AUTOMATA IT SERVICES LTD

Executive Summary

Automata IT Services Ltd shows compliance with filing and regulatory requirements and maintains a positive but very modest net asset base. The company’s persistent negative working capital and limited equity highlight medium solvency and liquidity risks. Investors should further evaluate operational profitability and liability structure to ascertain financial resilience and sustainability.

AUTOMATA IT SERVICES LTD - Analysis Report

Company Number: 13106782

Analysis Date: 2025-07-20 12:05 UTC

1. Risk Rating: MEDIUM
   While AUTOMATA IT SERVICES LTD is currently active and filing its accounts and confirmation statements on time, its financial metrics indicate some concerns. The company has consistently reported negative net current assets over the last four years, though the shortfall has decreased in 2023 (-£136) compared to previous years. Net assets remain positive but are very low (£116). This suggests limited buffer to absorb financial shocks or increased liabilities. The low share capital (£1) also reflects minimal equity base.

2. Key Concerns:

• Working Capital Deficiency: The company’s current liabilities slightly exceed current assets each year, indicating potential liquidity constraints. This can hinder meeting short-term obligations without additional financing.
• Minimal Equity and Asset Base: With net assets just over £100 and fixed assets less than £300, the business has limited tangible resources and capital. This constrains operational flexibility and solvency.
• Single Director and Shareholder Concentration: Mr. Sedat Cankaya holds 75-100% of shares and voting rights and is the sole director. This concentration increases governance risk and dependency on one individual, which may affect operational stability and succession planning.

3. Positive Indicators:

• Timely and Full Filings: No overdue accounts or confirmation statements are reported, indicating compliance with regulatory requirements.
• Positive Net Assets: Despite low levels, the company maintains positive net assets and shareholders’ funds, which have increased modestly over the years.
• Increasing Cash Balances: Cash at bank increased to £26,270 in 2023 from £21,147 in 2022, suggesting some improvement in cash liquidity.

4. Due Diligence Notes:

• Review detailed profit and loss data (not filed here) to assess profitability trends and cash flow generation capacity.
• Investigate the nature and timing of current liabilities to understand if they are trade payables, accruals, or other short-term debt obligations.
• Assess the company’s customer base, contracts, and revenue stability given the IT service and software development sector exposure.
• Verify absence of director disqualification or regulatory warnings related to governance.
• Confirm if there is any external financing or related-party transactions that support liquidity beyond the balance sheet.
• Understand the business model and prospects for increasing equity or assets.