AYOMIDE COLONEL LTD

Executive Summary

Ayomide Colonel Ltd shows signs of financial strain primarily due to negative net working capital and increased short-term liabilities, raising solvency and liquidity risks. While the company’s net asset position improved in 2024, this is driven by substantial fixed asset acquisition funded likely through additional debt, which could pressure cash flows. Operationally, the business maintains workforce stability and complies with filing requirements, but further scrutiny of asset financing and debtor quality is recommended before investment consideration.

AYOMIDE COLONEL LTD - Analysis Report

Company Number: 12819148

Analysis Date: 2025-07-20 12:02 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with persistent negative net current assets and high current liabilities exceeding current assets by a large margin. Although the net assets improved to a positive figure in 2024, this is largely driven by a substantial increase in fixed assets, financed possibly by increased liabilities, raising concerns on cash flow and operational stability.

2. Key Concerns:

• Negative Net Current Assets: The company has reported net current liabilities of £219,713 in 2024, worsening from previous years, indicating potential difficulties in meeting short-term obligations.
• Increasing Current Liabilities: Current liabilities increased markedly from £328,788 in 2023 to £455,268 in 2024, including a new finance lease/hire purchase obligation of £72,210, which may strain cash resources.
• Limited Share Capital and Equity Cushion: Share capital is nominal (£1), and shareholders’ funds have only recently turned positive (£22,421), suggesting limited equity buffer against operational risks and creditor claims.

3. Positive Indicators:

• Turnaround in Net Assets: The company moved from negative net assets of (£22,758) in 2023 to positive £22,421 in 2024, indicating some improvement in overall financial position.
• Stable Workforce: The average number of employees remained constant at 38, implying operational continuity.
• Timely Filings: Accounts and confirmation statements are up to date and not overdue, reflecting regulatory compliance.

4. Due Diligence Notes:

• Investigate nature and terms of new fixed asset additions (£250,000 computer equipment) and associated finance leases to understand their impact on cash flows and debt servicing.
• Review debtor quality and ageing, especially since trade debtors decreased but remain substantial (£158,414), to assess collection risk and working capital efficiency.
• Assess cash flow statements (not provided) and profitability trends to determine if operational cash generation can support increased liabilities.
• Clarify ownership and control inconsistencies in PSC filings, as two individuals are reported with 75-100% share ownership, potentially indicating recent or complex ownership restructuring.