AZURE SKY TECHNOLOGY LTD

Executive Summary

Azure Sky Technology Ltd demonstrated a financial recovery in the year ending 30 Nov 2023, moving from net liabilities to net assets. However, liquidity concerns remain due to zero cash balances and significant related party debtor exposure. The company maintains good regulatory compliance but operational risks persist given its small size and single director structure.

AZURE SKY TECHNOLOGY LTD - Analysis Report

Company Number: 12998332

Analysis Date: 2025-07-20 14:20 UTC

1. Risk Rating: MEDIUM

Justification: The company has improved from significant net liabilities in 2022 (£-36,252) to a positive net asset position (£5,207) in 2023, indicating some recovery. However, cash at bank is zero, and there is a substantial debtor balance largely owed by the director, which may affect liquidity. The company is small, with minimal fixed assets and a sole director/shareholder, which concentrates operational risk.

2. Key Concerns:

• Liquidity risk due to zero cash balance at year end and reliance on a large debtor balance (£18,918), primarily owed by the director, which may not be immediately recoverable.
• History of significant net liabilities and working capital deficits in prior year (2022), indicating potential past financial distress.
• Single director/shareholder structure concentrating control and operational risk, with related party transactions that could affect financial objectivity.

3. Positive Indicators:

• Turnaround from net liabilities in 2022 to net assets in 2023, indicating improved financial position.
• Reduction in creditor balances, including a significant decrease in amounts due within one year from £38,442 in 2022 to £14,460 in 2023.
• Compliance with filing deadlines (accounts and confirmation statements up to date), suggesting good regulatory adherence.
• Company classified as small and entitled to audit exemption, which may reduce administrative burden.

4. Due Diligence Notes:

• Investigate the nature and collectability of the director-related debtor balance (£18,790), including terms of repayment and any security.
• Review cash flow forecasts to assess short-term liquidity and ability to meet ongoing obligations given zero cash at year end.
• Assess the sustainability of revenue streams given the company’s SIC codes (management consultancy and online retail) and minimal staffing (1 person).
• Confirm absence of director disqualifications or regulatory issues beyond Companies House filings.
• Evaluate potential risks arising from related party transactions and their impact on financial independence.