Credit Assessment: CLEANIT CONTRACT SERVICES LIMITED

1. Credit Opinion: DECLINE

Reasoning: The company presents an unacceptable credit risk profile. Net assets have deteriorated to just £964 (from £3,102 in 2023), representing a near-zero equity buffer against total assets of £75,509. Critically, working capital has swung from a marginal positive position (£1,474) to a significant deficit of (£14,598), meaning the company cannot cover its short-term obligations from current assets. The 91% increase in creditors due within one year (from £39,020 to £74,545) without corresponding revenue disclosure, combined with a director resignation shortly after accounts approval, raises material concerns about financial stewardship and going concern viability.

Any credit facility would require comprehensive security and personal guarantees that, given the balance sheet position, may still be insufficient to mitigate risk.

2. Financial Strength: CRITICAL WEAKNESS

Balance Sheet Deterioration:

The company is effectively trading on creditor funding. With equity comprising just 1.3% of total assets, any unexpected loss or bad debt would likely push the company into negative net worth territory — a position it has occupied previously (2020: -£8,607; 2022: -£2,573 shareholders' funds).

The long-term creditor balance of £19,122 has been eliminated but appears reclassified into current liabilities, suggesting refinancing or creditor pressure rather than genuine repayment. This has created a working capital crisis.

Historical Volatility: The net asset position has oscillated between negative and marginal positive values over the past decade, never exceeding £3,102. This indicates a business that has persistently operated with minimal financial reserves and relies heavily on external funding to sustain operations.

3. Cash Flow Assessment: INADEQUATE LIQUIDITY

Working Capital Deficit: The (£14,598) net current liability position means the company has insufficient current assets to meet its short-term obligations. Current assets of £59,947 against current liabilities of £74,545 leaves a shortfall requiring creditor forbearance, director loans, or asset disposals to bridge.

Creditor Dependency: The 91% increase in short-term creditors is alarming. Without a profit and loss account (micro-entity exemption), we cannot determine whether this represents: - Trade creditor stretching (delaying supplier payments) - Short-term borrowing - HMRC liabilities (VAT/PAYE arrears) - Director loan reclassification

Any of these scenarios carries adverse credit implications.

Cash Generation Unknown: The micro-entity filing regime means no cash flow, profit and loss, or turnover data is available. We cannot assess operating cash generation, profitability, or the company's ability to service additional debt from earnings. This opacity itself is a credit negative.

Employee Reduction: Headcount decreased from 5 to 4, which may indicate cost reduction measures but could also signal contract loss or operational contraction.

4. Monitoring Points

If any credit exposure is considered (secured only), the following require ongoing surveillance:

Key Red Flags to Monitor: - County Court Judgements — given the creditor position, monitor for CCJs - Director loan account — determine if directors are creditors (which could provide some offset but also indicates personal exposure) - HMRC compliance — verify no outstanding tax liabilities - Contract pipeline — headcount reduction may indicate lost contracts - Filing behaviour — any shift toward late filing would signal deteriorating governance

Additional Concern: Director Nigel Royston Hill resigned on 16 December 2025, approximately three months after approving the 2024 accounts. This timing is unusual and may indicate: - Loss of confidence in the business direction - Personal financial exposure concerns - Or simply retirement/transition

The remaining director, Tracy Hill, now holds sole management responsibility for a company with negligible equity and a working capital deficit.