CMD ELECTRICAL LIMITED

Risk Rating: HIGH

Justification: The most critical data point in this assessment is the company's official status: Liquidation. Regardless of the historically robust financial position detailed in the latest filed accounts, a company in liquidation has ceased normal operations and is undergoing formal closure. This presents an absolute barrier to ongoing operational investment and signifies that asset distribution is now under the control of a liquidator, presenting severe counterparty and recovery risks.

Key Concerns

1. Company Status (Liquidation): The company is currently in liquidation with a projected dissolution date of August 2026. This supersedes all historical financial data; the entity is winding down, and control of its assets has likely passed to a licensed insolvency practitioner. Engaging with this company as a going concern is not possible.
2. Operational Cessation (Zero Employees): The latest accounts confirm that the average number of employees dropped from 2 in 2022 to Nil in 2023. For a company in the electrical installation industry (SIC 43210), a complete lack of workforce strongly indicates that the business is no longer trading, aligning with the liquidation status.
3. Address Discrepancy: There is a conflict in the reported registered office. The overview lists "Asm (M) Ltd The Diamond Centre, Market Street, Magherafelt," while the 2023 filed accounts list "Unit 3B, Balliniska Road, Londonderry." Given the liquidation status, this discrepancy creates uncertainty regarding the proper service of legal documents or the verification of the liquidator's communications.

Positive Indicators

1. Historical Solvency and Strong Net Assets: The financial history up to March 2023 shows exceptional solvency. Net assets stood at £1.47 million against current liabilities of only £13,781. The company was fundamentally sound on paper at the time of the last filing, suggesting this liquidation is likely solvent (a Members' Voluntary Liquidation) rather than forced by creditors.
2. Substantial Cash Reserves: As of March 2023, the company held £732,974 in cash. This high liquidity position means that, historically, the company had ample resources to meet any short-term obligations without needing to liquidate assets urgently.
3. Asset-Backed Equity: The net assets are supported by tangible assets (including a revalued freehold property of £120,600) and investments, rather than relying on intangible or uncertain asset classes.

Due Diligence Notes

1. Determine Liquidation Type: It is imperative to verify whether this is a Members' Voluntary Liquidation (MVL) or a Creditors' Voluntary Liquidation (CVL). Given the £1.47M net asset position in the last accounts, an MVL for tax-efficient distribution of funds to the shareholder (Mr. Charles McDaid) is highly probable. This dictates the likelihood of creditor recovery and the legal standing of any outstanding commitments.
2. Appointed Liquidator: Identify the appointed insolvency practitioner. All future communications, claims, and asset distributions must be directed through them, rather than the former directors.
3. Debtor Realisation: The 2023 accounts list £494,909 in debtors. Investigate the age and collectability of these book debts. In a liquidation, trade debtors often prove difficult to collect, and the realisable value may be significantly lower than the book value.
4. Investment Valuations: The accounts show £120,000 in investments and a fair value reserve of £12,851, alongside a £24,920 impairment. The nature and liquidity of these investments should be investigated to determine if they can be easily liquidated at their stated book value.
5. Related Party Balances: Given the PSC owns >75% of the company, investigate if the minimal current liabilities (£13,781) include any related-party balances, or if there are undisclosed related-party receivables within the debtors, which could complicate the liquidation distribution.