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Picton Press goes into administration

Thursday, 24 May 2018
By Print21

(l-r) Gary Kennedy (director), Brad Hall (data services manager), Murray Scott (operations manager), Dennis Hague (director).

Leading WA printer Picton Press has appointed an external administrator after the Australian Taxation Office (ATO) launched court action to recover a debt of $1.3 million.

“We’re very hopeful’: Graham Jamieson, GM Picton Press.

General manager Graham Jamieson, who’s also a director on the board at Printing Industries Association of Australia (PIAA), says Picton Press remains open for business as administrators from Cor Cordis put together a report of the company’s current financial situation. Picton owes at least another $700,000 to trade creditors.

“There’s not a lot more to be said,” Jamieson told Print21. “We are going through the process and very hopeful to come out the other side. We’re open for business as usual, absolutely. We’re very hopeful but we’ve agreed not to comment and I’d rather leave any further comments to the administrator.”

Administrator Jeremy Nipps says he’s putting together a list of secured and unsecured creditors. The total debt figure so far is more than $2 million.

“The company is continuing to trade, and servicing the clients of the business is a priority, along with supporting the needs of employees,” says Nipps. “The underlying business has value and closing the doors doesn’t help anyone.

‘We’re testing the market’: Jeremy Nipps, Cor Cordis.

“Our job is to try to put together a plan to restructure the business so it can continue into the future, whether with the current directors or with a sale of the business where someone else comes in. It depends on what’s out there in the market and we’re testing the market by calling for expressions of interest. We’ll see what comes of that and then it all depends on who’s genuine and who’s not. But the current directors of the company are very keen to retain the business.”

Picton Press has grown from a three-man operation in 1988 to become one of Perth’s largest print companies, employing about 30 people, including directors Dennis Hague and Gary Kennedy.

The Perth-based company has prepress, digital, offset and binding departments, specialising in full colour promotional material, magazines, catalogues, brochures, posters, and annual reports, along with digital capabilities. High profile clients include Coles, Woolworths and Domino’s Pizza.

 

Picton Press installs a KBA Rapida 10 Colour press in 2014.

A first meeting of the creditors will be held at the BGC Centre in Perth at 10am on Friday, 1 June.

13 Responses to “Picton Press goes into administration”

  1. May 24, 2018 at 3:54 pm,

    Banksy
    said:

    Surely he has to resign from PIAA?

  2. May 24, 2018 at 11:20 pm,

    Fred
    said:

    and yet another one that owes the ATO over a mil!
    Not paying tax, hits all of us in one way or another!
    Resign from the company, sell your personal assets and pay your debts.
    All company directors should be personally liable, as they are in charge of the company and they put it into the position they are in.
    Stop selling high volume under market price, as you will never win.
    This industry makes me angry and sad, as we are all in the same boat, but some don’t give a rats backside.
    We are an honest supplier, pay all of our taxes and suppliers on time and help where we can.
    Yet we get told off by customers, as we don’t extend credit terms. Wonder why that is!

  3. May 25, 2018 at 1:22 pm,

    Bert
    said:

    We could all win more work if we didn’t have to pay the tax we have collected, or pay for the paper we use.
    The directors are smart people and they know exactly what they are doing. Clearly that aren’t committed to saving the business as they have lots of personal assets that aren’t being poured in to it.
    Having the biggest and fastest press is only useful when you charge the correct market price.
    They have been trying to sell for 18 months, but nobody wants the huge debt.

  4. May 25, 2018 at 4:26 pm,

    Old Tme Regional QLD Printer
    said:

    OK, I commented on Chameleon (or the liquidation…Phoenix of) the other day, the question must be raised of the tax office, both companies owed similar amounts of tax yet one is put into administration whilst the other simply liquidates and walks away commencing business under a new guise the next day? The questions must be asked of the tax office.
    1. How does one company run up 1 million + and liquidate whilst the other owing a similar amount is put the other into administration?
    2. How the **** can a print company run up that much debt with the tax office before anything happens? How can the directors actually sleep at night? And how effective are you tax office? Obviously not very if companies are allowed to continue trading with this level of taxation debt?

    Ethics, can anyone find any? ……reallly!

