Cashflow crisis hits MPG
Thursday, May 23, 2013
The trading status of book and journal printer MPG Printgroup is unclear.
Administrators from Zolfo Cooper are understood to be on-site at the firm, which was formerly known as MPG Books.
However, there has not yet been official confirmation that the business has gone into administration.
A source close to the situation said that while administrators were on-site, they might not be officially appointed until Tuesday, after the bank holiday weekend.
MPG has plants in Bodmin, King’s Lynn, and recently opened a new plant in Cambridge following its takeover of the Cambridge University Press (CUP) printing operation last year, which resulted in a major restructuring of the group’s manufacturing sites.
Chief executive Tony Chard was unavailable for comment at the time of writing, and the company’s phones were diverting to an answerphone service.
The takeover of the CUP facility, and the resulting costs involved with relocating equipment and setting up a new MPG plant in Bar Hill, Cambridge, appears to have resulted in a cash crisis at the company.
Nigel Gawthrope, FOC at the Cambridge site, said: "There was a £500,000 budget to set the factory up, and it actually cost £1.7m. They didn’t allow enough time for the machines to bed in and go into production.
"We knew there was a bit of a cashflow problem, but we thought it had turned the corner," he added.
Cambridge University Press operations director Sandra Waterhouse issued a statement this morning on behalf of the publisher.
She said: "The management team of MPG today announced it is to go into administration. In July 2012 Cambridge University Press placed a large proportion of its UK printing with MPG Books Group. The agreement also saw the Press’s in-house printing department, and most of the staff, transferred to MPG.
"This transfer was undertaken in good faith and, as well as allowing the publishing groups the flexibility they need, was seen as a way of securing continued employment for staff otherwise facing redundancy through the potential closure of the Press's printing operation.
"Throughout the contract to date we have offered every support to MPG and we are sorry that the business is now facing administration as a result of cash flow problems. Our production directors are considering what this means for our production requirements and will be taking steps to minimise the immediate impact."
At the same time as setting up the new Cambridge facility MPG was also carrying out a £4m investment plan that involved a new Timsons T-Press and HP Indigo 10000 B2 digital press for its Biddles site in King’s Lynn.
Just three months ago Chard said the group was "still highly acquisitive" and planned to use its revamped manufacturing platform to expand its services into "book-like products".
It was also poised to invest in high-speed colour inkjet technology with KBA, HP and Kodak in the frame as potential suppliers.
Its most recently-filed results are for the year to 31 December 2011, so exclude the major restructuring carried out over the past 18 months. In 2011 the business made a pre-tax profit of £813,000 on sales of £19.4m and had 238 employees.
Check printweek.com for updates on this story.