Written by: Keith Tully
Published: 29th April 2016
The UK’s largest independent printing company has called in administrators after failing to overcome cash flow problems in recent weeks.
Polestar’s newly-appointed administrators have said that they are looking for potential buyers of the business and its assets with close to 1,500 jobs understood to be hanging in the balance.
Despite having deals in place to print magazines for the likes of the Radio Times, Cosmopolitan, Hello! and Grazia, the company has been left in an unsustainable financial position after effectively running out of cash.
Polestar’s eventual collapse into administration was apparently brought about by the loss of an important printing contract it had in place with DMG Media, which publishes the Daily Mail newspaper.
This contract loss is understood to have added to Polestar’s financial woes, which were already considerable as a result of a widespread and sharp decline in sales seen across the UK’s magazine and newspaper publishing sectors in recent years.
Annual revenues across Polestar’s UK operations have been worth more than £200 million and it has been printing as many as 50 million magazines a week for a variety of major publishers.
The business underwent a pre-pack administration sale last month in a move designed to establish the company on a more sustainable financial footing.
However, PwC’s appointed administrators have explained that the potential success of the pre-pack sale was effectively scuppered when DMG Media decided not to transfer their business to the new company that last month’s restructuring had created.
“Unfortunately the decision by its largest customer not to transfer their business to the new company as well as continued pressure from other stakeholders has threatened the viability of the ongoing business to the extent that directors have sought the protection of an administration,” a PwC spokesperson said in a statement.
“We believe there is a strong underlying business within the group and we are focused on doing all we can to preserve value and maintain the business while we look to achieve a sale. We would welcome a dialogue with all interested parties and ask that suppliers and customers work with us to try to deliver a lasting solution for the business.”