Niche publisher Palamedia, which was formerly part owned by Seven Network star David Koch, has been placed in voluntary administration after losing a long battle for survival.
As reported by Smartcompany.com.au, the company, which publishes trade industry directories, magazines for corporate clients and the financial services industry trade magazine Insto, has not turned a profit since 2005-06 and has been attempting to restructure its business, including examining the option of exiting the publishing sector completely.
The company's last cashflow statement for the December quarter, which showed negative net operating cashflows for the quarter of $267,000, and just $142,000 in the bank at December 31, sparked a query from the ASX about the company's viability.
The company said a "rationalisation of the company's products and services has been initiated to stem losses and bring the company back to an operating surplus" but admitted in a brutal assessment that "the company has been unsuccessful over a number of years to execute an effective growth strategy to provide adequate returns to shareholders".
Palamedia is now in the hands of administrators Christopher Darin and Gavin Moss of insolvency firm Worrells Solvency & Forensic Accountants.
The administrators, who will call an initial meeting of creditors in the coming week, were not available for comment this morning.
Koch was formerly an executive director of Palamedia and owned a stake in the business, although he has not been involved with the company since 2005.
The company last produced a profit in 2005-06 of just over $91,000, but lost $1.02 million in 2007-09 and $431,799 in 2008-09.
That poor result led chairman Nick Shannon to deliver a scathing assessment of the company's performance.
"Whilst we were faced with the GFC, and it would be easy to sweep our problems under that particular carpet, the reality was that we dropped the ball on our account management and wasted time, money and energy on addressing the wrong issues," Shannon wrote in the company's annual report.
"The end result was that we incurred an operating loss of $432,000. One of the problems with losing money is that a lot of good work gets overlooked and it places a lot of pressure on both directors and staff. Relationships and patience were tested and governance standards slipped."
The company's largest shareholder was former director John McNiven.
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