!["It is purely because of that bad PR in South Africa that [Bell Pottinger] went under," said an unnamed accountant](https://cached.imagescaler.hbpl.co.uk/resize/scaleWidth/743/cached.offlinehbpl.hbpl.co.uk/news/ORP/saflag-20170413095107531-201709041037032431-20171128113056949.jpg)
A scandal over work for a controversial South African client led to the demise of the agency in September.
BDO was appointed as administrator, after the departure of CEO James Henderson and its expulsion from the PRCA.
Statements of administrator's proposals were published at Companies House yesterday.
They reveal that draft accounts show turnover for the group for 2016 was £37.5m, down from £42.4m in 2015 and £41.6m in 2014. The group registered a net loss of £572,000 in 2016, having made profit of £403,000 in 2015 and £1.1m in 2014. Management information also shows that EBITDA after exceptional items for the first seven months of 2017 was £352,000.
Documents relating to the LLP, which represents the bulk of the Bell Pottinger group, shows turnover slightly in excess of £33m in 2014 and 2015, falling to £29.1m in 2016, with profit after tax standing at £2.8m for 2016, a higher figure than in 2013 or 2014, but down on the £3.3m figure for 2015.
Management information shows the LLP's turnover for the first seven months of 2017 was £17.3m. If turnover were equally distributed across the year, this would make full-year turnover just shy of £30m.
Business was 'holding its head above water'
The document also notes that the business now owes Lloyds Banking Group circa £5.5m in respect of various loans.
However, an accountant who has reviewed the documents, but preferred not to be named, told PRWeek the business "was holding its head above water" and does not appear to have been in financial dire straits prior to the crisis unfolding in August and September.
"It is purely because of that bad PR in South Africa that it went under," the accountant said, adding: "I think that the main losers really are going to be the partners."
The documents show that the company owes £753,026 to 'partners tax and pensions holding'. At least 50 per cent of this figure, and probably higher, will be tax that is now owed to HMRC by the 40 former partners of the business. The Times had previously placed the partners' tax bill at up to £1m.
Two days, 22 parties
The Companies House documents also show that BDO was appointed on Tuesday, 5 September - the day that the PRCA expulsion was officially announced, and two days after Henderson's departure was confirmed.
BDO was hired to try to sell the business, and approached 22 parties, of which 12 signed confidentiality agreements and were shown further information.
"Whilst a limited number of parties expressed some initial interest and due diligence was undertaken, no offers capable of accpetance were received for the group's underlying business and assets," the document says. The final potential buyer withdrew interest on 7 September, and it was decided that the firm should go into administration.
Bell Pottinger LLP entered administration on 12 September.
The reports show that BDO was paid £161,000 for its work prior to administration. Two law firms have done work to the value of £45,000. The legal PR firm Infinite Global is due to earn £3,800 from work for BDO, while an estimated budget of £10,000 has been set for subsequent PR work being done by Osborne & Partners.
Bell Pottinger continued to employ one staff member and two partners until the report was prepared at the start of this month, but is now understood to have none.