  5. May 30, 2018 at 5:03 pm,

    George
    said:

    Some of these comments are a little mean spirited. Btw I think the ato knows what it is doing and it is sensible public policy not to liquidate companies that employ people and provide services at a “drop of a hat”. It is not in Australia’s best interest for the ATO to unnecessarily “kill the goose” as if is survives may lay eggs. I’m sure like most businesses the management worked to save the company and their employee jobs.

  6. May 30, 2018 at 7:02 pm,

    Old Tme Regional QLD Printer
    said:

    Re: Georges Comment. Point taken i was not being or intending to be mean spirited, simply drawing a comparison, and further I know if I owed the ATO $1m + I could not sleep at night, maybe the decision for Picton to go into administration is a sound one though one has to question, still, how a debt of this magnitude from a company this size is possible?
    Regarding the comparison my point there is that Chameleon liquidated and opened under another trading entity as if it were business as usual, whilst Picton have had an administrator appointed and now need to go through a process to see if the company can survive, where is the equality in that? from an ATO point of view? Let one die and write off a million whilst put the other through hell for a maybe? The Debt has gone away for one company and its happy days (for them) , the other needs to go through a lengthy process that will still have a million dollars worth of debt to the ATO on the other side, and by the way the Queensland company have not yet paid or probably don’t even know what their 40 odd sacked or retrenched employees entitlements are!!!
    I am sure that the WA company are fully aware of their current situation and obligations, to them I hope that it all works out.
    To the other QLD company I am sure that this was a deliberate and orchestrated act by the persons in control of that entity, is that not at the very core of “Voluntary Liquidation” ….”Debt be gone lets carry on” !!!!

  7. May 31, 2018 at 2:10 am,

    George
    said:

    Thxs for clarification OTRQP. I was mainly referring some of the other posters comments.

    I think that the industry has paid a lot of taxes over the years and the ATO understands this and due to the cyclic nature of business (in general) the ATO prefers to have business survive in the long run. It is generally the banks and others creditors, that determine the situation.

    I agree with OTRQP, on that it does not seem to be equitable ATO treatment, particularly if Chameleon hasn’t acted the best. I’m glad that you hope that it “works out” for Picton.

    What I am most concerned about was the direction of the thread, it seemed to urge bad policy, by encouraging the ATO to be the one to force more business closures. Once a businesses is forced to close, it is almost always a lose lose lose lose lose scenario for ato, employers, unsecured creditors, governments and owners. The bank are the ones that are generally secured so they are normally the first to act and this often is not in the best interest of unsecured creditors and Australia in general.

    In most businesses, when the cycle is out, management and staff are working a hard as they can, to try and keep the doors open until the cycle returns. When they do so, this often benefits the ATO and other creditors the most. Which the ATO understands, that they themselves (over the long run) benefit greatly from everyone working hard to keep businesses going. Good government policy is focused on economic stability eg reducing the magnitude of cycles and the subsequent consequences to business.

    I just wish that the other posters would consider putting aside their competitive nature when there is an administrator or liquidator appointed. No one has a crystal ball and we are all at risk for non-payment or bad contract or accident or an unforeseen event. My heroes are business owners that take the challenge of creating a business, despite knowing the hard work, risks and pain.

  8. May 31, 2018 at 8:12 am,

    Banksy
    said:

    The ATO should kill any business that runs up debt like this – every time and quick smart.

    Every business that runs like Picton obviously did – badly and by not paying its debts – is running at a massive advantage to the rest of us.

    Every job they win where they don’t have to pay for the paper, tax or super is a job that could have gone to a printer who is “working hard” to pay all those things.

    And don’t forget that while the ATO, super and suppliers weren’t getting paid, I bet the directors were. That money was going somewhere.

    In our industry the paper companies are often the only people with the legal resources to wind up bad printers. But they often don’t.

    History tells us Paper Company X will often float bad businesses beyond all reason, and once they cut them off, Paper Company Y then steps in to “win” the account and keeps the printer going for another few months.

    All that unpaid-for paper flowing into the dud company eventually lands on the P&L of all the rest of us, because the paper companies are doing exactly what George is saying they should do, which is throw good money after bad.

    So that leaves the role of corporate policeman to the ATO and good on them. A healthy market and industry only works if badly run/non profitable companies go out of business. Kill them quick, before they burn everyone foolish enough to trust them.

