialised in a wide range of bespoke printing services including box making, had grown steadily over the course of more than 25 years with sales reaching £5m, but had been badly hit by the pandemic when it suffered a drastic drop in sales.
To keep going, Colourpoint Litho made ten staff redundant and used support from the furlough scheme, and two CBILS loans from RBS and Funding Circle.
However, post-pandemic sales did not recover sufficiently or quickly enough and, by March this year sales were still only 60% of pre-pandemic levels.
HMRC was chasing PAYE and National Insurance arrears, and the business was under pressure to maintain its CBILS repayments, which were described as “considerable and unaffordable moving forward”.
HMRC was owed £223,021; RBS £552,400 and Lloyds Bank Commercial Finance £280,100.
“Work recently started to increase incrementally month by month and without the current levels of liability, the core business would be profitable,” the report stated.
The firm was renowned for its bespoke creative print work for luxury clients, and won two Printweek Awards for its high quality productions, including presentation boxes.
The Colourpoint business was marketed for sale over the summer, with 14 expressions of interest and two offers eventually received.
The preferred offer came from Colourpoint Group. It acquired the business on 10 August via a pre-pack sale and kept on 44 employees through Tupe transfer.
Colourpoint Group’s offer for the business and most of its assets totalled £260,000, with £160,000 paid on completion followed by 16 monthly payments of £6,250.
Colourpoint Group was incorporated in January 2021. It shares common directors with Colourpoint Litho in owner/directors Damian Dineen and Karl Hnat.
The rival offer would have involved liquidation and ‘a terminal insolvency event’.
Regarding the pre-packaged sale, the administrators stated: “This procedure is in our view the most appropriate to ensure a continuation of the business, enhance asset realisations over and above a liquidation scenario, and to preserve employment and avoid employees’ redundancy liabilities crystallising.”
Dineen and Hnat had not commented at the time of writing.
Editor's note: Colour Point Studio based in Bermondsey Square, London SE1, is not connected to Colourpoint Litho or Colourpoint Group.
