Efforts are underway to sell Sunline Direct Mail as a going concern after the firm’s owner filed a notice of intention to appoint an administrator.
Industrial holding company CEPS PLC owns an 80% stake in the Loughborough company, with the other 20% held by management.
CEPS said that Sunline had been coping with “the continued gentle downturn” in demand for direct mail polywrap, but had then been hit by the double-whammy of the plastics backlash following the broadcast of Blue Planet II, and a fall-off in demand due to the introduction of GDPR.
“As a result, the order book is not filling at the rate that management would expect it to at this time of year for the ‘golden period’ from August to November and the business is likely to require significant amounts of additional funding to move forward,” CEPS said.
Sunline Direct Mail had sales of £6.7m last year, a decline of almost 16% on the prior year. It reduced its operating losses from £352,000 to £60,829. At 31 December 2017 the firm’s net liabilities were nearly £2.6m. It employs 122 staff.
Services include mailing and polywrapping, data management, paper envelope enclosing, pick and pack, and response handling.
It has worked for clients including JD Williams, Boden, Jacamo and Nauticalia.
The firm operates 24/7 and also offers fulfilment services to the fast-growing e-commerce sector. At the end of last year this part of the business was expanded and spun off as a separate division, Cync, located in a 7,432sqm facility on the outskirts of Nottingham.
However, this contributed to Sunline’s financial difficulties as the move involved unexpected additional costs and there were initially some operational issues at the new site.
Moorfields Advisory has been appointed to advise on the accelerated sale process in the hope of finding a buyer to take the business on as a going concern – either as separate entities, or as a whole.
Sunline chairman Nigel Maybury told PrintWeek: “My strong hope is that someone will come along and see the potential in this facility. This is a 40-year-old business with great skills. What we need at this time is a trade partner, not a financial partner.
“We’ve kept our employees and customers fully-informed and everyone is on side,” he added. “We are doing our utmost to do everything properly.”
Maybury categorically ruled out any management involvement in a pre-pack.
Industry sources have pointed to the highly-acquisitive Paragon Group as a potential buyer. A spokesman said the group had no comment to make at this time.
CEPS has turnover of £23.6m and also owns Nottinghamshire fabric, wallpaper and carpet sample book specialist CEM Press, along with a number of other non-print businesses.
The filing of a notice of intention to appoint an administrator means that Sunline is protected from any enforcement action by the firm’s creditors and can continue to trade as usual while it is marketed for sale.