Creditors miss out of nearly £1m as GDPR sends company under

A Loughborough and Nottingham direct mail company owed nearly £1m when it went out of business.

Sunline Direct Mail (SDM) went into administration in June with the loss of 130 jobs after calling Moorfields Advisory in.

The business operated a mail division in Loughborough and a CYNC division in Nottingham. Services included mailing and polywrapping, data management, paper envelope enclosing, pick and pack and response handling.

According to documents seen by TheBusinessDesk.com, the company suffered declining demand in 2017 and suffered the loss of several key customer. Despite this, sales figures in Q1 of this year were in line with expectations, but by the time that GDPR implementation came around in May, Q2 sales had been “significantly impacted”.

Added to this was the fact the company had made a “significant investment” in its Cync division’s Nottingham premises, which wasn’t being clawed back as this arm of the business was loss-making.

At the time the company had an advance rate of 100% on an invoice finance facility from ABN which meant that cash flow was entirely reliant on sales. PAYE wasn’t paid in Mary and, based on cashflow forecasts prepared by the company, the June VAT bill would go unpaid.

With the long-term effect of GDPR on the company unknown, the Sunline’s directors and investors were unwilling to lend it any more cash and it was agreed the company was insolvent.

Administrators’ documents show that Sunline made a loss of £361,000 for the four months to 30 April. The company went under owing £972,293 to unsecured creditors once administrators had paid staff. There were no secured creditors.