ADWAY HEAT PUMPS LTD

Executive Summary

Adway Heat Pumps Ltd has demonstrated a return to positive working capital and improved net assets in the latest financial year. However, elevated long-term debt and prior liquidity challenges warrant careful monitoring. The company remains compliant with filings but requires further review of operational capacity and debt obligations to fully assess financial stability.

ADWAY HEAT PUMPS LTD - Analysis Report

Company Number: 12406844

Analysis Date: 2025-07-29 20:59 UTC

1. Risk Rating: MEDIUM
   The company shows improving net assets and positive working capital in the latest year, indicating some recovery, but the relatively high level of long-term debt and prior years' negative liquidity positions suggest moderate solvency and liquidity risks remain.

2. Key Concerns:

• Elevated long-term borrowings (£35,769) compared to net assets (£13,371), which may pressure solvency if cash flows weaken.
• Historically negative net current assets in 2022 and 2023, indicating previous liquidity constraints that may impact operational flexibility.
• No employees reported in the latest year, raising questions about operational capacity and sustainability unless subcontracted or outsourced.

3. Positive Indicators:

• Net current assets improved to a positive £2,118 in 2024 from negative £7,727 the prior year, showing better short-term liquidity management.
• Significant increase in retained earnings (£13,171) reflecting profitability in 2024, supported by reported net profit of £88,308.
• Timely filing of accounts and confirmation statements without overdue filings, indicating good regulatory compliance.

4. Due Diligence Notes:

• Verify the nature and terms of long-term borrowings to assess refinancing risk and debt servicing capability.
• Understand the business model and staffing structure given zero employees reported in 2024 to confirm operational sustainability.
• Review cash flow trends beyond the balance sheet snapshot to confirm ongoing liquidity and ability to meet short-term obligations.
• Assess customer concentration and debtor aging to evaluate the quality and collectability of trade debtors (£35,371).
• Confirm that all statutory filings remain up to date and check for any director conduct records or disqualifications (none noted here).