COLLECTING CARS EU LIMITED

Executive Summary

Collecting Cars EU Limited is a small, privately held IT service company with improving net assets but reduced cash balances and increased receivables, relying on its parent company for financial support. Credit approval is feasible with conditions focusing on sustained liquidity and ongoing parent backing. Regular monitoring of cash flow and debtor quality is essential to mitigate short-term credit risk.

COLLECTING CARS EU LIMITED - Analysis Report

Company Number: 13053019

Analysis Date: 2025-07-20 12:33 UTC

1. Credit Opinion: APPROVE with conditions

Collecting Cars EU Limited demonstrates a modest but improving financial position with low tangible fixed assets and a small equity base. The company remains reliant on support from its parent company, The Collecting Group Ltd, which owns 100% of shares and voting rights and has assured continued loan facility availability for at least the next 12 months. While the company is not heavily leveraged and maintains positive net current assets, its cash position has decreased significantly year-on-year from £290k to £30k, indicating potential liquidity risk. The absence of an audit (due to exemption rules) and limited employee base (3 persons) suggest a small operation with limited scale. Credit approval is recommended contingent on continued parent company support and close monitoring of liquidity and trade receivables.

2. Financial Strength:

• Net assets increased to £52,049 from £43,334 in the prior year, reflecting retained earnings growth.
• Tangible fixed assets remain low (£5,885), consistent with a technology service business.
• The company carries no long-term debt but has current liabilities of £58,061, primarily trade creditors and accruals.
• The reduction of amounts owed to the group from £218k to zero improves the current liabilities profile.
• Share capital is minimal (£100), indicating limited equity cushion.
• Overall balance sheet is stable but modest in size and scale, reliant on parent company loans for ongoing operations.

3. Cash Flow Assessment:

• Cash at bank dropped from £290,404 to £30,460, a significant reduction that may constrain short-term liquidity.
• Debtors increased from £33,661 to £75,236, with a notable shift away from trade debtors (£486) to other debtors (£63,646), raising concerns over collectability and working capital quality.
• Net current assets improved slightly to £47,635 but are supported by increased receivables rather than cash.
• Operating lease commitments are small (£8,524 within one year).
• The company’s ability to meet short-term obligations appears manageable but depends heavily on debtor collections and parent company support.

4. Monitoring Points:

• Liquidity trends, especially cash balances and debtor ageing, to ensure timely collection.
• Continued availability and terms of parent company loan facilities.
• Changes in trade creditor levels and any delays in payments.
• Profitability and retention of earnings to build equity base.
• Any changes in operational scale or business model impacting cash flow.
• Compliance with filing deadlines and any audit/exemption status changes.