Credit Assessment: ADIGE RADIATORS LIMITED

1. Credit Opinion: DECLINE

Reasoning: The company is technically insolvent with negative net assets of £45,975 as at 31 March 2025, a position that has materially deteriorated from the prior year. Total liabilities exceed total assets by a significant margin, and the working capital deficit is worsening. There is no evidence of asset cover for new indebtedness, and the financial trajectory raises substantial going concern questions. The micro-entity filing status provides minimal transparency into profitability or cash generation, further limiting credit confidence.

2. Financial Strength

Balance sheet position is critically weak and deteriorating:

The company has been in a net liability position since 2023, with the deficit deepening significantly in the latest year (from £13,633 to £45,975 — a 237% increase in the deficit). Total assets have declined by 62% from the 2021 peak (£198,593 to £74,442), while liabilities have grown from £102,848 to £120,417 over the same period.

The balance sheet consists entirely of current assets with no fixed assets, meaning there is no tangible collateral available to secure lending. Share capital stands at a nominal £101, with accumulated losses reflected in negative reserves. The company is entirely dependent on creditor forbearance and director support to continue trading.

3. Cash Flow Assessment

Severe working capital deficit with no liquidity buffer:

• Current Assets: £74,442
• Current Liabilities: £120,417
• Working Capital Deficit: (£45,975)

The working capital deficit has tripled from (£13,633) to (£45,975) in a single year. The company cannot meet its current obligations from its current assets — a fundamental liquidity failure. Current liabilities exceed current assets by 62%, meaning the business is reliant on trade creditors, HMRC, or director loans remaining unpaid or rolling forward.

No cash position is disclosed for 2025 (micro-entity accounts provide limited disclosure). However, the 2017 and 2016 filings showed cash of £28,281 and £55,564 respectively, and the asset decline since suggests significant cash consumption.

There is no visibility over profitability as micro-entity accounts are exempt from filing a profit and loss account. Without turnover, gross margin, or operating profit data, it is impossible to assess whether the business generates sufficient cash from operations to service existing obligations, let alone new debt.

4. Monitoring Points

If exposure already exists, the following require close surveillance:

1. Creditor composition and ageing — Determine the split between trade creditors, HMRC arrears, and director loans. Director loans may be subordinated; HMRC arrears carry enforcement risk.

2. Going concern status — The filed accounts contain no explicit going concern note. Confirmation should be sought that directors are providing ongoing financial support and whether loans are repayable on demand.

3. Asset quality — Understand what comprises the £74,442 in current assets (stock vs debtors vs cash). Obsolete or slow-moving radiator inventory may be overstated.

4. Trading performance — Request management accounts to establish whether the business is currently profitable and cash-generative. The balance sheet deterioration may reflect accumulated losses.

5. Creditors' willingness to continue supply — Trade creditors funding 62% more than current assets suggests significant creditor dependence. Any withdrawal of trade terms could trigger insolvency.

6. Filing compliance — Continue to monitor. Accounts to 31 March 2025 were approved 2 December 2025, which is within the 9-month filing window but toward the later end, suggesting limited urgency.

7. Related party transactions — Two PSCs each hold 25-50% of shares. Clarify whether director loan accounts are credit or debit balances and their terms.