ASK ENERGY SOLUTIONS LTD

Executive Summary

ASK Energy Solutions Ltd is an early-stage company showing operational growth but experiencing significant liquidity and solvency pressures as evidenced by a sharp increase in current liabilities and a negative net working capital position as of August 2024. While regulatory compliance is maintained and fixed asset investment indicates operational activity, the financial position raises material concerns about the company’s ability to meet short-term obligations and sustain operations without remedial actions. Further due diligence on cash flow, creditor relationships, and profitability is recommended before considering investment.

ASK ENERGY SOLUTIONS LTD - Analysis Report

Company Number: 14309433

Analysis Date: 2025-07-29 19:13 UTC

1. Risk Rating: HIGH

Justification: The company exhibits a significant deterioration in liquidity and net current asset position within one year, shifting from positive working capital (£20,173 in 2023) to a negative working capital position (-£33,074 in 2024). Current liabilities have almost quadrupled (£77,267 to £300,246), while cash reserves have not increased proportionally, indicating potential cash flow stress. Net assets have also declined substantially (£66,164 to £14,475), raising concerns about solvency. The rapid growth in creditors, especially VAT and trade creditors, suggests operational or financial strain.

2. Key Concerns:

• Negative net current assets as of August 2024, indicating inability to cover short-term liabilities with current assets.
• Sharp increase in current liabilities (nearly 4x) within a single year, particularly VAT and trade creditors, which may point to delayed payments or accumulating debts.
• Significant reduction in shareholders’ funds and net assets, which may reflect sustained losses or asset write-downs impacting financial stability.

3. Positive Indicators:

• The company is active, not in liquidation, with accounts and returns filed on time, reflecting regulatory compliance.
• Tangible fixed assets have increased modestly, suggesting some investment in operational capacity or equipment.
• The company has expanded its workforce substantially (from 6 to 17 employees), indicating growth in operations.
• Ownership and control are clearly documented with three directors/PSCs holding significant shares and voting rights, suggesting stable governance structure.

4. Due Diligence Notes:

• Investigate reasons behind the large increase in current liabilities, especially VAT and trade creditors, and assess payment terms and creditor ageing.
• Review the company's cash flow statements to evaluate operational cash generation and liquidity management.
• Examine profitability trends and any impairments or extraordinary expenses contributing to the decline in net assets.
• Verify the nature and collectability of trade debtors (£117,477) to assess liquidity risk.
• Confirm the company's order book or contract pipeline given the industry (plumbing, heating, air conditioning installation) to gauge future revenue streams.
• Assess management plans to address negative working capital and financial risks.
• Review any off-balance sheet liabilities or contingent risks not disclosed in filleted accounts.