Company Number: 13478157

Analysis Date: 2025-07-29 15:17 UTC

1. Risk Rating: MEDIUM
   The company shows strong net asset figures and positive working capital in the latest year, indicating a solid equity base and improved liquidity. However, current liabilities remain significantly high relative to current assets, and there was a prior year working capital deficit. The auditor’s qualified opinion related to stock verification introduces an element of uncertainty in asset valuation.

2. Key Concerns:

• Liquidity Pressure: Despite improved net current assets of £624,884 in 2024, current liabilities remain large (£3.6M), and the prior two years showed negative working capital, which could stress short-term cash flow management.
• Stock Valuation Uncertainty: The auditor was unable to verify stock quantities at 30 June 2023, limiting assurance on inventory valuation and potentially affecting cost of sales accuracy and profitability measures.
• Concentration of Control: Mrs Diane Elizabeth Collison holds 75-100% of shares and voting rights, implying governance and control concentration risk which could affect minority investor protections and decision-making transparency.

3. Positive Indicators:

• Strong Equity Position: Shareholders’ funds increased steadily from £5.09M in 2021 to £6.18M in 2024, reflecting retained earnings and asset growth.
• Revenue Growth & Operational Improvements: Strategic report indicates 17% turnover growth and efficiency gains through automation investments, supporting operational sustainability.
• Regulatory Compliance & Standards: The company maintains several industry certifications (OHAS, SEDEX, LEAF) and complies with relevant legislation, reducing regulatory risk.
• Going Concern Confirmed: Auditor did not identify material uncertainties about the company’s ability to continue as a going concern.

4. Due Diligence Notes:

• Investigate cash flow patterns and maturity profiles of current liabilities to assess liquidity risk in detail.
• Review stock control procedures and inventory valuation methods to understand the impact of the auditor’s inability to verify stock in the prior year.
• Evaluate the governance framework given the high concentration of shareholding and directorship within the Collison family.
• Confirm the nature of the large current liabilities and whether these include any related party transactions or short-term borrowings.
• Assess sensitivity to risks noted by directors such as bulb availability and economic cost pressures, especially energy and labour costs.