ASIA PALACE MOBILE PHONES UK LTD

Executive Summary

Asia Palace Mobile Phones UK Ltd operates as a small-scale retailer and wholesaler in the competitive UK mobile phone market but exhibits financial stress with negative net assets and working capital deficits in 2024. The company's modest scale and rising liabilities position it as a niche or follower player struggling to keep pace with sector leaders who benefit from economies of scale and robust supply chains. Current industry trends such as rapid product turnover and competitive pricing pose significant challenges, amplifying the company's need for operational and financial restructuring to enhance competitiveness.

ASIA PALACE MOBILE PHONES UK LTD - Analysis Report

Company Number: 13485132

Analysis Date: 2025-07-19 12:41 UTC

1. Industry Classification
   Asia Palace Mobile Phones UK Ltd operates primarily within the retail and wholesale segments of the mobile telecommunications equipment sector. Its SIC codes 47421 (retail sale of mobile telephones), 46520 (wholesale of electronic and telecommunications equipment and parts), and 96090 (other service activities not elsewhere classified) place it in a niche within the broader electronics retail and distribution industry. This sector is characterized by rapid technology evolution, high competition, and thin margins, with significant emphasis on inventory management and supply chain efficiency.

2. Relative Performance
   The company is classified as a small private limited entity given its turnover (£71,595 in 2023) and balance sheet size. Comparing to typical industry benchmarks, this turnover is very modest; established mobile phone retailers often report annual revenues in the millions, reflecting scale and market penetration. The financials show a concerning reversal in 2024 with net assets turning negative (£-38,381) compared to positive net assets in prior years (~£17,075), largely due to increased liabilities (£71,225 after one year) and a sharp increase in trade and other creditors. The company’s liquidity position also deteriorated, with net current assets falling to a negative £23,962 in 2024 from a positive £17,074 in 2023, indicating working capital stress. This is below sector norms where efficient working capital management is crucial due to the rapid inventory turnover nature of mobile phone retail and wholesale.

3. Sector Trends Impact
   The mobile phone retail and wholesale industry is affected by several key trends: increasing consumer preference for online purchasing channels, rapid product lifecycle shortening due to technological advances, and intense price competition from both branded and grey market suppliers. Supply chain disruptions and fluctuating component costs also impact margins. Asia Palace Mobile Phones UK Ltd’s financial strain in 2024 may reflect broader supply chain or market access challenges, or increased borrowing to support inventory or operational costs. Additionally, the post-pandemic recovery period has seen volatility in consumer demand and pricing power, which small players often find difficult to navigate compared to larger chains or online platforms.

4. Competitive Positioning
   Asia Palace Mobile Phones UK Ltd appears to be a niche player or small-scale follower in the highly competitive mobile phone retail and wholesale industry. Its relatively low turnover and negative net asset position in 2024 suggest limited scale and financial resilience compared to sector leaders who benefit from economies of scale, stronger supplier relationships, and multi-channel distribution models. The company’s asset base is modest, with some investment in tangible fixed assets (vehicles and office equipment) which may relate to logistics or retail operations. However, the significant increase in creditors and finance lease obligations indicates reliance on external financing, a riskier position relative to typical competitors who maintain healthier balance sheets. The small employee base (average 2 employees) further suggests limited operational scale. Strengths may include a focused local presence and potentially flexible operations, but weaknesses are evident in financial stability and scale barriers to competing effectively on price or product range.