Fears for 200 jobs at firm in administration
Jan 17 2008 by Iain Laing, The Journal
AROUND 200 workers are worried for their jobs after a leading North-East packaging company went into administration yesterday.
Jaycare’s collapse comes less than a month after more than 20 staff were made redundant at the North Tyneside plant, which the company explained as necessary because it had lost a major contract after 10 years.
The company’s roots go back nearly 120 years and it has operated as Jaycare on Tyneside for 17 years. The last seven years have been tumultuous for the business with a management buy-out in 2000 followed four years later with its purchase by a venture capitalist.
Its annual turnover had been around £18m in recent years, but its profits had peaked at £4.9m in the year to April 2004 and halved to £2.3m the next year, before plunging £426,000 into the red in the 12 months to April 2006, the last year for which accounts are available.
Mark Firmin and David Crawshaw, of KPMG’s Restructuring practice in Newcastle, were appointed yesterday as joint administrators of the company, which is based on the New York Industrial Park.
Mr Firmin said: “Jaycare is a long established company with a loyal customer base and a skilled workforce. I’m keen to hear from anybody interested in purchasing the business as a going concern.”
The firm said it was too early to give any further details of the company’s accounts and its recent business, and Jaycare managing director Archibald Dickie last night said he had been instructed by the administrators not to comment further on the situation.
Just before Christmas, Jaycare managers said they were making 24 assembly workers redundant and were in negotiations over the possible axing of six further administrative and support workers. They said this was “in order to maintain control of an ever-increasing cost base due to pressures on polymer, energy and transport costs.”
Workers were full of hope when the company, one of the country’s leading manufacturers of rigid plastic products and dispensing systems for the pharmaceutical and healthcare industries, was bought in 2004 by London-based venture capitalist Phoenix Equity Partners.
At the time Phoenix, who had paid £47m for the business, reassured workers by saying that it was planning to pump cash into the business and had the full backing of Jaycare’s management for its strategy.
Phoenix managing director James Thomas said then: “The reason we bought it is because we think it’s a very attractive business and it’s the market leader in manufacturing packaging for the pharmaceutical industry and in vitamins.
“These are growing industries and we think the company has got an opportunity to expand, increase its sales and increase its profitability over the next five, six or seven years.”
Four years earlier, the company was bought by its management backed by venture capitalist 3i for just £29m. Managers then said the company had not been trading to capacity because of the tough economic climate. Phoenix were not available for comment last night.
