AIT MEDIHELP LIMITED

Risk Rating: MEDIUM

Justification: While AIT MEDIHELP LIMITED remains solvent with positive net assets and consistent regulatory compliance, it operates with a thin and eroding equity base. The company's liquidity is tightly stretched, heavily reliant on the collection of trade debtors to meet short-term obligations, and it carries a significant tax and creditor burden relative to its size. The sustained decline in net assets over the past seven years raises questions about long-term operational sustainability.

Key Concerns

1. Erosion of Net Assets: The company's shareholders' funds have declined significantly from a peak of £37,808 in 2019 to £14,877 in 2026. This represents a 60% reduction in the equity buffer over seven years, indicating sustained pressure on profitability or the extraction of value (e.g., via dividends), leaving the business with a much thinner margin to absorb future losses.
2. Liquidity Concentration in Debtors: Current assets (£48,935) exceed current liabilities (£41,188), yielding a current ratio of roughly 1.18. However, £21,660 (44%) of current assets are trade debtors. Cash at bank stands at £27,165, which is insufficient to cover the £41,188 in liabilities falling due within one year. If debtor collection experiences delays, the company could face a cash crunch.
3. Rising Creditor Burden: Total liabilities have nearly doubled from £23,255 in 2019 to £41,188 in 2026, driven largely by "Other creditors" (£21,046) and "Taxation and social security" (£20,142). Notably, trade creditors dropped to zero in 2026 from £213 in 2025, which may suggest the company is prioritizing trade payments but accumulating debt in other areas, potentially including director loans or HMRC liabilities.

Positive Indicators

1. Consistent Solvency: Despite the erosion of the equity base, the company has maintained positive net assets consistently over the 10-year history provided. It has not tipped into negative net assets (insolvency) at any point.
2. Regulatory Compliance: The company is up to date with its filings. Accounts for the year ending 31 March 2026 were approved and filed promptly, and there are no overdue confirmation statements or accounts. There are no recorded disqualifications against the directors.
3. Operational Longevity: Incorporated in 2009, the business has survived for over 15 years, including the economic disruptions of the pandemic period, suggesting a resilient core operation and a stable, related directorship (Martin and Alison Bacon).

Due Diligence Notes

1. Composition of "Other Creditors": The balance sheet shows £21,046 in "Other creditors". Investigation is required to determine if this includes director loans, accrued expenses, or unsecured debt, as this significantly impacts the risk profile. Director loans could imply financial support from owners, while third-party debt implies external cash flow dependency.
2. Nature of Taxation Liability: The £20,142 owed for "Taxation and social security" is substantial for a micro-company with only 3 employees. Due diligence should confirm whether this represents outstanding Corporation Tax, VAT, or PAYE, and whether HMRC debt is subject to any time-to-pay arrangements.
3. Debtor Quality and Concentration: Given that trade debtors represent a large portion of current assets, it is critical to assess the age and collectability of the £21,660 owed. Additionally, identifying if this amount is concentrated with a single client or spread across multiple debtors will clarify the default risk.
4. Profitability vs. Dividends: The retained earnings dropped slightly from £15,418 to £14,875 in the latest year. Because the income statement is filleted (exempt from filing for small companies), it is impossible to see the profit/loss for the year. It must be determined whether the reduction in net assets over the long term is due to operational losses or aggressive dividend extraction by the directors.