Paul Meadows and Matthew Cowlishaw of Teneo were appointed as joint administrators of BCQ Group on 14 August, with the pre-pack sale of its business and assets to Bidco 123 – now renamed BCQ Solutions – taking place on the same day.
BCQ Solutions is owned by William Pollard & Co, based in Exeter, which trades as Pollards.
Despite sales at BCQ returning to pre-Covid levels at about £12.3m in the financial year ending 31 March 2023, the family-owned Buckingham business was also struggling with its debt burden having taken out two CBILS loans totalling £900,000 in 2021.
The administrators’ proposal states that things came to a head for BCQ in July, when HSBC Invoice Finance (HIF) began an audit of its debtor book. This identified that it was over-advanced to the tune of £323,362 on a £1.48m facility.
BCQ’s £150,00 overdraft, also with HSBC, was overdrawn by nearly £420,000.
As a result HIF put an immediate stop to any further drawdowns and HSBC Bank stopped all payments while it tried to find out more about the situation.
The cash crunch resulted in the instigation of an accelerated sale process that involved approaching 31 potential buyers, but the only remaining party that was considering a solvent purchase withdrew on 4 August.
On the same day, BCQ Group’s directors began the process of placing the company in administration and filed a Notice of Intention to Appoint Administrators.
The ongoing sale process then resulted in three firm offers for BCQ’s business and assets.
The group offered a range of services spanning creative production, high-quality print, large-format printing, mailing, and warehousing and fulfilment.
Teneo stated: “The information provided to the parties approached was limited as the timeframe restricted the board’s ability to produce all the information that would be desirable in a longer process, and furthermore the company’s finance director was not available through this period.”
The Pollards offer was for a total of £3,028,185.
The was made up of £2.45m for BCQ’s freehold property, which was on its books valued at £2.95m.
In addition, the Pollards consideration involved £278,357 for unencumbered plant and machinery; £17,000 for motor vehicles; £49,993 for stock and work in progress; and £7 for a variety of other items including goodwill, data assets, sales records and the company name.
The deal excludes debtors and certain leased assets.
Pollards paid £823,185 on completion with the balance payable within 10 weeks pending completion of debt financing against the property.
However, none of BCQ’s creditors, secured or otherwise, will be paid in full. HSBC Bank is owed £2.56m, while HIF is owed £1.8m.
BCQ Group chairman and majority shareholder Richard Knowles had provided HSBC with two personal guarantees, capped at £90,000.
Some 67 unsecured creditors are owed an estimated total of £1.83m, and Teneo said there was “no prospect of a distribution” for them.
The full Statement of Affairs was not available at the time the Teneo report was finalised on 21 August. BCQ Group directors have been given until 5 September to provide the administrators with the information.
Pollards is one of the oldest printers in the country and was established in 1781.
Commenting at the time the deal was agreed, Pollards managing director Dave Mace said: “We have been hugely impressed by the outstanding print solutions and talented team evident at BCQ.
“Bringing our businesses together will provide a strong platform for future growth and we are very excited at the prospect of working with the BCQ team going forwards.”
