AMET CONTRACTING GROUP LTD

Executive Summary

Amet Contracting Group Ltd’s latest financials reveal a marked deterioration in financial position with net assets falling sharply and increased long-term indebtedness primarily due to hire purchase contracts and related party loans. While liquidity remains adequate and statutory compliance is maintained, the company’s operational profitability and capital structure raise concerns. Further review of cash flows, related party arrangements, and dividend policy is recommended to clarify financial sustainability.

AMET CONTRACTING GROUP LTD - Analysis Report

Company Number: 12537166

Analysis Date: 2025-07-29 16:55 UTC

1. Risk Rating: MEDIUM

The company shows some solvency stress indicated by a significant decline in net assets from £522,312 in 2023 to £94,177 in 2024 and a material deficit in retained earnings. There are also increased long-term liabilities and related party debts, which raise concerns about financial stability. However, it remains a going concern with positive net current assets and no overdue filings.

2. Key Concerns:

• Decline in Net Assets and Retained Earnings: A reduction from over £522k to £94k net assets and a retained earnings deficit of £107,858 for the year suggests operational losses or large dividend payouts affecting capital.
• High Long-Term Creditors and Related Party Debt: Introduction of £299,846 in long-term hire purchase contracts and £191,646 owed to group undertakings in 2024 significantly increased liabilities compared to zero prior year long-term liabilities.
• Substantial Dividend Payments: Dividends totaling £492,634 paid to holding companies in the year are substantial relative to net assets and may have strained the company’s financial position.

3. Positive Indicators:

• Current Assets Exceed Current Liabilities: Net current assets remain positive (£216,734), indicating short-term liquidity adequacy.
• No Overdue Filings or Compliance Issues: All accounts and confirmation statements are filed on time with no penalties or regulatory concerns noted.
• Growing Asset Base: Tangible fixed assets nearly doubled to £198,826, indicating investment in operational capacity.

4. Due Diligence Notes:

• Investigate the nature and terms of related party loans and intercompany balances to assess repayment risk and financial interdependence.
• Review the rationale and sustainability of dividend policy given recent losses and capital erosion.
• Examine cash flow statements to determine operating cash generation and ability to service increasing hire purchase liabilities.
• Confirm if there are any contingent liabilities or off-balance sheet risks related to contracts or litigation in the construction sector.
• Assess management plans addressing the sharp decline in net assets and measures to restore profitability.