The report to creditors and statement of proposals from joint administrators Philip Duffy and Benjamin Wiles at Duff & Phelps stated that unsecured trade creditors of some of the group companies could receive a payout.
However, the statements of affairs required for each company in administration had not been received from Callprint’s directors at the date of the report “due to the complexities of the group’s accounting systems being brought up to the appointment date”.
HMRC was owed £855,934 across the eight companies in administration.
Duff & Phelps said that unsecured, non-preferential creditors of Call Print Services, Premier Reprographics, Redwood Press and Call Print UK were expected to receive some form of distribution.
However, the joint administrators said that only the prescribed part (if any) would be available to unsecured non-preferential creditors of Call Print Group, and there was unlikely to be any return to creditors of dormant/non-trading operations Digital Printing Images, PPS Print Communications, or TR 1.2.
Major trade creditors included Xerox, owed £100,771 by Call Print Services; Antalis, owed £76,207 by Call Print Group; Canon UK, owed £54,000 by Call Print Services and Oce UK, owed £38,736 by Call Print Group.
Specialist insurance provider Playle Russell & Associates, which insures booksellers and thatched and listed buildings, was owed £66,677 by Call Print Services.
The SIP 16 report related to the pre-pack sale stated that the group had been loss-making since 2010, and its problems were exacerbated by the collapse of Carillion in January, which was described as a major customer. Despite cost-cutting measures, “turnover also severely declined resulting in a net loss of £408,000 in the year ending March 2018”.
Hobs acquired the business for £2.15m, made up of £1.91m plus the cost of covering the August payroll. As part of the deal Hobs acquired the book debts for £960,151, but a subsequent reconciliations resulted in £131,589 being returned to Hobs, making the total consideration for book debts £828,562.
Duff & Phelps also disclosed that it first became involved with the Callprint group of companies on 8 August, “following an introduction by Hobs in their capacity as a potential purchaser of the group’s business and assets”.
When the companies were marketed via an accelerated sale process, 517 potentially interested parties were contacted, of which 25 signed NDAs and accessed the data room. There were three subsequent bids: one of the offers was just for the Uxbridge site and was therefore rejected.
Of the two credible bids received, the deal put on the table by Hobs was preferred over an alternative bid for the entire group from ‘Party B’, understood to be Paragon, because the Hobs offer "would result in a better return to creditors of the group for a sum in excess of circa £250,000”, according to the report.
The Hobs deal also included Callprint’s 32% stake in US three-way venture Link Document Services Group, for £350,000 plus a commitment to meet the August payroll.
Advisers Navigant had said the value of the Link stake was likely to be between £506,000 and £810,000, but a forced sale in distressed circumstances would make the lower valuation more likely. The stake was also difficult to market due to the agreement in place between the three businesses that owned Link.
The digital and litho printing group was set up in 1992 by Alan Cheek. His son Steve Cheek subsequently took over the running of the business and was managing director at the time of the administration.