    My heroes aren’t the business owners who work hard to rob the taxpayer, their staff and suppliers, whether knowingly or through incompetence. My heroes are the ones who know their costs, make a profit and pay their bills.

  9. May 31, 2018 at 8:17 am,

    Old Tme Regional QLD Printer
    said:

    Thanks for your reply George, it is a proactive point of view, we can all benefit from having a more balanced approach.

    Personally in my business life (approaching 40 years in print) it has not been all plain sailing at one stage I was left with nothing no property, no money no business, no marriage! Back then after a wonderful six month break I had a lot of support from other printers, paper suppliers, customers and family, many gave me credit and help to get started again, still to this day I do business with the companies that helped (at least the ones still in business) And I thank them all for their help.

    During the whole 40 years in business the ATO has never been owed any outstanding funds, they are paid all due when due, just like wages, super, paper suppliers, leases, rentals etc sometimes at the end of all that there are slim pickings for the business owner, hence I have a moderate mortgage, drive a ute, live in the country and can sleep at night!
    My point here is that just like any other creditor the ATO need paying, If way back when a problem is recognised in a business, surely a solid and binding agreement can be put in place prior to the debt growing to this size.

    Administrative guidance could be introduced earlier and the problem addressed earlier. If the problem is ignored (or in the case of Chameleon it appears to have been used and manipulated to leverage a leg up a business advantage) then this is either bad management or conscious avoidance or manipulation of the debt owed (the latter is surly not legal?)
    Administration and assistance in guiding management to fix the problem could occur sooner surely? Then we would not have companies with many quarters of tax owing simply close down and open the next day with a new parent company at the helm, I do hope indeed that “it works out” for the Picton group. Maybe if one was to ask the directors if they and the interested parties proactively collaborated 6 months earlier would the situation be different today? Or would the situation even exist?

    Regarding the other company used in my original comparison (Chameleon) it appears they may have indeed acted with impropriety and as such in a competitive industry you can see the frustration in general terms of posters comments.

    I accept that each case has very different circumstances. It still seems unfair that one company can walk away from $1m debt with the ATO and trade on as if nothing has happened, whilst the other is paddling like hell to find a solution!

    What about the rest of us who pay all due on time? are we rewarded, maybe only in the amount of hours we sleep, or when we appreciate our hospitals, social security, schools the roads we drive on, our Police and Ambulance officers! in general what our PAID tax contributes too makes Australia tick if you don’t pay it puts stress on the other cogs in the clock!! and when the cogs are stressed they become a bit annoyed with the ones that have stopped or refuse to turn in unison!!

    I am off to work now, good therapy this!

  10. May 31, 2018 at 10:57 am,

    George
    said:

    Thxs George for meeting me half way. I too have had tough times over the years in business and most of us have. In one business the ATO helped get us through until the cycle changed. This worked for them as the next year we paid back, kept 500 men employed (most family men), keep projects going on time and we paid several times the ATO’s debt back in new taxes the following year. That was 18 years ago and the business is still paying tax. The ATO decision was a win win win and I am arguing that extending credit is good for the ATO and competition in Australia. Closing down business in Australia will drive jobs overseas as we are seeing in Digital.

    Banksy I understand that you are a good business man and that is a economic “hero” in my (and others) definition. Take the compliment. I’m focusing on good ATO policy in general and that the printing sector should not be a exception. The ATO doesn’t see its role to get rid of competitors for the benefit of the remanding players. I think you will agree competition is good for Australia.

    In fact the ato policy to extend credit to businesses is an important function as more businesses mean more jobs and a bigger tax base means a better government budget. The ATO charges interest on the debt and even allows this interest to be tax deductible, so they know it is good policy.

    Many heroes come home from the war, but many don’t.

  11. June 01, 2018 at 2:29 pm,

    Bert
    said:

    The Picton Administrators meeting was held today with a slight correction on their earlier PR spin. Total debt is now $9 million. So much for open and transparent discussions with their affected staff.

  12. June 01, 2018 at 3:58 pm,

    Ms Stacey
    said:

    Wow Bert!! Where/how did you hear this?! That’s crazy!!

  13. June 05, 2018 at 11:35 am,

    Platen Pete
    said:

    Yeah Bert how do you know this? 9 million is a bit of a stretch. Are you making this up?

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