The Redditch-based POS and retail display firm, which has worked with a number of major high streets retailers and brands, has called in administrators after losing key contracts, including Sainsbury’s, and suffering “a significant decline in turnover”. Administrators are exploring all options but have warned there may be considerable job losses.
Allan Graham and Matt Ingram of Duff & Phelps were appointed administrators to SP Group Limited on July 24, 2018. The move follows news in March of its sale by parent firm St Ives to a start-up holding company, SelmerBridge headed up by director Landry Kouakou. The deal also included Flintshire-based field marketing agencies Tactical Solutions UK and Flare, as well as large-format graphics business, Service Graphics. These businesses are unaffected by the SP Group administration process.
Mr Graham said that SP Group, which is employs 371 staff, “has suffered from a significant decline in turnover following the loss of key customer contracts last autumn and a further decline in customer-support since the business was acquired this spring.”
Since 2015, the company has reported a series of declines in annual turnover, as well as huge falls in operating and pre-tax profit. For the year ended June 28, the firm recorded a pre-tax profit of
-£5,213,938, compared with -£847,057 reported the previous year. However, directors’ emoluments climbed 12.4% and 13% respectively in 2017 and 2016. Its wage and salaries bill also increased 1.2% in 2017. The board described trading conditions in the market segment SP Group operates as “challenging” due to “ongoing pressures within the grocery retail market”. The annual report also detailed that a contract with Sainsbury’s had not been renewed by the supermarket giant.
M Graham added: “This has created a challenging financial situation for SP Group and has adversely impacted the cashflow and performance of the business in what is already a highly-competitive market. This, combined with the increasing uncertainty impacting both the retail and hospitality sectors, is a contributing factor in why SP Group has gone into administration.”
Administrators explained that they are “engaging with customers to understand their individual requirements”, adding: “We are working with management to explore the options available to preserve as much of the business as possible, however there may be substantial job losses as a result of this process.”