Investment Risk Analysis: ABLE CARE LIMITED (SC167762)

1. Risk Rating: LOW

Justification: Able Care Limited demonstrates a strong and improving financial position with consistent growth in net assets over the past decade, healthy liquidity ratios, and full regulatory compliance. The company has been established for nearly 30 years, showing operational resilience. The primary concerns relate to balance sheet composition changes and corporate structure that warrant clarification rather than indicating financial distress.

2. Key Concerns

a) Corporate Ownership Structure Complexity The PSC register presents a potentially conflicting picture: Advanced Healthcare Group Limited holds >75% of shares and voting rights with the right to appoint/remove directors, yet three individuals (Mrs Morrison, Mr Elliot, and Mrs Elliot) are each listed as holding 25-50% of shares and voting rights. This overlap suggests a recent acquisition or group restructuring that requires clarification to understand the true control dynamics and any related party implications.

b) Significant Increase in Other Debtors and Other Creditors Other debtors increased by 86% from £51,588 (2024) to £96,088 (2025), while other creditors rose 23.5% from £92,449 to £114,181. Such movements in non-trade balances can indicate related party transactions, director loans, or operational changes that may not be immediately apparent from the filleted accounts.

c) Cash Decline Despite Growing Profitability Cash at bank decreased from £359,575 to £315,811 (12% decline) while net assets grew by £6,193. This divergence suggests working capital pressure or investment activity that should be understood in context of the overall cash flow dynamics.

3. Positive Indicators

a) Consistent and Sustained Growth in Net Assets Over the 10-year period reviewed, net assets have grown from £245,970 (2016) to £586,773 (2025), representing approximately 138% cumulative growth. This trajectory demonstrates sustained profitability and prudent retention of earnings within the business.

b) Strong Liquidity Position The current ratio stands at approximately 1.82:1 (£741,645 current assets against £407,638 current liabilities), and the quick ratio is approximately 1.49:1 (excluding stock). Both ratios indicate the company can comfortably meet its short-term obligations.

c) Conservative Capital Structure Total liabilities of £480,347 (including long-term creditors and provisions) against total assets of £1,067,120 yields a debt-to-assets ratio of approximately 45%. Long-term borrowings are limited to £27,330 in hire purchase commitments, indicating low reliance on debt finance.

d) Regulatory Compliance Accounts and confirmation statements are filed on time and not overdue. The company has maintained consistent filing history with no indications of administrative neglect.

e) Operational Stability Employee numbers remained stable at 25 across both 2024 and 2025, and the business has operated in the same sector for nearly three decades, suggesting a mature and sustainable business model.

4. Due Diligence Notes

Ownership and Group Structure: - Investigate the relationship between Advanced Healthcare Group Limited and the individual PSCs. Determine whether a recent acquisition has occurred and the implications for the company's strategic direction and related party transactions. - Examine the £98,443 investment in group undertakings noted in fixed assets—identify the subsidiary and its financial performance.

Working Capital Dynamics: - Request a detailed breakdown of the increase in other debtors (£96,088) and other creditors (£114,181) to understand the nature of these balances. - Review trade debtor days to assess whether the increase from £173,494 to £195,166 represents normal trading growth or potential collection issues.

Hire Purchase Commitments: - The accounts reference hire purchase contracts both within and beyond one year (note 9 was truncated). Full commitment disclosure should be obtained to understand future cash flow obligations, particularly given that £123,637 of tangible assets are held under such arrangements.

Provisions: - The £45,379 provision (up from £41,917) requires clarification regarding its nature—whether this relates to warranties, redundancy, legal claims, or other obligations.

SIC Code Discrepany: - The registered SIC code (43999 - Other specialised construction activities) does not align with the website description of providing mobility equipment (stairlifts, living and bathing aids). While installation services may justify a construction classification, this should be confirmed as it may affect regulatory and tax treatment.

Secretary Resignation: - Carol Anne Morrison resigned as secretary on 22 July 2026 while remaining as director. Understand whether this reflects administrative streamlining or a more significant governance change.