CEPS PLC Sunline Direct Mail Limited Update (3232R)
14 June 2018 - 1:40AM
UK Regulatory
TIDMCEPS
RNS Number : 3232R
CEPS PLC
13 June 2018
CEPS PLC
("CEPS" or the "Company")
Notice of intention to appoint an administrator to Sunline
Direct Mail Limited
The Board of CEPS announces that, for the reasons explained
below, Sunline Direct Mail Limited ("SDM"), is today filing a
notice of intention to appoint an administrator ("NOI"). SDM is a
wholly owned subsidiary of Sunline Direct Mail (Holdings) Limited
("Sunline") which in turn is 80% owned by CEPS, with management
owning the remaining 20%.
Through improved efficiency and automation, SDM was coping with
the continued gentle down-turn in the direct mail polywrap market.
New investment has taken place over the past two years to expand
the letter and paper segment of the business to the point where it
was anticipated that polywrap would have become the smaller part of
the direct mail business in 2019.
However, the impact of the introduction of the new General Data
Protection Regulations ("GDPR"), as highlighted by the Royal Mail
in its recent results where it forecast a severe decline in
volumes, coupled with the reaction to the plastics debate prompted
by the BBC's Blue Planet Television series, have had an impact on
the sector more than SDM can stand in its current form. As a
result, the order book is not filling at the rate that management
would expect it to at this time of year for the "golden period"
from August to November and the business is likely to require
significant amounts of additional funding to move forward.
As at 31 December 2017 the consolidated net liabilities of SDM
were GBP2,592,220. SDM's turnover in the year was GBP6,675,329 and
the consolidated operating loss was GBP60,829. If SDM had been
excluded from the 2017 consolidated results, the CEPS Group's
consolidated revenue would have reduced from GBP23,601,257 to
GBP16,925,928 and operating profit would have increased from
GBP1,100,578 to GBP1,161,407, prior to a one-off write-off of the
inter-company debt between CEPS and Sunline which amounted to
GBP2,414,015 at 31 December 2017. The impact on the CEPS Group's
consolidated net assets would have been roughly neutral.
The inter-company debt between CEPS and Sunline amounts to
GBP2,789,317 at 31 May 2018.
Moorfields Advisory Limited ("Moorfields") has been engaged by
SDM to provide advice to the SDM Board and outline the options
available to the company given its current financial position.
Moorfields has recommended an accelerated marketing process for the
SDM business with a view to effecting its sale as a going concern
if possible and has been engaged to oversee this process. It has
been necessary for the directors of SDM to file the NOI so as to
obtain a court-sanctioned moratorium over the business to protect
it against any enforcement action by creditors whilst it continues
to trade as usual and is marketed for sale. Any sale of SDM's
business and/or assets will be completed by the administrators once
they have been appointed.
Interested parties requiring further information on SDM's
business and the sale process itself should contact Moorfields as
follows:
Moorfields Advisory Limited
88 Wood Street
London
EC2V 7QF
Principal Contact: Darren Morrison
Direct Dial: +44 (0)207 186 1168
Switchboard: +44 (0)207 186 1144
Fax: +44 (0)207 186 1177
Email: dmorrison@moorfieldscr.com
Since the sale process will necessarily be conducted over an accelerated timescale, interested
parties are encouraged to pursue this opportunity as a matter of urgency.
Once the outcome of the sale process for SDM is clear a further
announcement will be made. However, it is anticipated that there
will be no cash cost to CEPS in respect of this action.
Group trading to date in 2018, excluding SDM, is marginally
behind the Board's expectations.
The announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014.
Enquiries
CEPS PLC
David Horner, Chairman +44 1225 483030
Cairn Financial Advisers
LLP
Tony Rawlinson / James
Caithie/Richard Nash +44 20 7213 0880
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END
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