The firm’s parent GPP Capital PLC is in administration and ultimate parent company Service Point Solutions in Spain has sought creditor protection.
Service Point UK provides reprographics and print management services via a nationwide branch network. It employs around 550 staff. Lloyds Bank has a charge over Service Point UK’s assets due to a cross-guarantee given by the Spanish company over its €71.9m (£59.5m) debt with the bank.
The director’s report stated: “… hence the directors are unable to control the strategic future of the business or the manner in which its assets are employed. This fact in itself imposes a significant limitation on the period over which the directors are able to consider the going concern status of the company.”
GPP’s administrator Ernst & Young is marketing the Service Point UK business for sale, with any deal likely to be complicated by its pension deficit, stated as £9.3m in the just-filed accounts.
Ernst & Young said there was no update on the sale process at present, although PrintWeek understands that a resolution to the situation is likely to be put in place this month.
“The going concern issues will drive the timeline on this,” said an industry source.
Service Point UK managing director Michael Barton-Harvey issued a statement, which said: “All parties involved are working exceptionally hard to support the best outcome regards the current situation.”
Competitor The Color Company, which acquired the assets of Service Point’s USA operations after that business was closed down last year, has been tipped as a possible purchaser for all or part of the business.
PrintWeek was unable to reach owner Elgin Loane for comment.
In the year to 31 December 2012 Service Point UK posted sales of £40.4m (2011: £44.9m). Although the firm said it maintained its gross margin of 39%, a nominal operating profit of £78,000 was wiped out by charges to the parent undertaking of £989,000 and a £2.2m write-off of intercompany receivables due to the impact of the bank calling in its debt.
The firm also spent £652,000 on restructuring its operations, which included closing three sites and reducing headcount by 70. The bottom-line loss was £3.5m.
However, the report stated that subsequent trading in 2013 has resulted in a £1m-plus improvement in operating profit at the firm