The Nottingham-based group acquired the former Vertis-owned Olwen Direct Marketing Services last October with the hope of turning the business around, but it had continued to make "unacceptable losses" said chief executive Nick Dixon.

Dixon said Howitt had removed 2.4m of annual cost from the ailing business and had refinanced it, but performance remained unsatisfactory "partly due to the lack of investment by the previous owners and also due to a very high overhead structure".

The latest figures for Olwen to 31 December 2005 show a pre-tax loss of 2.5m (2004: 1.74m) on sales of 18.8m (2004: 21.5m). Dixon said that having explored "every alternative" administrator Harris Lipman was appointed to the 130-staff plant on Friday 26 May.

"We very much regret the effect on our people and suppliers in Croydon, however, by acting swiftly, we are ensuring that credit is not extended beyond the agreed creditor terms," Dixon said.

Elsewhere, there was positive news. Howitt Ltd, the groups main business in Sutton in Ashfield, increased its operating profits by almost 4% to 2.28m (2004: 2.2m) on sales of 40.3m in the year to 31 December 2005.

Its digital arm in Edenbridge, which it acquired last September, converted 2004s 87,000 loss into a 90,000 pre-tax profit on sales of 1.7m within a shortened nine-month accounting period.

Olwen Timeline
1982 Olwen founded by Peter Rivett
1997 Olwen sold to Big Flower (subsequently rebranded as Vertis)
4 October 2005 Vertis sells UK DM and fulfilment arms to acquisition vehicle Overgoal
24 October 2005 Howitt acquires Olwen and VMT from Overgoal
26 May 2006 Olwen placed into administration