Essex-based Interact Marketing Services, which traded as Printwize, went into administration over the summer.
The business was originally established as a sole trader in 1971 and became a limited company in 1976.
Pre-pandemic, directors Roger and Christine Wacey had navigated a serious setback to the business in early 2019 when the firm’s managing director and sales director left to work for a rival.
According to the report from administrators Glyn Mummery and Julie Humphrey from FRP Advisory, this resulted in the loss of 60% of Printwize’s customer base, with turnover dropping from £225,000 per month to £80,000 per month.
“Whilst compensation was later paid by the individuals concerned, it was not sufficient to make up for the company’s losses and the business struggled to recruit suitable replacements,” FRP said.
By the time the pandemic hit in March 2020, sales at the Witham litho and digital print firm had been rebuilt to around £160,000 per month, but the business was badly hit by the impact of Covid-19.
“The business was severely restricted following the pandemic and [the Waceys] sold their family home and loaned the company in excess of £500,000 to assist cash flow,” the administrators stated.
The Waceys, who had hoped to retire more than a decade ago, had also not taken any drawings since 2019.
Some of the firm’s clients ceased trading due to Covid-19, and the uncertainty and rising costs resulting from the war in Ukraine left the business struggling and no longer viable.
Printwize was marketed for sale, with two offers received.
However, FRP said that it became evident that a better return for creditors could be achieved if the business ceased to trade and its assets were sold on the open market.
According to the statement of affairs Printwize has an estimated total deficiency relating to creditors of £416,850.
Trade and expense creditors were owed £297,492; employees redundancy and notice pay was £158,823; the directors’ loan was £543,950 and there was a hire purchase shortfall of £47,150.
Secured creditors Barclays and Skpton Business Finance are expected to be paid in full, as are preferential and secondary preferential creditors.
There is also expected to be a distribution to unsecured creditors.
