ICSM Printing Industry News: concerns mount as another PFI firm closes – history appears to be repeating itself after the collapse of YM and Polestar previously

By Harry Mottram: When Polestar collapsed in 2016 it sent shockwaves through the industry with 1,500 jobs lost, and the owners of Hello, Cosmo, Grazia and Radio Times had to find new printers for their magazines. There is something horribly familiar about the slow-motion collapse of the PFI firms as one after another they go under or shut up shop. Last year YM went into administration after a long drawn-out decline as parts of the business closed down with creditors even mounting blockades of the business in the vain hope of being paid. Now a similar situation appears to be unravelling as another PFI firms shuts its doors for good following the closure of the group’s Sign Plus, Loftus Signs, Jasmine and Signmaster. Works Manchester is the latest to shut up shop.

The trade publication website Print Week has charted the latest sorry chapter in the decline of PFI – with journalist Jo Francis writing: “PFI Group’s disastrous acquisition spree under CEO Darren McMurray has now culminated in the filing of a Notice of Intention to Appoint Administrators against Works Manchester. Rymack Sign Solutions, which trades as PFI Group, agreed to buy Works Manchester from Software Circle (then Grafenia) in May 2022, in a deal that was worth nearly £3.17m at the time. However, PFI failed to meet the first substantial deferred consideration payment that was supposed to be paid on the anniversary of the sale. More than six months on, the situation remained unresolved, and Software Circle has been forced to write off more than £2.2m due to PFI’s failure to pay.”

Those figures lay bare the issue and the reason why firms are closing and workers are losing their jobs just before Christmas. It also shows the level of debt which is at the core of the problem along with over ambitious acquisitions resulting in financial mismanagement. Ian Carrotte of ICSM has seen it all before. “When Polestar went down it was a shock to many,” he said, “but like the YM closures last year suppliers were talking openly about not being paid, only being paid part of what was invoiced or being paid late. It’s the first sign of trouble – however big and prestigious a firm is if they don’t adhere to standard business practice as regards credit then before things get out of hand put them on stop.”

He said there had been warning signs for some time with YM Group and ICSM had understood there were problems with suppliers suffering late payment. Now history appears to be repeating itself as Works Manchester has closed leaving 90 staff out of a job before Christmas. Jo Francis wrote: “A source close to the situation told Printweek that the factory was shuttered on Friday afternoon (8 December), with all 90 staff laid off. The company had become the latest in a string of PFI Group companies to hit the buffers, with a Notice of Intention to Appoint Administrators filed on 6 December, and FRP Advisory yet again in the frame to be appointed. However, at the time of writing Printweek understands FRP admins have not yet been formally appointed.”

ICSM noted the post from John Prior of the firm on LinkedIn about the closure, but there was no explanation of why the company had failed while the PFI website has no news either of the demise of it various divisions.

+++++++++++++++++++++++++++++++++

ICSM CREDIT
For information on ICSM visit www.icsmcredit.com or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com