50 jobs lost as manufacturer ceases trading
Some 50 jobs have been lost at a Nottingham manufacturer of pattern books and shade cards after the company ceased trading.
CEPS, the parent company of CEM Press, called in administrators from Moorfields to look after the day-to-day running of the Netherfield firm just before Christmas. The company was losing money and had racked up a loss of over £730,000 for the nine months to 30 September 2019.
Problems arose after CEPS said that it expected to exit its investment in the CEM group of companies, which include two operating companies, CEM Press and Travelfast, which trades as Sampling International. CEM is 97.86% owned by CemTeal with the remaining 2.14% being owned by a private shareholder, while Sampling is 100% owned by CemTeal. CEPS owns 80% of CemTeal, the remaining 20 per cent being owned by management and external shareholders.
Sampling was bought on 27 March 2019 in a deal worth just over £1.2 million payable in cash over three years based on performance. However, due to the deferred and performance related nature of the consideration, only £9 has been paid to date.
The decision to acquire Sampling was made to introduce a complementary business within the CEM Group with a view to creating one of the largest individual pattern book and shade card makers in the UK. Under a new management structure, and with two production facilities, it was hoped that the CEM Group would continue to expand and grow, offering a breadth of services to customers.
A statement from CEPS on 4 December read: “Despite management’s efforts and cash injections from CEPS since March 2019 as stated below, it has not been possible to achieve the envisaged savings and efficiencies from consolidating CEM’s and Sampling’s operations and streamlining processes.
“As at 31 December 2018, prior to the acquisition of Sampling, the consolidated net liabilities of CemTeal were £2,960,000. CemTeal’s turnover in the year was £2,824,000 and the consolidated operating loss was £495,000. Hence, if CemTeal had been excluded from the 2018 results, CEPS consolidated revenue from continuing operations would have reduced from £18,474,000 to £15,606,000, but operating profit from continuing operations would have increased from £391,000 to £886,000.
“In addition, in the year ended 31 December 2018, the CEPS Board decided to write-off completely the value of the intangibles in CemTeal. Consequently, there was a customer list impairment exceptional item of £588,000 which also impacted negatively on CEPS’ overall profitability. In the year to date, the loss before tax of CemTeal and its subsidiaries, excluding Sampling, was £954,000 based on management accounts to 31 October 2019.”
Creditors are look set to miss out on over £1.5m owed to them after CEM Press ceased trading, according to documents seen by TheBusinessDesk.com
