COMMUNITECH GROUP LIMITED

Executive Summary

Communitech Group Limited displays weak financial resilience characterized by minimal net assets, consistent negative working capital, and high leverage. The company’s current financial position raises concerns over its ability to service debt and meet obligations without external support. Credit extension is not recommended without significant risk mitigation measures in place.

COMMUNITECH GROUP LIMITED - Analysis Report

Company Number: 13508549

Analysis Date: 2025-07-20 18:17 UTC

1. Credit Opinion: DECLINE
   Communitech Group Limited demonstrates weak financial health with minimal net assets (£194 in 2024) and recurring net current liabilities, which worsened from -£738 in 2023 to -£4,361 in 2024. The company carries significant long-term liabilities (£12,038 as of 2024), nearly equal to its total assets less current liabilities, indicating high leverage and potential difficulty servicing debt. The negative working capital position and minimal equity buffer raise concerns about the company’s ability to meet short-term obligations and sustain operations without additional capital injections. Given these factors, extending credit without substantial security or guarantees would be imprudent.

2. Financial Strength:
   The balance sheet shows a micro-entity with very limited fixed assets (£17,273) and current assets (£16,437) insufficient to cover current liabilities (£20,798). The company’s net assets have eroded sharply from £727 in 2021 to just £194 in 2024, reflecting accumulated losses or capital depletion. Furthermore, long-term creditors (£12,038) significantly encumber the company’s asset base. The company employs only 2 staff, indicating a small operational scale. Overall, the financial structure is fragile, with low equity relative to liabilities, exposing the business to solvency risk.

3. Cash Flow Assessment:
   The persistent negative net current assets indicate liquidity pressure, as current liabilities exceed current assets by £4,361 in 2024. This suggests insufficient working capital to cover short-term debts, which could impair timely payment to suppliers or creditors. No audit or cash flow statement is provided, but the balance sheet snapshot implies cash flow constraints. The company’s reliance on external funding or shareholder support to manage operational cash needs is likely. Without improvement in working capital management or profitability, cash flow risks remain elevated.

4. Monitoring Points:

• Track net current assets and liquidity ratios to ensure improvements in short-term solvency.
• Monitor changes in long-term liabilities and any refinancing arrangements.
• Review subsequent filings and any evidence of capital injections or operational turnaround.
• Watch for improvements in profitability or cash generation in future accounts.
• Assess director’s actions and any changes in ownership/control that might affect credit risk.