News: Garnett Dickinson downed with £25m pension deficit
Problems with an investment in a new press led to the administration of Rotherham print group, Garnett Dickinson, documents reveal.
And the administrator's proposals also show a pension scheme deficit of £25m listed amongst the unsecured creditors.
Jonny Marston and Howard Smith of KPMG, were appointed as joint administrators to the business on January 24 2017 after the business ran into cash flow difficulties due to operational issues.
The joint administrators confirmed that Garnett Dickinson was sold in a pre-pack deal to GD Web Offset Limited, a vehicle incorporated for the purposes of the acquisition.
Based in a £20m state-of-the-art facility in Manvers, the group specialises in large run multi pagination printing and customers include high profile monthly magazines and luxury catalogue brands.
Garnett Dickinson Print Ltd had a turnover of £17.2m and made an operating loss of just over a £1m in the year to September 30 2015. KPMG highlighted that the financial position of the business deteriorated due to the poor performance of a newly installed printing press.
KPMG stated: "The Group invested in a new press in September 2016 to provide increased capacity, however operational issues encountered during the installation and subsequent use of the press resulted in high levels of outwork, overtime, paper usage and production overheads that were not sustainable. As a result of the operational issues, losses of approximately £1m were made in the first quarter of FY17 and this resulted in acute cash pressure.
"The directors of the Group were forced to enter into discussions with key suppliers, HM Revenue & Customs, its landlord and the Secured Creditors as the Group was struggling to generate sufficient working capital to continue trading."
Previously a board member, Nicholas Alexander bought Garnett Dickinson Group, with the exception of its digital operation, for an undisclosed sum in 2015 and instigated a restructure of the operations.
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KPMG was engaged by the group in December 2016 to provide advice on options for restructuring its defined benefit pension scheme following a meeting with Alexander.
The cash pressures led to an exploration of options available in respect of investment, refinance or a sale, and to run an accelerated mergers and acquisition process. No offers were received for the Group so six trade competitors were identified and contacted regarding the opportunity.
GD Web Offset Limited was the only offer to come forward and the deal saw all of the trading business and assets sold to the new company whose directors are Paul Mursell of EWO Media in Essex and Jeremy Spring of Aspenlink, a company that converts some twenty five thousand tonnes of paper a year.
KPMG documents show that three connected Garnett Dickinson companies have left a shortfall of £29m, including a £25m pension deficit and £4.1m owed to trade creditors including finance providers RBS and Lombard.
The documents show that KPMG has been "liaising with the trustees of the defined benefit pension scheme, the Pensions Regulator and the Pensions Protection Fund concerning the changes caused to the pension scheme as a result of our appointment."
Accounts filed at Companies House for 2015 describe the defined benefit pension scheme as having a £6m deficit. The scheme was closed to future accrual in 2009 with no further contributions made by the company. A defined contribution scheme was set up and the company entered into an agreement to make good the deficit on the group pension scheme.
The original Garnett Dickinson business started in 1858 in the back of a busy stationary shop where it first published the South Yorkshire Advertiser. The Rotherham Advertiser is now published by Regional Media Ltd, a company which also has Alexander as a director and acquired the publishing business and assets from Garnett Dickinson in 2015.
Garnett Dickinson website
Images: Garnett Dickinson
And the administrator's proposals also show a pension scheme deficit of £25m listed amongst the unsecured creditors.
Jonny Marston and Howard Smith of KPMG, were appointed as joint administrators to the business on January 24 2017 after the business ran into cash flow difficulties due to operational issues.
The joint administrators confirmed that Garnett Dickinson was sold in a pre-pack deal to GD Web Offset Limited, a vehicle incorporated for the purposes of the acquisition.
Based in a £20m state-of-the-art facility in Manvers, the group specialises in large run multi pagination printing and customers include high profile monthly magazines and luxury catalogue brands.
Garnett Dickinson Print Ltd had a turnover of £17.2m and made an operating loss of just over a £1m in the year to September 30 2015. KPMG highlighted that the financial position of the business deteriorated due to the poor performance of a newly installed printing press.
KPMG stated: "The Group invested in a new press in September 2016 to provide increased capacity, however operational issues encountered during the installation and subsequent use of the press resulted in high levels of outwork, overtime, paper usage and production overheads that were not sustainable. As a result of the operational issues, losses of approximately £1m were made in the first quarter of FY17 and this resulted in acute cash pressure.
"The directors of the Group were forced to enter into discussions with key suppliers, HM Revenue & Customs, its landlord and the Secured Creditors as the Group was struggling to generate sufficient working capital to continue trading."
Previously a board member, Nicholas Alexander bought Garnett Dickinson Group, with the exception of its digital operation, for an undisclosed sum in 2015 and instigated a restructure of the operations.
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KPMG was engaged by the group in December 2016 to provide advice on options for restructuring its defined benefit pension scheme following a meeting with Alexander.
The cash pressures led to an exploration of options available in respect of investment, refinance or a sale, and to run an accelerated mergers and acquisition process. No offers were received for the Group so six trade competitors were identified and contacted regarding the opportunity.
GD Web Offset Limited was the only offer to come forward and the deal saw all of the trading business and assets sold to the new company whose directors are Paul Mursell of EWO Media in Essex and Jeremy Spring of Aspenlink, a company that converts some twenty five thousand tonnes of paper a year.
KPMG documents show that three connected Garnett Dickinson companies have left a shortfall of £29m, including a £25m pension deficit and £4.1m owed to trade creditors including finance providers RBS and Lombard.
The documents show that KPMG has been "liaising with the trustees of the defined benefit pension scheme, the Pensions Regulator and the Pensions Protection Fund concerning the changes caused to the pension scheme as a result of our appointment."
Accounts filed at Companies House for 2015 describe the defined benefit pension scheme as having a £6m deficit. The scheme was closed to future accrual in 2009 with no further contributions made by the company. A defined contribution scheme was set up and the company entered into an agreement to make good the deficit on the group pension scheme.
The original Garnett Dickinson business started in 1858 in the back of a busy stationary shop where it first published the South Yorkshire Advertiser. The Rotherham Advertiser is now published by Regional Media Ltd, a company which also has Alexander as a director and acquired the publishing business and assets from Garnett Dickinson in 2015.
Garnett Dickinson website
Images: Garnett Dickinson
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