Marketing group in administration, with the loss of all jobs

All 15 staff members at Manchester-based PR business, Blue Chip Marketing, have been made redundant following its collapse into administration.

Mike Dillon and Katy McAndrew, of Leonard Curtis, were appointed joint administrators of the company which specialises in BTL (below the line), shopper and digital marketing.

A report by Leonard Curtis, published by Companies House, showed the firm, which operated from Blackfriars House, Parsonage, had debts of just over £1m. It means it has insufficient assets to be able to pay unsecured creditors.

The business, which was incorporated on June 24, 2002, was owned by directors Nicola Thompson, who held a 95% stake in the firm, and Ian Morgan, who owned the remainder.

The joint administrators’ report said: “The company has historically traded profitably, in the year ended 31 December 2021, the company recorded a turnover of c£6.5m and a profit of c£213k was recorded. However, in the year ended 31 December 2022, turnover decreased to c£4.7m and a loss of c£170k was recorded. In the period ended 31 October 2023, managements account detail turnover for the 10 month period decreased significantly to c£1.5m and a loss of £520k was recorded.”

The company was thrown into turmoil after its largest client removed work with immediate effect and without notice “which removed £3.7m from the company’s projected income and resulted in a major shortfall of turnover to break even”.

Leonard Curtis’s report said: “Despite hosting further discussions with the client in an attempt to maintain the business relationship, all further projects were also cancelled. The company was therefore left with no income from their major client, and no sign of any significant future revenue to replace.

“In addition, various other projects have been delayed or cancelled further exacerbating the company’s cashflow issues. The company took a number of steps to reduce costs, however these were not sufficient and it fell behind in its obligations to creditors. In particular trade creditors and HM Revenue & Customs.”

It added: “Following a review of cashflow forecasts, the directors identified that there was a significant risk of insufficient funds being available to pay staff wages at the end of September. As a result, the directors took steps to cease trading on 8 September 2023 and, all staff were made redundant.”

Directors originally approached Leonard Curtis in August 2023, for advice on the company’s position. It was deemed “without an injection of working capital, which was considered unlikely, it would appear that it had no alternative other than to consider a formal insolvency process.”

A Notice of Intention to Appoint Administrators was filed on September 13, and joint administrators were appointed on September 25.

A directors’ loan of more than £600,000 is shown as outstanding on the company’s books, while HSBC Bank provided two Coronavirus Business Interruption Loans in October 2022 and October 2021, totaling £500,000. Arrears of staff pay and holiday pay is estimated at £28,743.

The joint administrators’ report reveals that the company’s largest debtors are London-based creative sales promotion agency Opia, which is owed £394,956, HSBC, at £307,000, then Leeds-based The Lettershop Group, owed £54,134.

Blue Chip Marketing clients included Kellogg’s, telecoms group O2, and Bodyform group, Essity.