David Graphics hits the wall and bounces

Former DG general manager, John Coates, and investors connected with former owner, Alan David, have launched the new company, which has bought some of the equipment and contracts for work in progress. When the David Graphics was first placed in administration, (Archive search = David Graphics) a move to organise an employee buy-out failed and the new company’s bid was chosen ahead of an offer from rival prepress company Kirks.

According to John Coates, the DGC offer is largely funded by the work in progress, with the arrangement suggested in the first place by the administrator, Stephen Hathaway of Bentley MRI. “Some people have suggested that this was all planned out, but I want to assure you they are one hundred and ten per cent wrong,” said Coates. “It was only when all else had failed that we threw our hat in the ring.”

DGs went bust owing $7.7 million, with the administrator advising employees that in order to get their entitlements they may have to apply to the Federal Government's General Employee Entitlements and Redundancy Scheme (GEERS). Some of the present employees will be offered positions with the new company, which will relocate to new premises in the New Year, but the number is still uncertain.

The new company, Digital Graphics Communications, put in a bid of around $350,000 for the nominated equipment and the work in progress. The rest of the equipment will go to auction on December 11th with the auction list available next week. The final creditor’s meeting is the day afterwards.

David Graphics was one of the iconic prepress businesses in the industry and its demise is symptomatic of the market conditions that have devastated the sector in recent years. The company did packaging work for some of the largest food companies, such as Nestlé and Westons.