Family-owned printing company turning over $17.4 million collapses into administration
A large printing company turning over $17.4 million a year has been placed in administration, a testament to the ongoing consolidation within the troubled industry.
The news comes just days after news broke Geon Group, another printing company once valued at $320 million, was placed in receivership putting 1,000 employees at risk.
KPMG has appointed Darren Lewis and Damian Templeton as receivers to Vega Colour Group, a Melbourne-based printing business focused on creating environmentally-friendly printing material. The business was founded in 1960 as a family business, and now operates out of a factory and office space larger than 5,000 square metres.
KPMG confirmed the company turned over $17.4 million in the 2011-12 financial year, with earnings before interest, tax, depreciation and amortisation of $1.7 million.
KPMG partner Damian Templeton told SmartCompany while an investigation is still underway into why the business collapsed, the industry in general is facing tough times.
"It's a little early to say too much, we were only appointed late last week so we're undertaking an urgent view of the business' situation. But we are continuing to trade and have ... been approached by a number of parties already," he said.
KPMG is putting the business up for sale as a going concern. Templeton said he could not reveal details of debt, but said creditors were mostly other entities in the printing industry.
"The printing industry has been one that's been quite tough for a while now, there have been some that have gone under, including Geon last week," he says.
"A big part of it is over capacity in the industry, and people are chasing work. It does tend to impact those that are weakest first."
The printing industry has been majorly affected by the shift to using tablets and smartphones to create and share documents. Recently, Fairfax announced it would slow down work at its Tullamarine printers, which it opened only in the late 1990s.
Research from IBISWorld released last year found the industry has recorded a negative annual growth rate between 2008 and 2013 of -5.4%, and found the shift to technology is "having a negative effect on demand for printed materials used by bricks and mortar retailers, financiers and service providers".
KPMG is selling Vega Colour as a business with multiple products for leading brands, along with local and international environmental business awards.