BANYAN SOLUTIONS LIMITED
Company number 05004797 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: Banyan Solutions Limited
1. Credit Opinion: CONDITIONAL
Banyan Solutions Limited presents a mixed credit profile. At consolidated level, the group demonstrates strong profitability (£1.05M in 2021) and a healthy current ratio of approximately 2.4x. However, the standalone company exhibits a concerning decline in net assets from £1.6M (2019) to £0.65M (2021), driven primarily by aggressive dividend extraction rather than trading losses. The significant intercompany debtor balance (£1.39M at standalone level) and substantial foreign exchange exposures introduce concentration and volatility risks. Any credit facility should be conditional on dividend restrictions and group guarantees.
2. Financial Strength
Balance Sheet Trend - Concerning Deterioration
| Year | Net Assets (Standalone) | Net Assets (Consolidated) |
|---|---|---|
| 2017 | £2,070,036 | N/A |
| 2018 | £1,698,652 | N/A |
| 2019 | £1,600,988 | N/A |
| 2020 | £846,765 | £713,487 |
| 2021 | £650,867 | £1,537,799 |
The standalone net assets have declined by approximately 69% over four years, from £2.07M to £0.65M. Critically, this erosion stems almost entirely from distributions to shareholders rather than trading losses:
- 2020 dividends and share buybacks: £754,279 (£397,018 dividends + £357,261 share purchases)
- 2021 dividends: £291,996
- Combined two-year extraction: Approximately £1.05M
The consolidated position is markedly stronger at £1.54M, but the gap between standalone and consolidated equity (£0.89M) highlights the reliance on subsidiary performance and intercompany balances.
Capital Structure: Minimal share capital (£873 standalone, £1,278 consolidated) with reserves comprising virtually all equity. The business is equity-funded with negligible long-term debt (£24,889 falling due after one year).
Tangible Net Worth: After removing investments (£109,202 at standalone level), tangible net assets stand at approximately £541,665 - a thin base for a business of this scale.
3. Cash Flow Assessment
Liquidity Position - Adequate but Concentrated
Consolidated 2021: - Current Assets: £2,503,265 - Current Liabilities: £1,034,337 - Net Current Assets: £1,468,928 - Current Ratio: 2.42x ✓ Healthy
Standalone 2021: - Current Assets: £1,531,777 - Current Liabilities: £1,001,743 - Net Current Assets: £530,034 - Current Ratio: 1.53x ⚠ Acceptable but tighter
Cash Position: - Consolidated cash increased significantly from £869,410 (2020) to £1,362,957 (2021) - positive trend - Standalone cash increased from £48,089 to £145,189 - still modest relative to the business
Debtors Concentration Risk: The standalone debtor balance of £1,386,588 (2021) likely represents predominantly intercompany balances with subsidiaries. This concentration means the parent company's liquidity is entirely dependent on the ability of subsidiaries to remit funds. Any subsidiary distress could crystallise significant bad debts at the parent level.
Profitability: - Consolidated profit 2021: £1,046,070 (down from £1,147,350 in 2020 - 8.8% decline) - Standalone profit 2021: £96,098 (up from £183 in 2020, but 2020 was clearly anomalous) - The disparity between consolidated and standalone profits (£950K) indicates the group's earnings are substantially generated by subsidiaries
Foreign Exchange Exposure: - 2020 FX loss: £198,751 - 2021 FX gain: £70,238 - These material movements indicate significant overseas operations, adding volatility to reported results
4. Monitoring Points
| Metric | Current Level | Concern Threshold | Rationale |
|---|---|---|---|
| Standalone Net Assets | £650,867 | < £400,000 | Continued dividend extraction eroding equity buffer |
| Current Ratio (Standalone) | 1.53x | < 1.2x | Tight liquidity at parent level; intercompany dependency |
| Consolidated Profit | £1.05M | < £700K | Early warning of trading deterioration |
| Dividend Payments | £291,996 (2021) | > 50% of consolidated profit | Excessive extraction undermines resilience |
| Intercompany Debtors | £1.39M | Increasing without cash conversion | Risk of subsidiary difficulties crystallising losses |
| FX Impact on Equity | £70K gain (2021) | > £200K loss | Volatility from overseas operations |
| Filing Timeliness | Accounts signed 29 Sep 2022 for Dec 2021 year-end | Overdue filing | Currently compliant but 9-month delay in approval |
Additional Risk Factors: - No Audit: The company operates under audit exemption, reducing independent verification of financials - Subsidiary Performance: No breakdown of individual subsidiary performance; consolidated figures may mask underperforming entities - Director Profile: Limited information on director Bertrand Gillet; Mark Andrews holds significant control (50-75%) - Registered Office Discrepancy: Registered address is Milton Park, Oxfordshire, but accounts state principal place of business as Middlesex - requires clarification
Recommended Conditions for Any Facility: 1. Group guarantee from parent and material subsidiaries 2. Financial covenants restricting dividends to no more than 50% of consolidated net profit 3. Minimum consolidated net worth covenant of £1.2M 4. Minimum consolidated current ratio of 1.5x 5. Monitoring of intercompany settlement patterns 6. Quarterly management accounts to be provided