Global MP failure leaves huge shortfall

10 September 2014

Receivership & administration

Global MP has left a total shortfall of more than £13m, with trade suppliers among some of the hardest hit by the firm’s collapse.

Unsecured creditors of the Bradford-based direct mail printer are owed £9m. Christopher Ratten and Jeremy Woodside, the joint administrators at Baker Tilly said in the report: “There is no prospect of a return to unsecured creditors in this instance.”

Chief executive and sole director Kevin Dunstall acquired the firm from St Ives in September 2013, via his Cogent B2B business. It went into administration at the beginning of July 2014, just nine months later.

According to the administrators’ report, Cogent B2B owed Global MP £3,786,634. This was to meet Cogent B2B’s “consideration and acquisition costs”.

The joint administrators stated: “The anticipated recovery is uncertain at present" and it is shown with a nil estimated recoverable value in the report.

A further £721,475 was owed to the business by another Dunstall company, Global MP Mailing.

Global MP Mailing, the former Prospect Mailing Services business, has now been placed into liquidation. It has an estimated total deficiency of £1.3m, which is separate to that of Global MP’s.

In a further twist, Prospect Mailing Services is listed as owing Global MP £285,000.

The Global MP creditors’ list also includes a number of trade suppliers owed six- and seven-figure sums.

As had been expected, paper suppliers were among the suppliers with the largest exposure to the business, with Global MP owing more than £2.7m to the paper trade overall.

Of this, SCA had the largest single debt at £1.2m. Paper merchant Paperlinx (via Rothera & Brereton) was owed £562,041.

The joint administrators said the report represented an estimated statement of the financial position of the company, as they had not received a statement of affairs.

Local print firm Bahson Colour Print is owed £123,026 while Belgian gravure printer Helio Charleroi, part of the Circle Printers Group, has an outstanding debt of £174,968.

St Ives is the single-biggest creditor. It is still owed £4.2m of the original £8m Dunstall agreed to pay for the business. Although St Ives had a fixed and floating charge over this amount this ranked behind other charge holders and no funds are available to cover the debt.

St Ives point-of-sale subsidiary SP Group is owed a further £67,323.

Global MP was owed a VAT refund of £267,543 at the time it went into administration, but this will be offset against an outstanding PAYE liability of £400,408.

According to figures from draft accounts included in the report, Global MP made a loss of £3.6m on sales of £40.4m in the year to 2 August 2013. There is no detail on the reasons for the loss, which represents a major deterioration on the prior year’s trading when it had generated a net profit of £866,175 on sales of £35m.

The firm’s total estimated deficiency is £13,047,785.

Global MP selected creditors

St Ives £4.2m

SCA Paper £1.2m

Rothera & Brereton £562,041

Stehlin Hostag Ink £467,836

Canon UK £436,775

Sappi UK £292,652

Imex Printing Inks £216,055

Stora Enso UK £209,665

Helio Charleroi £174,968

HP (Hewlett-Packard) £153,765