Craig Johns and Jason Elliott of Cowgills were appointed as administrators of Wakefield-based H Charlesworth & Co Ltd – which traded as Charlesworth Press – on 8 August, just eight weeks after the business said it was merging with Padstow-based TJ Books to form Fortis Print Group.

TJ Books managing director Andy Watts told Printweek: “Following the unfortunate administration situation at Charlesworth, TJ Books have purchased all of the assets from the administrator and TUPE’d over all of the staff to TJ Books.

“This has allowed the business to continue to operate out of the Wakefield site. The business is grateful for the level of support it has received from its customers and supplier base during this period of change.”

He added: “We will now continue with plans to consolidate the majority of the manufacturing at the Padstow site.

“The business will trade as TJ Books Limited.”

Charlesworth produced a range of products including personalised books, books for self-publishers, school planners, and brochures. The business had previously entered a Company Voluntary Arrangement (CVA) in 2016, which it successfully exited in 2019.

Charlesworth managing director Mark Gray and the administrators at Cowgills were both approached by Printweek but had not commented at the time of writing but the notice of administrator’s proposals for H Charlesworth & Co Ltd – dated last Thursday (15 August) – was filed at Companies House yesterday and details the timeline of events.

The report noted that, following the company’s completion of its CVA it experienced an increase in work from the Covid-19 pandemic that resulted in “significant reputational growth and in turn, increased turnover and profits”.

To aid growth further, it utilised government financial support packages such as the Coronavirus Business Interruption Scheme (CBILS) and Recovery Loan Scheme (RLS), both of which were obtained from Close Brothers, which already provided an invoice financing facility to the company and held the benefit of a fixed and floating charge over the assets.

The company also operated machinery and equipment that was subject to asset finance agreements with Close.

However, the business began to struggle during 2021, when the UK formally left the EU and mainly overseas customers were lost to EU-based competitors, resulting in “a significant reduction in the company’s turnover”, with additional UK customers acquired not fully replacing the lost revenue.

The energy crisis in 2022 caused further additional issues, with the company's monthly energy bills increasing by almost 700%, and the company was left paying increased bills for almost six months.

In early 2023, Charlesworth acquired the business and assets of Gecko Direct Ltd from that company’s administrators in a pre-pack sale. While it was estimated this acquisition would result in additional turnover in excess of £4m per annum, this did not transpire due to a number of staff leaving the business and a delay in the operations being moved by six months, according to the report.

It was eventually determined that the costs of the acquisition outweighed the actual financial benefits and had added to Charlesworth’s “already considerable financial difficulties”.

Other subsequent issues included liabilities to HMRC. The business was able to successfully agree a time-to-pay arrangement with HMRC but maintaining payments became a struggle due to its other historic liabilities and operating costs.

Attempts to find further investment proved unsuccessful as the company’s net losses had also increased, which is why Charlesworth decided to seek advice from Cowgills, who determined the business was “irrecoverably insolvent and could not continue to trade in its current form, without a significant cash injection”.

Following a notice of intention to appoint administrators on 5 August, discussions were held with Close in respect of the intended strategy, as it was considered that there was the strong possibility of achieving a sale of the business and assets and preserving the employment of the existing workforce. 

Johns and Elliott of Cowgills were subsequently appointed as joint administrators.

The report noted there was a company who had previously held discussions with the existing management team regarding a potential merger opportunity for the two businesses but, in light of the current financial position of Charlesworth, this party had confirmed that they were unwilling to enter into a transaction outside of a formal insolvency process. Printweek understands this refers to TJ Books.

Independent agent Robson Kay Associates marketed Charlesworth’s business and assets for sale for a limited period and sent an email to its entire database. 

A serious expression of interest was received from two third parties but they failed to follow up any interest with a formal offer.

TJ’s offer – originally for £60,000 but revised down to £50,000 after it received advice on the matter – was the only offer put forward. The deal was subsequently concluded for £50,000.

Following consideration of the options available, the administrators felt the pre-pack sale to TJ Books “maximised asset realisations” compared to a creditors’ voluntary liquidation.

It noted, though, that there would be insufficient realisations remaining following the associated costs of the administration for a return to become available to the company’s unsecured creditors.

As a result of the completed pre-pack sale and the estimated likely book debt collections, the overall asset realisations will enable a distribution to Close, as secured creditor, under its fixed charge.

It is anticipated to be repaid in full, in addition to a distribution to the secondary preferential creditors, who are estimated to receive 11.36 pence in the pound, although this amount may reduce if an increased claim is received from HMRC.

Among unsecured creditors, to which the estimated shortfall is £1,700,033, the trade and expense creditors total of £1,114,178 has been calculated using the figures contained in Charlesworth’s records.

The company has liabilities due to Close of £181,752 in respect of a CBILS and £46,667 in respect of an RLS.

According to accounts filed for the year ended 31 December 2023, Charlesworth’s turnover was just shy of £8.1m and it made a net loss after tax of £284,761.

A licence to occupy for Charlesworth’s premises in Wakefield has been granted, for an initial one-month period, to TJ Books.

Andy Watts and finance director Andy Adams acquired TJ Books in 2018, becoming co-owners of the company that was founded in 1969 and operates from a 7,700sqm site.