Fulfilment firm Prolog in administration
Thursday, November 29, 2018
Promotional Logistics has gone into administration after racking up substantial operating losses and losing a major customer.
The business, which trades as Prolog, offers services such as fulfilment and distribution, including point-of-sale material collation and kitting, and some printing.
At least one print management and marketing services firm uses the company for storage and fulfilment.
Joint administrators Rebecca Dacre and Simon Chandler of Mazars were appointed at the 618-employee business earlier this week, “following the withdrawal of financial support by a group company”.
Investment firm Caverswall Holdings held a majority stake in the firm.
Prolog operates from six units at the Sherwood Park industrial area in Annesley, Nottinghamshire employing 518 staff as well as additional agency workers, and also has a 96-staff contact centre in Sudbury.
A spokesman for Mazars said: “We were appointed administrators on Monday, and the business is continuing to operate as usual in the interim. No redundancies have been made and the administrators' first priority is to secure a sale.”
He said there had already been “a lot of interest” from potential buyers.
According to filings at Companies House, £34.8m turnover Prolog has not made an operating profit since 2013, and has racked up cumulative operating losses of more than £5.2m in the intervening period.
In 2013/14 Prolog began the implementation of a three-year plan to position itself as “the leading multichannel fulfilment partner for medium-sized retailers and manufacturers”. However, in its results for 2016/17 the firm admitted that the three-year plan “was not being achieved” and the actions taken to improve profitability had not had the desired effect. A new leadership team was put in place.
Parent Caverswall Holdings said in its own accounts that Prolog had also lost most of its ecommerce work for Mothercare, which put pressure on Prolog’s cash position while it sought replacement high-margin work. The contact centre side of the business was said to be profitable.
Prolog’s accounts to March 2018 have not yet been filed.
Other customers of the business include Avis Budget Group, British Airways, Cancer Research, Cotton Traders, and GHD.
Chandler, who is Mazars' head of restructuring services, said in a statement: “I would like to thank the staff and customers for their positivity and support at what is a very difficult time. We are seeking to engage with all stakeholders to find a way forward that minimises disruption and gives us the best chance of retaining the workforce.
“The customers we have contacted have been responding very positively, and this is in part due to the excellent service and commitment shown by the company’s workforce in the past. We will continue working with all parties to reach the most positive solution possible.”