News | IRISH PRINTER
693 JOBS TO GO
AS PAPERLINX’S BRITISH SITES CLOSE
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number of Paperlinx UK businesses went into receivership this month, with 693 of the company’s 1,200 UK staff being made redundant, as well as the prospective closure of the company’s sites. Deloitte were called in to administrate the businesses involved on April 1st. The appointment relates specifically to Paperlinx UK’s paper and visual technology solutions businesses, comprising the following principal trading companies: Robert Horne Group Ltd; Howard Smith Paper Group Ltd; The Paper Company Ltd; and Paperlinx Services (Europe) Ltd. In addition, a number of non-trading holding and subsidiary companies have entered administration. These are: Paperlinx (Europe) Ltd; Paperlinx Investments (Europe) Ltd; Paperlinx Brands (Europe) Ltd; Paperlinx (UK) Ltd; Paperlinx Services (Europe) Ltd; Paperlinx Treasury (Europe) Ltd; Robert Horne UK Ltd; Robert Horne Group Ltd; Howard Smith Paper Group Ltd; The Paper Company; Howard Smith Paper Ltd; W. Lunnon & Company Ltd; Trade Paper Ltd; Sheet and Roll Convertors Ltd; Precision Publishing Papers Ltd; Pinnacle Film & Board Sales Ltd; The M6 Paper Group Ltd; Contract Paper Ltd. The UK packaging businesses (Parkside Packaging Ltd, 1st Class Packaging Ltd and Donington Packaging Supplies Ltd) of Paperlinx UK will remain outside of administration and continue to trade normally. All other global operations of Paperlinx, including Paperlinx Ireland Ltd, and the businesses in mainland Europe, Asia and Australasia, are not impacted by the UK administrations and continue to trade normally. The joint administrators are Neville Kahn and Matt Smith
of Deloitte UK. In a press release issued by Deloitte, the administrators point out that the industry has faced “an increasingly challenging environment due to falling demand as digital communications have increased. We are investigating how best to maximise value in the businesses for the benefit of its creditors. The joint administrators are seeking to continue to trade the businesses on a limited basis to secure the best value available from current stock holdings and other assets.” Many of the sales office locations are being closed but the businesses will continue to actively trade from five sites, including the Northampton head office, but on a more limited basis than previously. During this period the joint administrators will also be attempting to find a purchaser for the businesses involved in the administration as well as the wider Paperlinx UK businesses not pulled into administration. As a result of the continued lower demand for paper and the decline in margins in the UK, Paperlinx
UK commenced a strategic review in December last year. In February 2015, Paperlinx provided an update on the review and outlined underlying EBIT losses for the European business of €14.9m, mainly due to a “shortfall in earnings from Commercial Print divisions in the UK and the Benelux.” The Paperlinx group’s worldwide sales fell 12% to A$1.3bn (Stg659m) but pre-tax losses ballooned to A$87.4m for the six months to December 31st 2014 compared to losses of A$25.3m for the same period the year before. In its results statement, the group said that one of its key objectives was to continue its diversification away from commercial print, with its sign and display/VTS, packaging and consumables divisions now generating 12.1%, 10.8% and 2.9% of sales respectively. Half year sales across Europe fell 15% to €610.9m (£444m) year-on-year, with pretax losses almost doubling to €35.3m from €18.2m. The divisions underlying EBIT loss increased 13% to €14.9m. The group’s net debt increased by A$64m to A$157.6m in the last six months of 2014.
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