However, it found itself in a £230,000 wage and rent hole by the end of February, which ultimately led to its administration.

NGS Finishing Solutions, a company set up by NGS Print Finishers managing director Neil Sharp to purchase the business from the administrator, bought the business, which the report claims had grown to £6m turnover in "recent times", for £275,000.

PrintWeek has seen a copy of the administrator's report on the business, sent to creditors after the company went into administration at the beginning of the month.

The administrator's report said: "It was clear the company was in a parlous financial position with severe cashflow issues. With February's payroll due (totalling £130,000), plus two months' rent (around £50,000) due to the landlord together with amounts outstanding to HM Revenues and Customs."

According to the document, its accounts for the three months to 30 November 2010, just over three months before the administrator was appointed, showed it to have traded profitably.

The report stated: "No detailed review has been carried out on the company's trading activities in the period leading up to administration but it is apparent that the company was by then trading at a loss, suffering severe liquidity problems and technically insolvent."

Moore Stephens' decision to pre-pack the company came about because it would have had to have paid rent for the business if it had traded it in administration. If an immediate sale had not been completed, it would have had to have ceased trading and made all of the employees redundant.

According to the administrator, Sharp approached six companies within the print industry and two venture capitalists at the end of January 2011 to establish if they would be interested in acquiring the business, to no avail.