A merger involving a Bradford-based direct-mailing company is the only way to safeguard the firm’s future, according to the chief executive responsible for brokering the deal.

Kevin Dunstall, of investment group Cogent B2B, is working on the move to combine Prospect Mailing Services in Wyke with Laisterdyke’s St Ives Direct, which Cogent recently bought in an £8 million deal. Staff from Prospect have raised concerns since the deal was announced, claiming that wages were being delayed or withheld, something the company blamed on enforced changes to its accounting system. Speaking to the T&A, Mr Dunstall confirmed that the merger was ongoing, and that without Cogent’s intervention, Prospect would have been placed into administration over a year ago. “It is a distressed business that we are trying to get through a very difficult time,” he said. “A lot of people would have said, this is just too tough, let’s let this business go. We’re trying to make sure people still have jobs and Wyke has a recruiter in the area.”

Mr Dunstall also stated that there were plans to potentially recruit a further 300 staff as part of the merger, to create a new company with an annual turnover of up to £47 million.

“This merger is a positive for Yorkshire and for Bradford. It is about employing people in this area and moving the business forward. If I wanted to cut overheads, I wouldn’t be merging Prospect as it is a labour-intensive business. It’s not every day your owners go and spend £8 million to secure the future of a business, and it should have been really positive news.”

Following the deal being made public, disgruntled workers contacted the T&A complaining they had not been paid and that wages were regularly delayed. One claimed that they were often unable to pay household bills. But Mr Dunstall said: “If people haven’t been paid, they must have been missed off the list of the manual accounts we were processing. If they contact us and we check and see that they haven’t been paid, they’ll get processed straight away. Do you think people would come to work if they hadn’t been paid for three months? If we’re not paying them, how are we getting them to come in?”

Mr Dunstall acknowledged that the wage issues had not been communicated particularly well with staff at times, and that in hindsight, the company may have dealt with the matter differently. He also stated that Prospect staff would be given an update on the company’s immediate future this week.