Colorgraphic calls in receivers

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The Independent Online
COLORGRAPHIC, the direct marketing group whose shares were suspended last week, has called in the receivers, writes Heather Connon.

John Talbot and David Lovett of Arthur Andersen have been appointed joint administrative receivers to the company and five subsidiaries. Its businesses in the US and the Netherlands, and Decisions Group, its telephone marketing associate, are not affected.

Colorgraphic expanded rapidly through the 1980s but the slump in the advertising industry pushed it into a pounds 2.3m pre-tax loss in 1991.

Analysts were forecasting a further pounds 2.5m loss for the first half of this year.

Last week, the company announced that it was in talks with its bankers and said that its chief executive, Nick Winks, had been 'relieved of his duties'.

The receivership marks its failure to win the support of its bankers while it tried to restructure. Sources close to the company said the restructuring would have required an injection of new funds.

A spokeswoman for the receivers said the size of the debt had not yet been established. At the last year-end, it was pounds 6.7m compared with net assets of pounds 8.8m. But the net asset figure is likely to have been substantially reduced by trading losses. Colorgraphic has about 350 employees.

The spokeswoman said that the receivers hoped to enable the companies to trade while buyers were sought.