Printing industry firms will be among thousands of suppliers counting the cost after this week’s dramatic collapse of outsourcing giant Carillion.
Carillion went into liquidation yesterday (15 January), sending a shockwave across its supplier base, which is estimated to be owed at least £1bn spread across some 30,000 companies around the country, many of them SMEs.
Birmingham headquartered large-format printing specialist Hollywood Monster had been a supplier to Carillion. In a social media post yesterday, chairman Tim Andrews said it was a blow both to the business and to his personal finances: “Not a great day so far! Carillion going bump. £250k a year client for HM and I’ve got £10k of shares. At least the sun is shining… oh it’s not sunny either,” he said.
Andrews was not available for further comment at the time of writing.
The diverse spread of Carillion’s business interests mean that a variety of print suppliers are likely to be affected, as the group’s print requirements spanned construction site hoardings (see below) to vehicle graphics, signage and general commercial print collateral.
Check out the new vinyl wrap around our site cabins on the #Fallowfield project to build student accommodation at @OfficialUoM. Our wrap creates a scenic view for the students, what do you think? @OPNewBuild #Manchester pic.twitter.com/WTFCUcm9nb— Carillion plc (@Carillionplc) December 27, 2017
There are fears that hundreds, or even thousands, of small sub-contractors and suppliers to Carillion could fail as a result of their bad debts with the group, and banks are already scrambling to find out about the likely knock-on impact among their SME customers.
One relieved print boss told PrintWeek: “We happily had no exposure. Our bank came on to us early today to ask about our exposure so I assume there is a world of pain out there.”
The managing director of one non-print SME supplier to Carillion, Andy Bradley of Flora-tec in Cambridge, appeared on BBC radio 5Live’s Wake up to Money programme this morning.
He said he had already had to lay off some of his staff as a result of Carillion’s collapse: “We are owed £800,000 which will leave a massive black hole in our accounts. Even last year the government continued to give Carillion contracts, and that said to me that the government had done its due diligence and we could take some comfort from that.
“Then the sucker punch came yesterday, and I had to make ten people redundant.”
BPIF chief executive Charles Jarrold said the situation was deeply concerning: “One of the things that struck me is that Carillion were notorious for being slow payers, and I have to wonder what the government is doing contracting with companies that are late payers, in particular to SMEs. This has been a failure all round. On the face of it this is exactly the sort of problem that everyone is concerned about.”
Jarrold said he had not been contacted by any BPIF members regarding Carillion so far.
Business secretary Greg Clark has asked the official receiver to undertake a fast-track investigation into the failure of Carillion.