Rymack Sign Solutions, which trades as PFI Group, acquired the Works Manchester business a year ago in a deal worth nearly £3.17m.

The sale involved three small initial payments, which PFI paid, followed by an annual deferred consideration of £766,250 to be paid on the first, second, third and fourth anniversary of completion to make up the total.

PFI Group was supposed to make its first payment yesterday (31 May).

In an update to the stock exchange, AIM-listed Grafenia said: “The first installment of deferred consideration was subject to adjustment for any shortfall or excess in actual net assets on completion versus estimated net assets prior to completion. Following the preparation and agreement of completion accounts, the first installment of deferred consideration was adjusted to £514,223.

“PFI has yet to make payment of the adjusted installment which was due on 31 May 2023 and the company is in discussions with PFI to resolve the matter. A further update will be provided in due course.”

Shares in Grafenia fell by more than 7% in early trading.

CEO Gavin Cockerill told Printweek: “We are in constant dialogue with PFI and are expecting them to find a resolution.”

PFI Group has made a string of acquisitions in recent years. Earlier this month it abruptly shuttered its Futurama business, which subsequently went into administration.

PFI posted a loss because of the substantial writedowns related to Futurama. 

Last week, Printweek contacted CEO Darren McMurray about the current status of the group.

He said: “As you are aware, the PFI Group has expanded rapidly over the last two years with a series of acquisitions across varying sectors of the industry to provide a unique, multi-faceted ‘one stop shop’ offering to our customer base. 

“Furthermore, the group has been undergoing a strategic restructuring since Oct 2022, to align individual companies into the three distinct sub-groups; PFI Print, PFI Signs & Graphics and PFI Retail, resulting in a portfolio of strongly managed businesses with independent financial controls.”

Asked whether PFI was on track to make the Grafenia payment, McMurray said: “We are currently working this through with Grafenia.”

Works Manchester had sales of £4.15m in its most recent accounts, for the year ending 31 March 2022, and made an operating profit of £264,325.

In February PFI 1 Ltd, also incorporated in February, replaced Rymack Sign Solutions as the entity with significant control of Works Manchester.