Jonathan James Beard and John Walters of Begbies Traynor Central were appointed as administrators to Gemini Print Southern Ltd on 10 June.
The Shoreham-by-Sea, West Sussex-based business had closed on 3 June and the majority of its employees were made redundant with a skeleton staffing retained at the site in the short-term to complete existing commitments and orders.
According to the statement of administrator’s proposal, which was filed at Companies House late last week, the company traded successfully for a number of years, with annual turnover consistently around £15m.
“However, in 2020 the company began to experience financial difficulties due to the effects of the Covid-19 pandemic. Trading was significantly impaired throughout the pandemic due to increased economic uncertainty and legal restraints which were instated, whilst inflationary pressure brought about by the ongoing cost of living crisis resulted in increased rental and energy costs, which further reduced the company’s profit margins.
“The company struggled to recover from the financial difficulties experienced as a result of the pandemic, and a substantial debt owed to the company was then left unpaid, and is now the subject of legal proceedings. This exacerbated the cashflow problems already facing the company, and ultimately forced the directors to conclude that the company’s liabilities were unmanageable.”
The statement continued: “Despite the best efforts of the directors and management team to address the financial issues facing the company in recent months, they had no option but to seek professional advice, and the company was formally placed into administration by the directors on 10 June 2024.”
Gemini had an outstanding CBILS loan of £179,968 and a Recovery Loan Scheme (RLS) loan of £124,429.
The administrators said Gemini’s most significant realisable asset was its debtor book, which is subject to an invoice discounting agreement with Aldermore Bank.
The company had work in progress with an estimated value of around £200,000 that could be converted into notifiable book debts “with only the minimum of final printing, finishing and transport costs”.
With 113 staff already made redundant prior to the administrators’ appointment, according to the statement, the decision was taken that 13 members of staff would be retained by the administrators to assist with the final printing, finishing and transport of the work in progress and other ad-hoc tasks.
The administrators said the retained employees were made redundant as and when their services were no longer needed and that, by the start of July, only two of these members of staff remained.
The company had printing presses and associated kit that was financed through Close Brothers Asset Finance, including three Heidelberg litho presses.
Upon the appointment of administrators Close Brothers terminated its equipment finance agreements and instructed Exel Printing Machinery to dismantle, uplift and sell the financed equipment. This process is ongoing.
Gemini also held a raft of finishing kit, specialist mailing equipment, and an HP Indigo 7800 digital colour press financed through Compass Business Finance.
Upon the appointment of administrators Compass terminated its equipment finance agreements and sold the financed equipment to a third party for the sum of £214,000 plus VAT.
The company traded from five industrial units, all of which are subject to a lease. The administrators are negotiating with the landlord over rent payable while the finance companies remove their financed equipment.
A wide range of Gemini’s various unencumbered assets, including motor vehicles, fixtures and fittings, and other plant and machinery were sold via two online auctions managed by Eddisons. £85,870 plus VAT was achieved from the auctions.
Since the date of the administrators’ appointment, debts totalling approximately £1.26m have been collected.
While the directors have not yet finalised their statement of affairs, the administrators said they had been provided with sufficient information to prepare an estimated statement of affairs as at June 2024.
According to the report, the company’s estimated total deficiency as regards members was £6,170,075. Among the unsecured creditors, trade creditors were listed as being owed £3,309,531.
Based upon realisations to date and estimated future realisations, the administrators said there would be insufficient funds available to enable a dividend to be paid to the unsecured creditors.
Note: Gemini Digital Colour Ltd in Bridgend, South Wales has no connection with Gemini Print Southern Ltd based in Shoreham-by-Sea, West Sussex.
