Home / Royal Mail / RNB Group shortfall tops £2.5m

RNB Group shortfall tops £2.5m

RNB Group had an estimated deficiency of more than £2.5m when it went into administration last month, with payment problems with Royal Mail contributing to the firm’s failure.

The report from administrators at Begbies Traynor details how RNB Group had sales of £11m at its peak but this had fallen off after a large volume of work related to Payment Protection Insurance (PPI) claims ceased in 2019, and the firm was then impacted by the Covid-19 restrictions in 2020 with volumes reducing to just one third of pre-pandemic work.

A key staff member also moved to a rival and number of clients followed them, which compounded RNB’s problems.

The rising cost of postage also caused customers to pull their print marketing spend.

Sales at the time it went into administration were around £4.5m.

As the firm struggled with cash flow issues, its direct debit payments with Royal Mail were declined, causing Experian to reduce the company’s credit rating.

Royal Mail then put RNB on stop and requested a £150,000 bond to resume its services, which RNB was unable to pay.

Following the filing of an NOI early last month, Bob Maxwell and Louise Longley of Begbies Traynor were appointed joint administrators on 21 August.

A fast-track sale process resulted in three formal offers, with one – from PDMF Ltd – considered the best outcome with an £80,000 bid for RNB’s business and certain assets excluding data processing and scanning.

This resulted in RNB Group’s SIP 16-compliant pre-packaged sale to connected party PDMF Ltd, which was set up by Robert Metcalf the brother of RNB managing director Ryan Metcalf.

The deal involved £50,000 paid on completion to be followed by £10,000 per month for three months, and with 30 out of 34 employees kept on and transferred via TUPE.

At the time of the administrators’ report, PDMF had not provided a viability statement.

RNB Group’s estimated total deficiency was £2.54m.

Unsecured creditors are owed around £624,608.

Royal Mail was the biggest trade creditor, owed £183,405.

HSBC is owed in the region of £530,000 made up of a £350,000 overdraft and £180,000 Recovery Loan Scheme loan.

Funding Circle provided two loans under the CBILS scheme and is owed £115,727.

HMRC is owed £121,265.

The Begbies Traynor report stated that based upon current and estimated future realisations it is likely that there will be insufficient funds to enable a divided to be paid to preferential, second preferential, or unsecured creditors.

Separately, family-owned micro print company Angus Print Ltd, which had operated from the same premises in Leeds as RNB Group, has gone into administration.

David Willis of FRP Advisory was appointed on 28 August.

Angus Print was owned by John and Linda White.  


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