A & H TECHNOLOGY LIMITED

Executive Summary

A & H Technology Limited exhibits high financial risk due to a history of negative net assets and working capital deficits, alongside low cash reserves and reliance on director loans. Though recent accounts show slight improvement with positive net assets and reduced liabilities, liquidity and solvency concerns remain significant. The company complies with filing obligations, but further due diligence is advised on operational sustainability and financing arrangements.

A & H TECHNOLOGY LIMITED - Analysis Report

Company Number: 13113093

Analysis Date: 2025-07-20 11:22 UTC

1. Risk Rating: HIGH

Justification: The company has been trading since 2021 and shows a pattern of negative net assets and net current liabilities in its initial years, indicating persistent losses and liquidity problems. Although the latest accounts (year ending 31 January 2024) show a small positive net asset position (£161) and improved net current assets (-£1,338, significantly better than prior years), the cash balance has dropped considerably from £4,206 in 2023 to £1,493 in 2024. Current liabilities remain relatively high, and the company relies on director loans for financing. These factors combined suggest ongoing solvency and liquidity risks.

2. Key Concerns:

• Persistent Negative Net Assets and Working Capital Deficits: For two consecutive years (2022 and 2023), the company reported substantial negative shareholders’ funds (approx. -£30,000) and large working capital deficits, which raises concerns about its ability to meet short-term obligations.
• Low and Declining Cash Reserves: Cash holdings declined by approximately 65% in the latest year, from £4,206 to £1,493, which may indicate cash flow stress.
• Dependence on Director Loans: Significant loans from directors (£5,195 each) appear on the balance sheet, which may be essential to maintain operations but also indicate limited external financing options and potential governance risks.

3. Positive Indicators:

• Recent Small Positive Net Asset Position: The 2024 accounts show a turnaround to a positive net worth (£161), suggesting some improvement in financial health.
• Reduction in Current Liabilities: Current liabilities have decreased from £44,659 in 2023 to £36,310 in 2024, indicating efforts to manage short-term debts.
• No Overdue Filings or Compliance Issues: The company’s accounts and confirmation statement filings are up-to-date, reducing regulatory risk.

4. Due Diligence Notes:

• Investigate the reasons behind the significant historical losses and what measures management has taken to improve profitability and liquidity.
• Review detailed cash flow statements to assess operating cash flows and financing activities to understand how cash is generated and used.
• Assess the terms and conditions of director loans, their repayment schedules, and any related party transaction disclosures.
• Confirm the sustainability of the business model in the construction installation sector (SIC 43290) and client concentration.
• Verify the status and impact of the recent director resignation on governance and control.